Are chief customer officers just CMOs in disguise?

More businesses are appointing chief customer officers instead of CMOs to lead efforts to focus on the customer, but is this a welcome evolution or a worrying misunderstanding of what marketing already does?

chief customer officer

Chief customer officers can be found on the executive board of a growing number of UK brands. In the last few months alone, Pret has hired its first CCO Barnaby Dawe, while his former employer Just Eat replaced his CMO role with a CCO, appointing Peter Duffy from easyJet.

Elsewhere, when Hostelworld’s CMO Otto Rosenberger left, Kristof Fahy took on a new CCO role. At the BBC, Kerris Bright is the first CCO, while TfL’s Chris MacLeod was promoted from marketing to customer director.

And it isn’t just anecdotal evidence of a shift. According to data compiled by recruitment consultancy Talecco, the CCO is on the rise. In 2014, just 14 UK companies had a customer chief but by early 2017 that number had risen to 90, with 46% of those introduced in the previous 12 months.

“These figures show the growing emphasis being placed on the customer agenda,” says Talecco’s report. “The chief customer officer is the executive ultimately accountable for both customer strategy and all customer initiatives across the business. They effectively become the voice of the customer in all business decisions.”

But why is the role necessary? The description of a CCO as “becoming the voice of the customer in all business decisions” sounds like a CMO. Is there a real evolution here or have businesses failed to understand what marketing is and so resorted to giving it a new name?

Focusing on the customer journey

Part of the reason for the rise of the CCO is that more businesses need marketers that can focus on an end-to-end customer journey, rather than just on marcomms and brand building. There are a slew of businesses now that are not following the old FMCG handbook, meaning marketing has a different role to play in different sectors.

TfL’s Macleod explains: “Marketing might historically have been focused on FMCG companies with a lot of focus on brand, advertising. There are more organisations like retailers, service businesses, online businesses that are big advertisers maybe but are looking at that complete end-to-end, maybe more than some of the branded businesses do.”

Digital transformation has also meant there is more of an expectation from customers that everything is joined up. Dawe’s role at Pret will see him leading global marketing and comms activity, but also its growing ecommerce business.

It was about – excuse the pun in our case – the customer journey. Instead of just looking at marketing channels we are looking at the full end-to-end customer journey.

Chris MacLeod, TfL

As Pret CEO Clive Schlee puts it: “[Barnaby] has the sensitivity and the experience to maintain continuity in Pret’s tone of voice while at the same time leading the company’s digital transformation.”

At TfL Macleod, in addition to his marketing responsibilities, also now manages two new chief customer officers who were introduced to the management structure to look after underground and rail, and surface transport (buses, cable cars, taxis, etc) respectively.

“It was about – excuse the pun in our case – the customer journey. Instead of just looking at marketing channels we are looking at the full end-to-end customer journey, all the touchpoints – staff behaviour, station environment, the accessibility of the network customer information. It was really enabling us to do that in an integrated way across all our services, as opposed to those operations being separated and not connected up,” he explains.

Making marketers responsible for growth

Macleod also has a greater focus on sales and revenue now than he had historically, although the individual services are in the end responsible for their own P&Ls. “There is a sense that the customer role suggests you need to think more broadly and understand the business more and what the drivers of growth are,” he adds.

That is also the reason why Hostelworld brought in a CCO, with Fahy having a wider commercial responsibility that covers business planning and strategy and customer operations, as well as the previous tasks that came under the CMO.

READ MORE: Mastercard on the ‘existential crisis’ facing CMOs and how it can be fixed

Yet it is for that reason that Thomas Barta, Marketing Week columnist and co-author of The 12 Powers of a Marketing Leader, believes marketers should be worried. He describes ‘chief customer officer’ as a “meaningful title”, but says the reasons for dumping CMOs should worry the marketing industry.

“Over 50% of C-suite members don’t believe top marketers are driving the bottom line. Chief customer officer has a lovely sound – and a worrying rationale,” he explains.

“New titles are fine – but they spell trouble for the CMO brand. Whatever the [job title], top marketers must finally become serious drivers of growth and profit.”

That need for marketing to be seen as a serious profit driver suggests a continued miscommunication of what marketing is and what a CMO should be doing. Barta hopes the rise of the CCO title will encourage more marketers to really put the focus on customers and profitable growth; if it doesn’t there will probably be another rethink in the executive suite.

Repositioning marketing across the business

Some marketers have previously been scathing of businesses that reposition marketing. Johnson & Johnson’s CMO Alison Lewis believes the issue comes about at companies that interpret marketing simply as marcoms, rather than as the department that puts the customer at the heart, as she told Marketing Week at Cannes Lions. But she admits that repositioning the role can be a good way to signal priorities to the rest of the business.

TfL’s Macleod agrees. “The practical thing is if you are talking about customers a lot and wanting to be a customer-facing organisation, putting someone in charge of that customer strategy and interface is a good signalling device.

New titles are fine – but they spell trouble for the CMO brand.

Thomas Barta

“There is sometimes a bit of a risk that marketing gets just associated with marcomms, in other words that marketing is just about outputs and stuff – campaigns – rather than the total customer journey. [By appointing a customer director] you aren’t saying marketing is any less important, but it probably does [say something to the rest of the business]. It is a signal that we want to be customer-focused.”

Helen Edwards, Marketing Week columnist and co-founder of Passionbrands, can see the point, but thinks it confuses the role of marketing. “If you take a view that marketing is a really important function of the business, as important as financial management and operations and HR, if we faff about with the titles all we do is confuse and make the whole area less meaningful within the business.

READ MORE: The creation of a chief customer officer role at Tesco signals a quiet revolution in marketing thinking

“It’s hugely disappointing if CEOs feel like they need to remind marketers they are there to look after customers, or call it out in their job title, or remind the business. It would be better to ensure that business and marketing understand their remit and step up to the plate. But that might be a bit pie-in-the-sky.”

In the end, however, Fahy believes it doesn’t matter and that the CCO role is simply a reflection that more businesses across all sectors are realising they have to put the customer at the centre if they want to succeed, and that having a senior role with that accountability and responsibility is important.

He argues: “Marketing needs a seat at the board table, as does the customer. If marketing represents that then that’s great and if it doesn’t, it should – and that’s when the CCO title can be useful to reflect that change in responsibility and accountability.”

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Comments
  • Julian Pratt 30 Aug 2018 at 8:19 am

    I am not a fond of the CMO title, or the word marketing as it is currently used.

    Marketing is how a business will “understand, stimulate and satisfy customer demand profitably.” In other words – “business”

    How can you be a CMO in the real sense and NOT base oversight of the whole business from research to customer care?

    I agree with Lewis, the issue comes about at companies that interpret marketing simply as marcoms. Now that is a word I REALLY hate. 😀

  • Denyse Drummond-Dunn 30 Aug 2018 at 9:33 am

    The good news is that UK companies are finally waking up to the fact that customers are important!
    Now whether they want to change the title of the CMO, hire a CCO or anything else, is for me a personal choice of the CEO. As long as everyone understands that the customer must be the heart of the business, the way the work is divided doesn’t really matter; at least that’s my opinion. Let’s just get back to working on what is important – the customer!

  • G J Simpson 30 Aug 2018 at 11:39 am

    Some FMCG companies are also combining job functions .Mars recently announced a “chief demand officer”role because category growth is as important ,or probably in many categories, more important than share growth . So you need to bring the retailers along with you if you want to achieve top line value growth

  • Andy Oliver 5 Sep 2018 at 1:04 pm

    This is good PR for the company that did the research, but it’s really a non-story. lf the CMO is not focused on the customer, what on earth is he/she doing? And I’m not sure extensively quoting TFL is a great example of customer orientation. It’s farcical to talk about the “end-to-end customer journey, all the touchpoints – staff behaviour, station environment.” I take the central line every day because I have no choice. Staff are invisible or ignore you. Station environment is newspapers / litter everywhere or stifling in the summer. I’m sure there are better companies to quote.

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