By Victoria Lakers
While traditionally a role for large enterprises, the Chief Customer Officer (CCO) is gaining traction in private equity (PE)-backed tech companies. The shift in focus from sales growth to customer retention, driven by subscription models and EBITDA-focused investors, is fueling this rise and bringing into increased focus the importance role of Customer Success in the process of value-creation. We have seen a very clear trend in the evolution of Customer Success into a strategic position in the executive leadership team, directly impacting the company’s growth and profitability. PE firms are now actively seek CCOs to champion customer focus even during early scaling stages.
Why the CCO Now?
Changing customer expectations and subscription models are driving the CCO’s importance. Customer success has evolved beyond basic support, becoming a strategic function ensuring customer value realization. The CCO ensures the entire company prioritizes the customer, from onboarding to ongoing engagement. Gone are the days of upfront payments and leaving implementation to the customer. New models require active efforts to ensure customers get value quickly, with the CCO leading the charge in retention and account growth.
The CCO: Functional Oversight and Initiatives
Traditionally, the full customer experience extended across departments including marketing, sales, support and operations. The CCO role unifies these functions under a single leader who champions the customer journey from initial awareness to ongoing loyalty and oversees all aspects of customer relationships post-sales. Additionally, where implementations, professional services, support, customer success (renewals) may have previously sat partly under the Chief Operating Officer or Chief Revenue Officer, now they are combined under a single C-Suite executive.
The CCO core responsibilities encompass a holistic approach to the customer, including:
- Implementation: Ensuring a smooth and efficient onboarding process that sets customers up for success
- Customer Support: Providing technical and strategic assistance to address customer needs
- Professional Services: Extending the value of the software beyond its core functionality with customizations, training, and strategic consulting services to help the customer optimize their use of the software and achieve their business goals
- Proactive Customer Success: Actively managing customer relationships, driving adoption and engagement, and preventing churn through initiatives that boost Net Promoter Score (NPS), Customer Satisfaction (CSAT), and retention rates
Beyond Post-Sales: Shaping the Customer Journey
The CCO’s influence extends beyond the post-sales phase. Modern customer success functions are proactive, using data to identify at-risk customers and take preventive measures. This approach provides valuable insights that benefit product, sales, and marketing teams. CCOs are focused on shaping the customer journey from the initial touchpoint onwards. This involves crafting customer personas and developing journey maps to understand customer needs and expectations at every stage. The CCO then implements strategies to optimize acquisition, retention, and customer advocacy. They oversee customer lifecycle management, ensuring a seamless experience across all touchpoints, from onboarding to loyalty programs. Additionally, the CCO leverages data to drive product development, marketing campaigns, and service improvements, all focused on building strong customer communities and positive word-of-mouth marketing.
Success Metrics: Data-Driven Customer Centricity
Much like in other functions, PE firms seek a data-driven CCO who can excel in maximizing and reporting these key metrics across customer cohorts, verticals and customer size, helping improve metrics and shape the company strategy. Metrics include:
- Customer Retention Rate: Low churn signifies customers find long-term value. Retaining existing customers is always more cost-effective than acquiring new ones
- Customer Lifetime Value (CLV): Increased CLV boosts revenue and profitability through customer success and upsell/cross-sell opportunities
- Customer Satisfaction (CSAT): Measures how satisfied customers are with the company’s products, services, and overall experience, and promotes loyalty among customers
- Net Promoter Score (NPS): Gauges customer loyalty and their likelihood to recommend the company to others, reflecting a strong customer-centric culture
- Time to Value: Efficient onboarding processes help customers quickly realize the value of their investment
- Customer Support Effectiveness: Prompt issue resolution and strong response times enhance customer satisfaction
- Customer Health Score: This internal metric identifies at-risk customers for proactive intervention
- Upsell & Cross-Sell Revenue: Collaboration with sales and marketing unlocks upsell/cross-sell opportunities
- Customer Advocacy & Referrals: Strong relationships lead to increased referrals and positive word-of-mouth growth
- Customer Feedback & Actionable Insights: Processes for gathering and translating customer feedback drive product and service improvements
Ultimately, the CCO’s efforts contribute to driving growth through measurable business outcomes like increased customer lifetime value, improved retention rates, and accelerated revenue growth.
Finding the Ideal CCO: Beyond Traditional Paths
The path to CCO isn’t linear, and diverse backgrounds bring valuable perspectives. While some may rise from VP of Customer Success, others come from support, professional services, or sales engineering. Regardless of experience, key competencies include:
- Customer Obsession: A genuine passion for understanding and exceeding customer expectations. Seek a leader who thrives on customer feedback and actively improves the customer journey
- Business Acumen: The ability to translate customer needs into business outcomes and understand how customer-centricity drives growth
- Analytical Mindset: Comfortable leveraging customer data to gain insights and inform decision-making. Look for candidates who can translate data into actionable strategies for customer acquisition, retention, and growth
- Leadership & Communication: A strong leader capable of inspiring a culture of customer centricity across the organization, with excellent communication skills to collaborate effectively with various stakeholders, both internally and externally
- Change Management Expertise: Skilled at navigating internal resistance and building buy-in from key decision-makers
- Innovation Mindset: A forward-thinking mindset and embraces innovation to create new ways of engaging with customers and delivering value
In conclusion, the CCO role has transformed from a customer satisfaction monitor to a strategic powerhouse driving growth and retention with a seat at the executive level. By championing the customer experience across the entire lifecycle, the CCO fosters a collaborative environment where every department works towards a common goal: creating loyal, thriving customers. As the tech landscape evolves, the CCO role will undoubtedly become even more critical. Companies prioritizing customer-centricity and empowering their CCOs will be best positioned for future success.