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Nov 09
2010

Building Blocks for the Customer-Centric CIO

Posted by tomhoff in Voice of the CustomerNet Promoter Scoreenterprise feedback managementcustomer-centricCenter for CIO Leadershipanalytics

tomhoff
 

According to a global study of 1,500-plus CEOs conducted by IBM, 88 percent of business leaders say that getting closer to their customers is their top priority over the next five years.

In response to these results, research conducted by the Center for CIO Leadership has concluded that getting closer to end customers "may be the most important thing CIOs can do to earn and keep (their) seat at the table."

For savvy CIOs who have taken the steps necessary to become business leaders and gain a seat at the table, becoming a customer-centric CIO shouldn't represent a giant leap.  Based on interviews it conducted with CIOs across a variety of geographies, here are the central themes that the Center for CIO Leadership has captured:

-Many CIOs report that their business peers in the C-Suite do not have a clear view of the end customer. This represents an opportunity for smart CIOs to play off their technological acumen and their business know-how. Companies that are customer-centric make extensive use of customer data as well as Voice of the Customer programs, enterprise feedback management, social media monitoring and other techniques to gain a 360-degree view of their customers. CIOs can draw lessons from what other customer-centric companies such as USAA have achieved and begin with small projects to demonstrate the value of collecting and acting on customer feedback to deliver optimal customer experiences.

-IT is often several steps removed from the end customer. Perhaps. And not to minimize this challenge for CIOs, but effective IT organizations are already adept at listening closely to what end users need and responding to those needs. External customers who feel like they're being listened to have a tendency to develop deeper relationships with the companies they do business with and increase their loyalty and spending with those organizations. CIOs have an opportunity to work with their business peers from across the organization to forge tighter relationships with external customers.

-CIOs have to juggle the needs of a diverse set of customers, both internal and external, to play a strategic role in this transformation. See previous point.

-The ROI of customer centricity efforts can be difficult to quantify. Customer-focused strategies don't always readily translate into quantifiable returns, such as an X percent increase in revenues or cross-sell/up sell. But that doesn't mean there aren't ways to measure returns from customer centricity. For instance, one popular technique many companies apply is Net Promoter Score - which in its essence boils down to the likelihood for a customer to recommend a company to a friend or colleague. Also, a growing number of companies are using analytics to help them to segment their customers based on current and long-term value. Companies that use customer data to better understand the needs, attributes and behaviors of their customers are better positioned to craft offers and sales strategies to similar groups of customers, particularly their most valuable ones.

-Customer management tools are table stakes. As the authors of the Center for CIO Leadership point out, customer-centricity goes beyond the use of a CRM system. Companies have to utilize the right set of customer management technologies and blend these effectively with customer-focused processes. Although this may not begin with the CIO, IT leaders can play an instrumental role in helping to orchestrate these efforts across the enterprise, including sales, marketing and customer service.

-The CIO can play a critical role in analyzing customer data to enable more customer-centric business decision making. Again, this represents an opportunity for CIOs to make use of analytic tools, including predictive analytics, to gain insights into customer needs, behaviors and preferences and develop strategies for delivering products and services to customers based on those attributes.

 

 

Comments (1)Add Comment
Harvey R Koeppel
...
written by Harvey R Koeppel, November 11, 2010
Tom:
Thank you for your comments on the Center’s research and for helping to engage your readership in this important discussion. As the Center continues to work with CIOs to further define customer centricity and how CIOs can lead in this area we find your point about IT organizations being adept at listening as a very good observation and opportunity for CIOs. CEOs are looking to their c-suite to really jump in and help in the important work of delighting the customer and creating differentiated experiences that help to retain and sustain a customer base. As you rightly point out – these challenges are ones that CIOs have dealt with internally for years. It is now a great opportunity for CIOs to focus these skills externally.

As an aside, 2 Center CIO members will be sharing their observations about how they built customer centricity in their organization on a webinar in December.

Thanks again for the post.
Harvey R Koeppel
Executive Director
Center for CIO Leadership


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