Putting the customer at the heart of the organisation is one of the key themes of business in the past few years, but, while the role of chief customer officer has started to appear more often, they are still a rare breed.
In fact, according to customer management consultancy People TECH last year, only 1% of FTSE companies have a CCO or equivalent on their board, although a further 15% have a board member with a specific customer-focused remit.
Beyond that, there are two schools of thought about the nature of the CCO’s role. Is it similar to that of chief digital officer—a change agent expected to work their way out of the job once the business has completed its digital transformation? Or is it a permanent addition to the C-suite, essential to keeping the customer at the heart of the company’s activities?
Sarah Bentley joined Severn Trent Water, a U.K. state-regulated monopoly, as chief customer officer in 2015, but, as she admits, she’s never met another CCO with the same remit as hers. So when she spoke to CMO.com, the first question was what that remit is.
Bentley: Our business is structured into three main P&Ls, and we have a number of groupwide functions. The three P&Ls are our consumer retail P&L, B2B retail P&L, which is the JV that was just set up with United Utilities [another U.K. water company], and our wholesale P&L. We’ve got other non-regulated parts of our business, but the core water and waste business is around 90% of our revenue.
So I’ve got three roles. I run our consumer retail P&L, then my other two roles are part of our groupwide functions. I’m group CIO, and I also look after group transformation.
CMO.com: What was the thinking behind structuring the role that way?
Bentley: Our mission is to put the customer at the heart of the business and to be digitally led. And if you want to change a business with customers and digital in mind, one way to get momentum is by putting your consumer P&L, your CIO function, and your change function together. The changing expectations of customers and digital disruption are so intricately linked, you can’t split the agendas apart.
Within two years, our retail business has gone from mid-table performance to the Champions League slots within our sector, because I’m not having a debate with our technology team about whether we need to have better insights on our customers or have a single view of a customer. That’s one half of my brain talking to the other half.
Having that all wrapped up together means we’re pushing at pace to properly land the customer at the heart of the business. We’re only two years into a multi-year change journey, but we’re well on the way and have embedded a lot of the changes. We can then take that customer-centred, digital-first mindset into the rest of our business, which is what we’re driving through at the moment.
CMO.com: Your responsibility for P&L is quite unusual, isn’t it?
Bentley: I’ve seen other versions, in other large companies, where the CCO is an influencing role. It takes longer, because you’ve got to get a bunch of people really clearly aligned on their motivation and agenda.
In our operating model, I am able to prove the change works in a sizeable chunk of our business. We have made the case for putting customers at the heart and demonstrated the positive impact, the economic benefit, and the achievability of it, which is highly persuasive.
CMO.com: So you’re the canary for this, and the vision is these approaches then flow through into the rest of the business?
Bentley: It’s not the vision, it’s happening. But it’s natural because I look after our technology, and also groupwide change. The role is to drive this agenda forward for our whole business. And I’ve got my heart and soul firmly in the camp of our customers. When I review technology designs or when I’m signing off change programmes, I always ask “What’s the impact on customers?” It’s in my DNA.
The canary piece is the evidence. I think about chief customer officers in other organisations encouraging, persuading, influencing P&L holders or other people in the business to take that leap of faith. We are able to get straight there. We create the change and everyone goes: “Gosh, that’s really working in that part of the business.” It just accelerates the pace that we can change at.
CMO.com: How does this interface with marketing?
Bentley: Marketing for a monopoly business is very limited, because we’re not currently in the business of acquiring customers. If you live in the Midlands, you’re one of our customers. Although that’s changing as the B2B retail market opens up for competition.
We’re also very mindful that, because we’re a monopoly business, spending money on marketing is not appropriate because customers would probably prefer cheaper bills to being told how marvellous we are. We do spend some money on communications—but it’s on awareness and education to help reduce costs for customers. The marketing function sits under Tony Ballance, our director of strategy and regulation, and he and I collaborate really effectively.
CMO.com: Where does customer service sit?
Bentley: It’s all part of our consumer P&L. Looking at the customer journey, at the front end, we’ve got insight and all the activities we do around properly understanding our customers. Then we’ve got the whole business of interacting with our customers, through our contact centres, online, and through social media channels. And last, we resolve complaints.
The two ends of the spectrum are the most curious. We’ve got to get all of that middle process right, that’s the day-to-day part of interacting with our customers. But when I look at the insight team and the complaints team, I ask: “What was our intention, and where did we go wrong?”
One of the things that we’ve done over the last couple of years is redesign our bill, because all utility bills look the same. Now it’s much more visual. We had a combination of insights about what customers wanted, but we also did a load of analytics on our complaints about bills and which bits people didn’t understand, and why people came back to us to ask us questions. We had a real customer-led design approach.
This is really important for me. Our bill is one of the main interactions we have with our customers. We made sure that the new bill is both delightful and effective. It fits the very specific requirements that our customers have and has also created the right trust, impact, openness, transparency, and clarity.
That’s an example of how you can tie all this together if you’ve got all those pieces of the jigsaw. The insight, the service, and the complaints give me visibility of the overall picture. Then technology and transformation bring it all to life.
CMO.com: What are your KPIs?
Bentley: I’ve got different ones for different areas such as programme delivery, cyber security, etc. On the customer side, our key measures are the cost-to-serve, bad debt, and two measures in customer experience. There is a regulatory incentive mechanism around customer experience that we have, and we also use the Institute of Customer Service to measure customers’ perspectives on us. Then our fifth measure is support for vulnerable customers—customers who are in financial difficulty or need support in other ways.
At the very top level, they’re the five I look at, because if you’re doing the right thing for customers, it’s going to show up in those numbers.
CMO.com: What are your thoughts on the question of the longevity of the CCO role?
Bentley: Our consumer business has gone from mid-table to top-table, and our wholesale business is on that journey. I firmly believe that our customer focus and embracing of digital technology will really land that. Is my job then done? If the customer is so embedded around the executive table, then does the CCO role need to exist? But, on another level, my role will continue to exist because somebody’s got to run our consumer retail P&L, somebody’s got to run our technology.
A company that forgets its customers does so at its peril. And all the brilliant companies that we all herald as customer-focused businesses really understand their customer base and focus on it. So shouldn’t the customer, the voice of the customer, be at that top table, to prevent the executive team becoming introspective?
CMO.com: At what point does that become the role of the CEO?
Bentley: It’s driven by the CEO and the chairman. It’s not going to be about whether there’s somebody who’s got a certain job title. Liv [Garfield, CEO of Severn Trent] passionately believes in putting customers at the heart of our business, which is a key reason for her being appointed. And she deliberately created my role to bring that vision to life. In creating my role, we have brought together three really important functions that are useful in driving a customer-centric mindset in the business, and I have spent my career and a huge passion doing just that.