Why CXOs are Replacing CMOs



Matt Wujciak
11/25/2019

CXO

After decades of struggling for buy-in, the customer experience function has finally started to secure a seat at the executive table. More organizations, regardless of financial merit, are beginning to appoint the emerging CXO to oversee customer experience. 

A good customer experience makes a person five times more likely to recommend a company and more likely to purchase from that brand in the future. In many ways, the importance of a CXO’s ability to create quality consumer experiences is similar to a CMO’s ability to generate a quality brand reputation.

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Regardless of the industry, every company revolves around the ROI of efficient employees and the journey mapping of customers, completing the two step equation of experience… two functions the emerging CXO is paying close attention to. 

Consumer journey mapping

The consumer journey map starts the minute a customer or client recognizes a need, makes contact with a brand, and continues through post-purchase satisfaction levels and loyalty/retention rates… as well as every touchpoint in between (Instagram ads, yelp reviews, website content, etc.). CXOs are responsible for developing and executing these journey maps, including creating customer personas, managing consumer data, and incorporating technology to personalize experiences. That’s why Forbes, the WSJ, the Harvard Business Review, and most of the world’s most trusted business advisory publications, are stressing the importance of the emerging CXO. In fact, many of them are going as far as to say it’s “the new CMO.” And for good reason.

With the exponential increase in mankind’s technological capabilities (i.e. AI and automation), consumers are spending and demanding individualized customer experiences throughout the journey now more than ever. 

For example, recommendation engines like those deployed by Amazon and Netflix were market pioneers in using behavior and data to tailor which content, recommendations, ads, or premium discounts is shown to the customer, enhancing experience on an individual basis. If the demand of content experience isn’t consistently met by a company like Netflix, customers switch over to a newer service that can (Disney+). 

Danone Nutricia (science based nutrition company) has centered their experience strategy around a similar search approach to individualizing their services. As seen in a recent CCW Digital special report, Danone Nutricia has partnered with Sitecore technology (a content personalization software) to tailor their content on its “Nutricia For You” website to a mother’s stage of pregnancy.

When she visits the site for the first time, she’s presented with a series of questions in order to help the software understand her needs. If a mother two months pregnant returns to the site two months later, products, ads, informative info, and services will be tailored for a woman 4 months pregnant. Implementing functions like these into a consumer journey map emphasizes a competitive advantage that a Chief Experience Officer brings to the table. Appointing a C-level executive to have these kinds of focuses is a competitive advantage right now, but it won’t be for long. 

As the WSJ predicts, “Although the majority of big marketers have CMOs, the popularity of the title has been waning over the past several years. CMO titles have been eliminated or gone unfilled this year at brands including Uber Technologies Inc., Johnson & Johnson and Beam Suntory Inc.” This is the case because brands are shifting investment behavior from traditional “marketing” to digital “experience.” A CXO embodies that idea of encapsulating every touchpoint a brand displays, with the experience employees and customers are receiving. 

The other half of the equation

But, as Denise Yohn, brand strategist and bestselling author regularly featured in CNBC, FOX Business TV, The Wall Street Journal, and The New York Times, stated in a recent Harvard Business Review article,  the “customer is only one half of the experience equation.”

Around 1 trillion is lost each year as a result of poor management and lost productivity stemming from disengaged or unmotivated employees, the other half of the experience equation. Customer experience and sales outcomes are often tied to individual employee performance and assessment. For one to be successful, the other must also perform. 

According to one study, happy employees are 85 percent more efficient at their work, providing a better experience to customers. By integrating and aligning CX and EX with a single CXO role, a company centralizes the value of making both employees and customers happier. 

“Empowering your front line,” as Deloitte found in its case study Customer- centricity Embedding it into your organisation’s DNA, creates an environment where individuals “feel they have a degree of creativity and empowerment within a structured framework, creating ‘magic moments’ of customer service.”

Research shows that “work units in the top quartile in employee engagement outperformed bottom-quartile units by 10% on customer ratings, 22% in profitability, and 21% in productivity — and they experienced lower employee turnover, absenteeism, and safety incidents. 

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Companies that MIT researchers classified in the top quartile of EX developed more successful innovations, deriving twice the amount of revenues from their innovations as did those in the bottom quartile. And their industry-adjusted Net Promoter Scores were twice as high.

By integrating the entire consumer journey of CX with EX through a single CXO role, a company centralizes the value in its customers and employees alike.

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