Four Strategies for Increasing Earned Authority
Of the three types of executive authority (Positional, Borrowed, Earned), Earned Authority depends on the recognition of a CCO’s value. This article discusses four ways to increase Earned Authority, so that tenure is not left to chance. There are three types of executive Authority: Positional, Borrowed, and Earned (the Bingham CCO Authority Model is fully discussed in The Bingham Advisory: Powerful Influence on Customer Centricity; see below). In this article, I focus on Earned Authority and some of the strategies CCOs can employ to increase it. Positional Authority doesn’t change. Borrowed Authority may have a limited lifespan. The remaining Authority is earned through a sustained history of delivering positive, visible results for customers that also benefit the business; and by proving to other executives the business value of acting in the customer’s best interest. There are four ways to earn Authority, discussed below. Own Customer Insight and Inject it into Strategic Discussions The CCO’s value is in interpreting data and devising strategy but not necessarily in owning customer data, as this can be a time-consuming distraction from the real CCO value. CCOs must be the definitive Authority on customer needs, wants, and desires and accurately represent customers in strategic decisions balanced, of course, with business needs. • Own and manage the highest priority customer insight gathering processes • Develop a defensible methodology to annually identify the top 10 customer dissatisfiers across product lines and business units • Tell the customer story • Invite customers to tell their stories at all levels • Monitor social media Build Relationships With Peers, Employees, Management, Customers, And Outside Influencers By definition, Earned Authority results from the recognition of the value of the CCO’s efforts. Most CCOs do not own all customer-facing resources and must lead by influencing relationships. These relationships help drive customer centricity throughout the organization and change the business landscape. • Create a closed-loop triage, escalation, and issue resolution process • Recruit “Unlikely Allies” • Share loyalty survey insights in a special preview with executives • Create “Heroes” • Become an internal consultant to other departments • Launch a customer targeting and acquisition program • Help overcome sales resistance • Create a customer reference and referral program • Develop your “personal” CCO brand to push your corporate brand Engage Employees The CCO cannot afford to be the only customer champion. All employees must be actively engaged as part of a pervasive, customer-centric culture so as to ensure that customer needs are consistently and profitably met. Engagement can mean something as simple as employees understanding individual impact on customers or employees actively seeking to understand and deliver more for customers. How can the CCO best engage employees in the service of customers? • Identify the characteristics of strongly customer-centric and highly productive employees and provide these to HR and hiring managers as screening and hiring criteria • Participate in new-hire orientation; set the standards and create the customer-centric culture from the outset • Make explicit the impact every employee has on customers • Recognize and reward desired behaviors • Involve employees in customer problem solving • Measure employee engagement • Measure contribution to customer loyalty at the individual employee level Demonstrate Results CCOs need to demonstrate and publicize their results in order to earn greater Authority. Of particular importance is the correlation with revenue and profits. Oracle’s CCO found that Oracle’s most engaged customers generate 33% greater revenue than similar customers who are not as engaged in customer programs. Another CCO found that extremely loyal customers were five times more likely to repurchase, and that by moving 1% of their customers into this top loyalty box, the company generated an additional $33.3M in annual incremental revenue. Another low-cost airline found that a one point NPS score increase generates between $5M and $8M. These data are extremely powerful. They draw a clear line from CCO initiatives to increased revenue and demonstrate inarguable results. There are a number of ways to gather and demonstrate results: • Create meaningful metrics and leading indicators correlated with revenue or profitability • Own the measurement/analysis process • Focus on loyalty drivers. Use factor analyses to discover the linchpins that have the greatest impact on loyalty • Focus on mitigators to loyalty drivers • Create a marketing communications plan and socialize the results at all levels Conclusion Increasing Authority to solve customer issues, drive customer centricity, and thereby create sustainable business growth needs to be a core strategy of every CCO who doesn’t wish to relegate the tenure of his/her role to chance.