CEO SURVEY SAYS: CUSTOMERS COUNT
CEO SURVEY SAYS: CUSTOMERS COUNT
By Martha Rogers, Ph.D. (Source: 1to1Weekly)
After years spent dealing with issues revolving around governance and regulatory changes, CEOs at public companies are focusing more on a long-overlooked aspect of their business: customers.
That's one of the main conclusions drawn from the third annual "NYSE CEO Report," compiled for NYSE Magazine by Opinion Research Corp. The survey collects data from CEOs of 240 of the New York Stock Exchange's listing companies.
"CEOs now have more of a chance to focus on what we all feel CEOs would, and should, want to focus on," says Jeffrey Resnick, president of Opinion Research Corp., "and that's their relationship with their customers."
For example, CEOs are planning greater investment (both budget- and time-wise) on managing customer relationships than in the past. The importance of sales growth -- driven by customers -- as a performance measure has increased by 11 percent since the prior study. And on the strategic side, brand, reputation, and investments in corporate social responsibility -- all focused on winning customers -- are increasingly important. CEOs continue to recognize the costliness of losing customers.
What's more, they're putting money where their mouths are. Almost one third of CEOs plan to spend more time on customer relations in the coming year, while more than half expect to spend more money on customer contact.
Noting that 20 percent of respondents identified "customer satisfaction" as the most crucial element in their long-term success as a CEO, Resnick says, "20 percent is terrific. Would we all like to see it at 40 percent? Well, yes, but if we think about what goes on in managing a large corporation, the fact that 20 percent say they are focusing on the customer in such a way with everything else they have to do, the proportion is pretty great."
The report also found a 10 percent increase in the amount of time a CEO feels he should spend on customer relationships. "That's very forward-looking, instead of being mired down in the regulatory issues," Resnick says. "If you read between the lines, the customer can expect stronger partnerships with the firms they're developing relationships with. On average, CEOs are now spending more than half their time preparing their organizations to deal with a world that is ever more customer-centric."
The reality isn't idealMost CEOs (81 percent) believe they take sufficient action to manage their companies' reputation, but Resnick says that many customers would disagree.
"For quite a number of years, what has continually been reinforced in the minds of the general public by the media has been the fact that they generally don't hear about a CEO doing great things," he says. "It's been more about CEOs getting arrested, corporate scandals, things like that. It takes time for that perception to go away."
Going hand-in-hand with the issue is an increased focus on social responsibility, which Resnick says is an important factor not just in customer relations and retention, but in employee retention as well. Social-responsibility initiatives are seen as having a greater impact on employee retention in companies with greater than $3 billion in market capitalization (where 46 percent of respondents tagged it as an important factor in employee retention), compared with companies with $1 billion to 3 billion in market cap (16 percent) and below $1 billion (29 percent). Such initiatives range from encouraging employees to volunteer at homeless shelters to instituting and enforcing environmentally friendly ideas like recycling and tree planting.
Simply making a show of cutting a big check to charity no longer works, he says. "CEOs need to ask, Why are we doing this? Is it because there's a perceived good PR benefit, or does it reflect a core value of the organization to be a part of the culture?"
Noting that the 2007 survey is subtitled "Putting Customers First," Resnick says that customers should be able to count on being an increased focus down the line. "It's all reflective of a common theme," he says. "Without the customer there is no business."