Updated: May 22
Your customer experience reporting structure matters more than you think.
Today a local board member of a large organization stopped me at the gym and was telling me about the customer experience struggles their organization was having. Being familiar with this organization, I know their customer experience department reports to a very narrow and specific department with no real influence over the parts of the organization that can drive improvement, which I know is not helping make them successful.
But how do you know whether your customer experience efforts will be successful in your current reporting structure? How do you know what the right reporting structure is?
I started thinking about how organizational design and reporting structure can help or hinder a company and its focus on the customer. Organizations might not realize this is one of the key contributing factors to not being successful with experience efforts. In the span of our conversation, it became clear to me that the organizational alignment of a customer experience department was one of the primary factors in an organization’s customer experience success.
In our experience, there are 3 primary areas that can help determine whether your reporting structure for customer experience (or employee experience) will be successful. They are:
Organizational Support Services – such as marketing, HR, IT
A seat in the C-suite
The first requirement of a successful customer experience program is the prioritization and involvement of the executive team. The customer or employee voice (stories) and indicators (data) must be something that the executive team is committed to reviewing and discussing on a very frequent basis. After all, the organization couldn’t exist without them.
As a customer experience professional, I’ve seen first-hand how important it is for a customer experience director or higher-ranking employee to frequently report to the board or the executive suite so they can understand what is happening in the organization. The executive suite’s role should be creating focus and removing barriers for customer experience or employee experience initiatives.
The customer experience director (or above) should have a loud advocate with a seat at the boardroom table if it isn’t themselves. This ensures that all decisions and conversations have a customer focus, and center around what is good for the customer, which in turn is good for the business.
Operations and the front of the train
The truth is, if your operations are struggling, your customer and employee experience is struggling also. Not only is this because a lot of people in an organization are in operations, but they are the front line to the customer (typically). That is why it’s so important that your customer experience team has a direct line to (or through) operations.
In systems such as healthcare, identifying who oversees “operations” is not as clear as with a retail structure . Therefore, it is important to identify a group of operations directors who report to, and are responsible for, the customer experience in their immediate areas.
Customer experience and these operational areas work hand in hand to identify experience issues and make plans for improvement. I have seen operations departments that think the customer experience director is going to fix everything for them. The director will tell them what the data is and make the plans to execute a solution. This is a recipe for failure.
To have a success in customer experience, you should ideally have direct influence over these operators in some capacity. That might be through the C-suite, or you might be a peer or above these operators.
Your supportive team departments
Support departments can be just as important as operations, as they typically provide the systems and processes that the customer doesn’t see, but that help drive your customer experience program forward.
Marketing and Customer Experience
Marketing is a key partner in customer experience improvement, as they ideally should understand the customer purchase and interaction behavior and align the brand to the experience. One of the first activities we do when coming into a new organization is working to understand the brand sentiment from a customer and employee perspective and evaluating if it’s aligned with the experience.
Your Marketing and Experience departments are like peas and carrots, peanut butter and jelly. In very successful organizations, I have seen Marketing and Experience reporting to the same person, or the marketing department reporting directly to Customer Experience (which is my preference).
HR and Customer Experience
Human Resources is a key department because they are responsible for the relationship team members have with an organization. If an organization has leaders who are not set up for success, not well trained or don’t have clear processes, then experience efforts are doomed to fail. In addition to leadership, your people need to understand their roles, have clear procedures, and feel connected and engaged with the organization.
Like marketing, Human resources and experience are tightly interwoven. The experiences they’re responsible for cannot be separated. From an organizational design perspective, I like to see a key liaison with HR ensure that the HR projects are aligned with the mission of the customer experience team. In addition, they can create an employee experience together that creates a work environment that is supportive and engaging.
IT and Customer Experience
IT is an important department in the sense that it controls the systems that your people and customers will ultimately use. We have all had experiences of poor interfaces, confusing screens and absence of logical flow. Making things easy for your customer (or the people that support them) is a winning strategy, as the technology becomes as important as human interaction.
In terms of organizational design, IT does not need to report to experience, but they must work closely together for a common goal. As with Human Resources, we strive for partnership frameworks that keep customer experience top of mind for IT, and all levels of the department. Some of my best allies have been in IT, as I find they take the customer experience very seriously and when they understand their role in the experience, they make it their mission.
The organizational design for customer experience
The ultimate question (when it comes to customer experience organizational design) is what department should Customer Experience report to?
We have seen many different iterations with Experience reporting to any one of the departments above – Marketing, Human Resources, Operations, etc. When other working CX Professionals were asked, 83% agreed that the department should report to the C-Suite. Other departments such as marketing scored significantly lower.
83% of CX Professionals agree that customer experience should report directly to the C-suite level.
Ideally, every organization should have a Chief Experience Officer (CXO) or Chief Customer Officer (CCO) that is a member of the C-suite. This allows them to have a seat at the table, and influence all parts of the organization mentioned above.
However, many organizations are not ready for this type of large commitment, nor do they have the resources to move in such a bold direction. For these organizations, taking a thoughtful approach on customer experience goals is a good place to start.
What questions should you be asking to know if your customer experience efforts are aligned correctly? Download our guide to assess what factors to consider when deciding your organizational fit.
Does the reporting department have influence over the entire organization?
Would the experience department be able to have influence in strategic decisions that might affect the customer?
Where is the customer data and information about the experience currently housed?
What is our ideal state for our customer experience?
What department has the most influence over this ideal state?
What are the systems I currently have in place for improving customer experience?
Assessing your organizational goals, organizational design and reporting structures can make a real difference in how successful your customer experience efforts are.
Regardless of how your departments interact, collecting customer sentiment, creating a focus on the customer, and socializing the customer sentiment and stories to create a service culture are great places to start. Their positive impacts will reverberate throughout the organization.
Getting Started with Customer Experience
It's now time to get started! If you are a department manager, store manager or operational executive, we've designed this workbook for you. It will enable you to take the first steps to change your company culture and be more focused on customer needs.