Conversations With Chief Customer Officers At USAA,

Key Bank, And Rosetta Stone

by Paul Hagen
with Harley Manning, Elizabeth Boehm, and Allison Stone

USAAs Wayne Peacock

Executive Summary
Wayne Peacock was appointed USAAs executive vice president, member
experience, in January 2010. Forrester interviewed Wayne as part of an
ongoing series to understand the role of a new type of executive that manages
customer experience at the enterprise level, a position most often called the
chief customer officer. USAA aligns all customer-facing resources in the
company under Wayne, amounting to about 9,000 staff members across the
companys marketing, channel management, sales, and service functions. He
describes this restructuring as the natural culmination of many years of work
on customer experience at the company and sees it as a step thats needed to
complete USAAs customer experience journey.

A profile of USAAs ChiEf CUstomer OFficer

As part of an ongoing series of interviews with chief customer officers (CCOs),
Forrester spoke with USAAs Wayne Peacock. Wayne reports to USAAs
chief executive officer (CEO) and is a member of the companys 11-person
executive council. Although he clearly fits the definition of a CCO, like roughly
a quarter of those in similar positions, he has a nonstandard title: executive
vice president, member experience. Our conversation with Wayne centered on
three broad categories:

Contents
USAAs Wayne Peacock. . ......... 1
Recommendations
Pave The Way For
A CCO..................................... 7

The impetus for appointing a CCO.

KeyBanks Trina Evans............ 8

The structure of his customer experience team.

Recommendations
Create A Foundation
For A CCO..............................12

The key activities on which he focuses.

Rosetta Stones Jay Topper....13

Motivation for appointing a cco

When we asked Wayne about the reasons USAA appointed a CCO, two rose
to the top: natural evolution and the desire to seize an opportunity created by
strong financial performance. The firms goal for its CCO is ambitious. Wayne
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Recommendations
Customer Success
Requires A CCO With
Power, Support, And
Clout......................................16

Conversations With Chief Customer Officers

seeks to move USAA from a company that is already successful on a product-by-product basis to one that is even
more successful because it operates as an integrated service network.
What Was The Breakthrough Moment That Led USAA To Appoint A CCO?
Wayne: Weve been on this customer experience journey for awhile now. We have done a lot without really
changing the business model. But we began to understand that we needed to take a quantum leap forward in order
to complete the integration journey. 2009 was the best year in USAAs history from the perspective of market and
financial performance. It might have been a time for us to rest on [our] laurels and feel good about where we were.
Instead we looked at it as an opportunity to make a play from strength.
Forresters take: USAA laid the foundation for appointing a CCO by making customer experience a strategic
mandate, fostering a culture that was receptive to a CCO, and creating a viable position one with power,
operational linkage, and budget influence. CCOs appointed before companies have laid this groundwork may
struggle with legitimacy issues. Time Warner Cables vice president of branded customer experience warns: I
could not have built the movement that I did if I had the CCO title.
What Does USAA Hope To Accomplish By Having A CCO?
Wayne: We wanted to elevate our game and start serving members in more of an advisory capacity than we have
done in the past. Our ability to serve members across a wide spectrum of products and services is much more
powerful than just helping them with a loan or insurance product. Its about knowing them better, being proactive,
and responding more holistically when they come to us: for example, when they come to us asking about auto
insurance and their real need is to buy a new car. We want to help members solve the need of buying a car rather
than just buying insurance.
Forresters take: USAA has taken tangible steps to make the vision of serving members holistically a reality, as
evidenced by its Auto Circle offering (see Figure 2). The current effort to organize the firms business structure
around customers builds on that foundation and should result in a big financial payback. Thats because a better
customer experience drives improvement for three types of customer loyalty: willingness to consider another
purchase, likelihood to switch business to a competitor, and likelihood to recommend to a friend or colleague.
How big is the opportunity? A 10-point improvement in Customer Experience Index scores can have a $606
million annual impact for insurance companies and a $212 million impact for banks.
organizational Structure
USAAs move is a radical realignment that centers the company on customers. The move has Wayne overseeing
all customer-facing resources in the company, which amounts to about 9,000 staff members across marketing,
channel management, sales, and service functions.

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How Are The CCO Position And Team Structured?

Wayne: I oversee USAAs marketing, channel management, sales, and service functions, which will amount to
about 9,000 people when we make the last transition of contact centers. It seemed to us that it would be logical
to operationalize our customer experience effort as opposed to trying to apply it from a small thought leadership
team somewhere in the organization. We have had that kind of thought leadership model informally for the past
several years. We are at a place now that if we want to do customer experience well, we need to make it how we
operate.
We needed to bring customer-facing employees together into one team and organize to accommodate how
members want to shop. Members want to move freely across distribution channels. They start a transaction online
and then may want to talk to an advisor before moving back online. And as mobile continues to emerge, they
will want to take that capability with them wherever they go. In the past, we had separate teams working on each
channel: usaa.com, mobile, and individual teams for each business contact center. We had to change the way we do
business in order to serve members more purposefully than we have done in the past.
Forresters take: USAAs approach raises the bar for its competitors as well as for other firms that seek to
differentiate based on customer experience. It throws out an age-old model of organizing by product line, lifecycle stage, and distribution channel in favor of one that revolves around the way customers actually interact. If
the company executes this new model well, it not only will improve the customer experience but also should drive
down the costs of redundant or irrelevant product development, improve revenue by doing a better job of crossselling services, and raise the level of interactions from inefficient handoffs to higher-value solution conversations.
Firms not yet mature enough in their customer experience efforts to appoint a CCO into a similar operational level
should at a minimum redouble their efforts to build bridges across organizational silos to ensure that customer
interactions are effective and easy.
Why Did USAA Decide To Put Marketing Under The CCO?
Wayne: Marketing wasnt part of the blueprint when we started this exercise. We decided that if we were to do this
well, we needed to make the marketing group part of the organization. Classically, we have pushed out messages
to sell products. What I want to do moving forward is to understand members deeply, to understand their dreams
and aspirations, and to orchestrate a series of conversations over time that helps them to reach those dreams and
aspirations. That begins to look like marketing of the future.
Forresters take: We like USAAs approach, which aligns marketings role of making the brand promise with the
parts of the organization that fulfill the brand promise. While we have seen many chief marketing officers wrap
themselves in the customer experience flag, we remain unconvinced that the structure and focus of most marketing
organizations can deliver success beyond slogans. One important reason is that marketing organizations typically
lack operational control over the actual delivery of the experience, something that Waynes organization does have.

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Why Isnt Product Development Under The CCO?

Wayne: Weve created a product management council that has both the strategists and the insights folks from my
team plus the senior product leaders from business lines. New product designs and features for existing products
are based off of member insight and research that we do on my team [and] then taken back to the business lines.
Everything starts with the member, and that informs our experience design and our product design decisions. We
want to build products that meet members larger needs, as opposed to an old mindset, which said that if you are
in the insurance business, make more insurance products.
Forresters take: USAAs model offers a compelling alternative for companies having trouble competing with
typical approaches to product innovation. By breaking down product-line silos and starting with a holistic view
of the customer, the company is even more likely to create products that meet real-world customer needs. The
approach clearly works: USAA has already demonstrated the ability to create innovations like its Deposit@Mobile
service, which lets members deposit checks by taking a picture of them with their smartphones.
Key ActIvities
Similar to other CCOs we have interviewed, Wayne emphasized the amount of time he spends evangelizing
customer experience efforts. But his job goes far beyond cheerleading: The company judges his work on how well
he drives a mix of financial and customer experience efforts.
How Do You Spend Your Time?
Wayne: I spend most of my time talking to staff or strategizing about how we change the business model for
USAA. Whether Im talking to big groups of people about the vision or talking to smaller groups about how we
organize our programs for success . . . its about communications from a leadership perspective.
Beyond that, we have ongoing operational work. Weve been working on a voice of the customer program for the past
15 months. The big part of our effort is to connect the many disparate avenues for feedback into one repository where
we can analyze it and then get that information back out to business leaders across the organization so that they can
take action. Our [voice of the customer] data uses our enterprise data warehouse infrastructure as its repository, and
we use the business intelligence capabilities on the backside of it to deliver insights. Without the work on this data
warehouse, we wouldnt be able to accomplish what were doing today. This work has been part of the integration
journey that has been underway for the last few years. Were in year three of a five-year effort.
Forresters take: Wayne notes that USAAs realignment could not happen without this upgrade to its technology
infrastructure. At least half of the CCOs we spoke to for Forresters The Rise Of The Chief Customer Officer
report are involved in customer relationship management (CRM) and/or data warehousing efforts. This makes
sense because a companys technology infrastructure can significantly affect a firms ability to deliver good
customer experiences. New CCOs should investigate their firms CRM ecosystems and data warehouse to
understand how much work is necessary to shore them up. Otherwise, neglected infrastructure could undermine
their employees abilities to deliver good customer experiences and stop the CCO from succeeding.

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Conversations With Chief Customer Officers

What Metrics Does The Company Use To Monitor Your Success?

Wayne: My metrics are pretty simple: 1) member growth; 2) depth of customer relationships; 3) traditional
measures like member satisfaction and advocacy; and 4) cost metrics.
I will likely translate the depth-of-customer-relationships metric into something more sophisticated in the future,
like measuring how well we facilitate our mission of helping members with their financial security. Its easy to
look at it in tangible terms like how many products members have, but the real opportunity is to understand
peoples needs and see how well were fulfilling them. My cost metrics include the things you would expect around
continuing to drive more efficiency into the system through the integration.
Forresters take: USAA established a balanced set of detailed metrics for its CCO. Not everyone is so fortunate.
Customer experience leaders often get their bonuses tied to mega metrics like improving a companywide Net
Promoter Score, even though they can take years to move, even when the company is doing the right customer
experience improvement projects. As result, new CCOs need to exercise caution and negotiate their personal
success metrics carefully.
What Are Your Strategic Priorities For 2011?
Wayne: We thought of 2010 as a preparing the battlefield year, so we focused a lot on culture, building the team,
communicating the business case, and making high-level functional design and organizational change. In 2011,
we will focus on two big ideas: 1) building out member journeys and experiences around those journeys, and 2)
human-capital changes.
For the first priority, the hard work is around deeper-level process design so that the organization can operate in
an integrated and repeatable fashion that is highly efficient. Its not sexy, but we are working on getting the pipes
trimmed and aligned so that we can do this really well.
On the human-capital side, we want to infuse the sales culture with the idea of building relationships and meeting
needs. We need to broaden their product-level skills so that they can help members in a more holistic fashion than
theyve done in the past.
Forresters take: The end game for customer experience is embedding it deeply in the DNA of the company
culture. USAAs focus on the human-capital side is critical, which requires significant time spent on making
sure that the human resources department is on board. Companies can do this by pulling three levers: hiring,
socialization, and rewards systems.
What Have Been Your Biggest Challenges?
Wayne: The biggest challenge has been that we have done well as a company in the past. The lines of business
presidents are very confident that our current way of doing business serves them really well. Our challenge
is to convince them that the new way will serve them better and not introduce more risk into their business
environment.

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Conversations With Chief Customer Officers

Like any big change, you have to start with painting a vision of what can be in the future, how that will be different
from the past, and who will benefit. The rest of it is about planning, organizing, and executing, which is substantial
when youre moving 9,000 employees across the company.
Frontline employees have been powerful advocates in leading the charge for the change. Our biggest wins this past
year have come from the frontline employees who see the opportunity, who value the change, and who are telling
their peers and bosses how excited they are. Employees see this as a way to broaden their skills, operate across a
much wider array of products, and serve members better.
Forresters take: Engaging employees early in customer experience efforts is a powerful tool, which we heard often
from CCOs. Firms that implement a voice of the employee (VoE) program in parallel with a voice of the customer
(VoC) program will identify policies and processes that undermine employees ability to serve customers. In
addition to helping find and fix problems, these empowered employees also give CCOs new advocates to promote
the customer experience cause.

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R eco m m e n d at i o n s

Pave The Way For

A CCO

Forrester believes that CEOs considering a CCO should establish several

preconditions for success. Consistent with our framework, our conversation with
Wayne Peacock yielded this specific advice:

If youre not committed to large-scale change, dont appoint a CCO. As

Wayne Peacock puts it, If you are not committed or you dont think the
company can make those changes, it is wasteful to go down the path. One
clear readiness indicator is whether your company is willing to create an
explicit customer experience strategy and, if necessary, revise the overall
company strategy to make it more customer-centric. If the organization
cant make that level of commitment, its a sign that your executives arent
prepared to take the CCO plunge.

If you are committed, translate your strategy into a clear agenda. A

customer experience strategy provides a shared understanding of what

success will look like if the CCO achieves his or her objectives. To reach that
end point, however, firms need to put milestones in place so that customer
experience professionals can rack up early wins to build momentum and gain
support among skeptics. For example, top executives at Sage set annual goals
for each business unit that combine both customer experience and business
objectives. Customer experience leaders then conduct regular reviews to
track progress against those goals and hold their peers accountable.

Then build a business case that justifies the position. USAAs business

case for its customer experience effort (and CCO) had three tiers: 1) serving
members better; 2) creating an environment for employees to be their best;
and 3) achieving better business results. This aligns well with Forresters
research, which shows that customer experience professionals need to build
business cases that appeal to executives on three levels: authority, logic, and
emotion. When building your own business case, start by understanding
the top influencers youll be presenting to, classifying their current level of
support, and creating customized action plans and progress trackers.

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Conversations With Chief Customer Officers

KeyBanks Trina Evans

Executive Summary
Trina Evans was appointed as KeyBanks executive vice president (EVP) and director of client experience in April
2010. Forrester interviewed Trina as part of an ongoing series to understand the role of a new type of executive
who manages customer experience at the enterprise level, a position most often called the chief customer officer.
At the time of our interview, Trina oversaw a centralized customer experience team whose role is to champion
the client across the enterprise and across channels. As part of KeyBanks executive council, Trina was a peer of
regional presidents and other business-line heads, which let her shape activities, influence priorities, and weave
customer imperatives into strategic and operational plans. Subsequent to this interview, KeyBank promoted Trina
to corporate center executive, a direct report to the CEO.

A profile of KeyBanks ChiEf CUstomer OFficer

As part of an ongoing series of interviews with chief customer officers (CCOs), Forrester spoke with KeyBanks
Trina Evans. Subsequent to this interview, both Trina and her boss Beth Mooney were promoted. Trina, now the
corporate center executive, continues to report directly to Beth, who is now KeyCorps chairman and CEO. In her
new role, Trina works within the management committee to ensure the alignment of objectives, priorities, and
messaging for the CEO, the leadership team, and their teams. She also works with internal and external partners to
move forward strategic initiatives and select special projects.
At the time of the interview, Trina was the top leader of customer experience efforts for KeyCorps Community
Bank, which operates more than 1,000 branches, 1,500 ATMs, and three call centers across the companys 14-state
footprint. Our conversation with Trina centered on the motivation for appointing a CCO, her key activities, and
the organizational structure of her team.
Motivation for appointing a cco
We asked Trina why the company appointed a CCO. She pointed to three primary reasons: 1) the view that customer
experience is a way to grow revenue; 2) the need to drive voice of the client insights into decision-making processes;
and 3) the goal of increasing employee engagement and enablement as part of a robust service culture.
What Was The Breakthrough Moment That Led KeyBank To Appoint A CCO?
Trina: The arrival in 2007 of our new Vice Chair Beth Mooney was the beginning of our transition. She focused us
on a community banking model with an emphasis on building enduring relationships as a way to grow profitability.
The watershed moment for us was the realization that we had lots of voice of the client data coming from
different channels, but it wasnt getting into our decision-making process. Leaders within some channels were
using the information, but it wasnt being used consistently enterprisewide. We realized that the company needed to

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have a third-party office that was a constant advocate for the client, that would bring the clients voice into decisionmaking, and [that would] manage the target client experience.
Forresters take: Trina, who was appointed to her position in 2010, joins a host of other freshman customer
experience executives in fact, 55% of the CCOs we researched in January 2011 had been on the job for a year
or less. Similar to other firms, her appointment came about after several years of customer experience efforts
at the company and was prompted by a change in leadership. KeyBanks realization that it needed an executive
champion to bring customer experience concerns into the mainstream decision-making process was spot on: The
lack of customer experience management processes is one of the top three obstacles to improving the customer
experience that firms deliver. Firms that put a centralized team in place reduce that barrier.
How Is The CCO Position And Team Structured?
Trina: I report to KeyCorps Vice Chair Beth Mooney, who runs the companys Community Bank, which includes
retail and business banking, wealth management, private banking, investment services, and mortgage products. I
sit on the companys executive council and am a peer of the regional presidents and other business-line heads.
I run several areas in addition to customer experience. My customer experience team has two strategists and five
field advocates, managed directly by a senior vice president. The field advocates, who are aligned with regions,
disseminate service measurements and voice-of-the-client feedback to field staff. They spot problem areas
that prevent employees from delivering the target experiences. The strategists and field advocates partner with
businesses to drive the desired experience into strategy and operational plans. The strategists also work on a dozen
or so problems identified by staff monthly, from process to technology issues.
Forresters take: Trina and her team play an advisory role. This is significantly different from the operational
role of the customer experience teams at USAA and Boeing, which Forrester has also profiled. Both structures
can be effective, and Forrester recommends that customer experience leaders pick the one that has worked most
successfully for strategic change initiatives at their firms in the past.
Key Activities
Like other customer experience leaders we have interviewed, Trina spends a significant portion of her time
evangelizing customer experience efforts and creating a shared understanding at the executive level of the company.
How Do You Spend Your Time?
Trina: In addition to customer experience, I also run desktop and information management, rewards and
recognition, the risk management office, and the strategic planning process. Because of the way that the various
parts of my organization are aligned, it has tremendous leverage. I essentially clear the way for my team, which
focuses on the day-to-day customer experience opportunities.

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Conversations With Chief Customer Officers

10

One of the more important roles I play is to bring the customer experience perspective into top-level meetings.
I am able to shape what is happening at the highest levels, create a broad circle of influence, and give input on
priorities. I see other CCOs [who] are either aligned to one part of the organization, like marketing, or stand alone
and report to the CEO but dont have tentacles to other parts of the company. The standalone customer experience
leader is sometimes anemic; its like having superpowers that cant be used.
Forresters take: As a peer on the firms executive council, Trina is able to gain executive support on a day-to-day
basis, which is something that firms without such a leader often struggle to get. When customer experience leaders
build the business case for their efforts, they should start by understanding the top influencers, classifying each ones
current level of support, and then creating personalized action plans. They should go on to develop a portfolio of
projects and pilots that support the business goals of these top influencers. Once theyve achieved some measured
successes, they can publicize the results to build a coalition of new leaders who support customer experience efforts.
What Are Your Top Strategic Priorities This Year?
Trina: Our team has four priorities this year: 1) a training tool kit to help area and branch leaders coach sales staff
on how to service clients in a way that builds sales; 2) faster, one-time-and-done problem resolution in response
to client feedback; 3) greater transparency of the status of service requests for both employees and clients; and 4)
foundation coursework for new and existing employees. We found that groups [that] make good use of coursework
perform better on satisfaction scores.
Forresters take: Two of KeyBanks priorities focus on training, which is an important element when building a
customer-centric culture. Forrester encourages firms to utilize three important levers in focusing its culture: hiring
(e.g., recruiting and selection processes), socialization (e.g., training, storytelling, rituals), and rewards (e.g., formal
and informal incentives).
What Have Been Your Teams Top Wins Over The Past Year?
Trina: Three recent wins have been important to our team:

Creating a consistent way of measuring customer experience across the company. Each business unit

used to conduct surveys on [its] own, sometimes by email and other times by mail, each with a different set
of questions. Our customers cross channels, so we wanted a consistent way to measure them and make the
comparison across the channels.

Embedding service training into sales training. Knitting a service tool kit together with the sales tool kit was
a very big win for us. Now salespeople will be coached to service well, not just to sell more.

Getting external validation. The validation weve received from places like J.D. Power and Associates and
ACSI have helped energize employees and senior leaders. Everyone enjoys the external confirmation.

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11

Forresters take: Establishing consistent enterprise metrics is an important early step in any customer experience
transformation journey. As firms gather more sophisticated data about customer experience, they build models that
capture the complex mix of factors that influence customer decisions. For example, executives at Southwest Airlines
are already working on models that show the correlation between changes in subjective metrics and a lift in outcome
metrics, such as the likelihood to make Southwest customers first choice when booking a flight. These metrics
become a powerful tool for customer experience teams to drive employee change and build executive support.

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R eco m m e n d at i o n s

Create A Foundation
For A CCO

12

The appointment of a CCO will not by itself make a company customer-focused.

Rather, Trina advises firms considering the appointment of a CCO to create a
foundation that leaders can build upon. As she puts it: If a company hasnt built a
good foundation, theres no point in appointing a CCO. On the other hand, there
comes a point at which you cant move forward without someone advocating for
the experience across the enterprise. Trina offers a few pieces of advice for those
considering a CCO:

Set clear expectations with employees. Trina says: Firms need to define

in the simplest terms what client-centered activity looks like. They have to
bring it to life make it real and tangible. This starts to set expectations.
At the same time, companies need to deliver adequate tools and training
to help employees deliver on promises. Otherwise, dont bother with a
CCO . . . the position will just churn, which sends a very powerful negative
message to employees. Forrester agrees. A portfolio of customer experience
projects, engaged employees, and involvement by the human resources (HR)
department signal that the firm is ready to appoint a customer experience
executive.

Ensure alignment of executives. Trina advises: Make sure that the set

of peers have strong philosophical alignment around what the company

is trying to accomplish. Then ensure that the chief customer officer is
positioned as a peer to those who are running different segments. Our
research supports her assertion that before putting a CCO in place, firms
should make sure that there is strong agreement on both what the company
seeks to accomplish with the position and how it can help deliver on specific
objectives and outcomes.

Tie the position to the operational mechanics of the organization.

Trina recommends that the position needs tentacles to other parts of the
organization. It needs knowledge of the operational mechanics of the company
as well as the team who can help to make change. For teams structured in
an advisory capacity, such as the one at KeyBank, this operational linkage is
all the more critical. Firms should ensure that CCOs have the ability to break
down and mediate across organizational silos. This means establishing a
governance structure that arbitrates resource allocation and activities.

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13

Rosetta Stones Jay Topper

Executive Summary
Rosetta Stone appointed Jay Topper to the role of senior vice president of customer success in 2009 to help the
firm make a radical transition from a product company to a services model. The new position aligned all postsales groups under Jay, who took on the task of coordinating customer interactions to drive both engagement
and satisfaction. Jay and his team are now able to boost customer satisfaction as well as the firms bottom line
by carefully monitoring and improving customers service usage at all points of the language learning process.
Forrester interviewed Jay as part of an ongoing series to understand the role of this type of executive orchestrating
enterprisewide customer experience, a position that Forrester calls a chief customer officer (CCO).

Rosetta Stone Appoints A CCO To guide the Transition from product to service
Rosetta Stone is a $260 million language learning company that aims to make language acquisition fun, easy, and
effective. The firm recently transitioned from a product-focused model of selling CDs to a services model that
supplements software-based learning with online companion activities such as language coaching and interaction
between learners. The firm decided that it needed a CCO position to guide its transition and ensure that the
company gained the competencies that drive success in a services-oriented industry.
As part of an ongoing series of interviews with CCOs, Forrester spoke with Jay Topper, senior vice president of
customer success at Rosetta Stone, to learn about how the company set up his organization and responsibilities.
Centralized Customer Experience Aligns Rosetta Stones Organization With Its Strategy
As the firms chief information officer (CIO), Jay was heading up a new customer relationship management (CRM)
implementation as part of the transition when he realized that the fragmented nature of different services groups
would not support the kind of relationships the organization sought with its new model. Rosetta Stones senior
management realized that the new technology alone would not solve the problem, so it:

Created a CCO position that reports to the CEO. The executive management team agreed with Jays

assessment and created a new position the senior vice president (SVP) of customer success to oversee
and unify the firms new customer strategy. As someone who understood the companys goals, technology, and
culture, Jay was tapped for the position. I didnt have any designs on the position, but the management team
felt like it was easier to find a new CIO than to fill this position. The CEO looks at my group as one of three
strategic pillars along with product and brand/marketing. So he made me a direct report, explained Jay.

Aligned all post-sales functions under the CCO. Unlike many centralized customer experience teams that

play more of an advisory role to other parts of the organization, Jay has operational control over Rosetta
Stones service delivery organization. Jay explains that this organization is responsible for everything after the
initial sale, whether consumer or business-to-business (B2B), US or international. We encompass traditional

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14

customer service, product support, CRM, and product-related components like our live online instruction and
concierge services.

Strengthened connections with the marketing and product divisions. Although Rosetta Stone didnt fold

control of pre-sales activities into the position as others have done, Jay has gained responsibility for B2B
account managers and call center sales as the position has evolved. Jay told Forrester that this was part of an
ongoing alignment between the product, marketing, and services groups. The amount of time I spend with
marketing, sales, and brand now versus two years ago is up by 20 times. One way or another, these groups
need to be really intertwined and push on each other.

Leveraged behavioral personas to drive alignment. Rosetta Stone uses personas to understand consumers

motivation for learning a language and to align services to those customer needs. Says Jay, One person may
be rehabilitating his brain after a stroke, and another may have personal enrichment reasons. The behavioral
personas have enabled us to go back upstream to the people who are just starting language learning and be
more specific about how we message to them. When we were a box product culture, we focused only on buy,
buy, buy. As a service organization, we are using the personas to help us transition to here is something that
you can use to reach your goal. Our big word now is nurture.

Measurement Links Customer Satisfaction With Company Success

Like many firms, Rosetta Stone has adopted Net Promoter Score (NPS) as a key metric. But measuring NPS is only
one part of how the firm understands customer experience. Jay told Forrester:

Product usage is a strong predictor of NPS . . . and renewals. For Jay and his company, success comes down

to a combination of satisfied usage and the right touches. Jay says, My number-one metric is what we call the
usage funnel. It starts at purchase [and] includes online activation, logins, taking a studio coaching session,
and average hours using the product. This is our bread and butter in terms of both revenue and customer
experience. People who socialize within the product experience (e.g., take a coaching session) have a 20-point
jump in NPS. People who socialize outside of the direct learning experience (e.g., participate in a webinar):
Their usage more than triples, their renewals more than triple, and their NPS can jump up over 70.

Usage and satisfaction are key employee metrics. Jay said that employees down to the agent level have

compensation tied to usage. We have a group of concierge agents who solely focus on usage. They are
constantly testing and identifying what works. Top agents that are able to stimulate learners and find the
secret sauce for usage are definitely compensated accordingly. Those people who crack the code are incredibly
valuable to this organization.

Future Customer Experience Activities Mature Beyond The Basics

In his first two years as CCO, Jay implemented a solid customer experience foundation. He and his team built a
voice of the customer program, invested in personas, and identified activities that drive key customer experience
and financial metrics. When we asked him about his strategic priorities for the next year, Jays answers indicate that
the firm is moving beyond the basics. Key initiatives include:
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Conversations With Chief Customer Officers

15

Automating processes that drive scale. Many of the smart touches the company has with customers to date

are manual. Jay recognizes that the company needs to build in some automation to scale the effort. According
to Jay: We are working to put the business rules in place to automate the interactions we are now doing mostly
manually. We now have enough data and the personas to know the kinds of different interactions that help
different customers move from one stage in the learning process to the next. We know if a customer gave high
satisfaction ratings for a learning module, he is likely to sign up for a coaching within a couple of days if we
give him a little nudge.

Creating a plan for global customer experience expansion. Rosetta Stone is looking to replicate the

operational improvements it has made in the US market into growing markets across the globe. Jay says: I will
spend a lot of time helping with the architecture of those organizations so they stay tightly aligned with what
were doing here. We will largely replicate our existing organizational structure and approach, though well
likely tailor certain elements to the local markets. Our hypothesis is that at the root level, there are a lot more
commonalities among learners than we think. People want to learn a language, its not easy, and they have a
reason motivating them to learn.

Embedding social support into the product. To date, Rosetta Stones social media initiatives have largely

revolved around marketing and service, but Jay sees great potential in enabling social within the product itself.
What has me most excited is when our guest coaches and concierge agents socialize with a learner who is
afraid of taking a section for some reason. The likelihood of that customer going to the next level goes from 0%
to nearly 70%. Whether its a coach or another learner on Facebook, it stimulates engagement with the product,
which improves our Net Promoter Scores.

Translating personas into B2B service improvements. Jay indicated that personas are helping Rosetta Stone
extend its relationships with B2B customers. When we sold to Booz Allen or the Army, we looked at the
company as a demographic. Thats crazy! There are different personas within the institution. But Jay is still
looking to extend personas further: There are a lot of complexities involved with our B2B customer, because
we are also serving the overall overseer of the language program, which could be human resources, training,
or some other department in a company. At this point, whats most important to us is focusing at the learner
persona level. We have not yet mastered the personas for others.

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Conversations With Chief Customer Officers

R eco m m e n d at i o n s

Customer Success
Requires A CCO With
Power, Support, And
Clout

16

Rosetta Stone is not unique in transitioning from a product-focused company

to one whose success depends on service and customer engagement. This kind
of transition is happening with a broad range of B2B and business-to-consumer
(B2C) companies. For example, Crown Equipment is including sensors in its
forklifts to enable usage-based services, Nike is building out its net-connected Nike
Plus devices, and Zeal Optics is embedding an Android operating system into its
next generation of ski goggles. These and other companies will find that a servicesfocused approach will change the skills and competencies they need within
their organizations to create and refine customer experiences that build loyalty
and mutual benefit in a service-focused market. Forrester believes that these
companies will do well to have a centralized customer experience organization,
headed by a strong CCO. To boost their chances of success, firms should:

Make the CCO a direct report to the CEO. To succeed, companies must

give a CCO the clout and tools to transform the way a company operates.
To do this, firms need to create a position that has: power, operational
linkage, and budget influence. The best way to do this is to have the CCO
report directly to the chief executive officer (CEO) so that the CCO has peer
status with other executives. In addition, ensure that executive management
teams uniformly understand and support the position by building customer
experience into the company strategy and adopting companywide customer
experience metrics that correlate with key business performance outcomes.

Hire a CCO whos passionate about the customer . . . but credible as well.

Forrester found that about 83% of CCOs were internal hires with a median
of eight years of tenure with the firm and most often held general manager or
division president positions prior to the appointment. Because the customer
experience organization gets most of its work done through others, the ability
of its leaders to influence people across the business is critical to long-term
success. Look for someone who has a broad range of experience, skills at
defusing politically charged situations, passion, pragmatism, persistence, and
a natural desire to collaborate across organizational boundaries.

This document is excerpted from the following Forrester Research reports: the February 15, 2011, Conversations With Chief Customer
Officers: USAAs Wayne Peacock report; the June 3, 2011 Conversations With Chief Customer Officers: KeyBanks Trina Evans report; and
the November 15, 2011 Conversations With Chief Customer Officers: Rosetta Stones Jay Topper report.

2013, Forrester Research, Inc. Reproduction Prohibited

Thrive In The Age Of The Customer

Face it: you need your customers more than they need you. Thats why Forrester
has in-depth research and analysis, tools, and solutions to help you craft a customer
experience that boosts revenue, drives down costs, and earns customer loyalty.
Visit solutions.forrester.com/customer-experience to get complimentary research
and advice on moving your customer experience forward.

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