Where Should Customer Experience (CX) Teams Live Within An Organization?

Oftentimes, CX practitioners will discuss the best reporting position for a core CX team to give an organization the best chance for Customer Experience (CX) success. Here at Pearl-Plaza, we’ve seen far too many instances of programs turning into (or frankly never becoming more than) measurement-only programs no matter where they live within an organization. 

After working with many of the world’s best brands for over two decades, we’ve seen CX teams report to the CMO, the COO, and directly to the president/CEO at various points—this conversation made us think about what impact the reporting relationship has on CX success. Is there one best place for CX to live, or can it be successful in multiple areas?

More importantly, it made us think that, in addition to where the function reports, there are other organizational factors that contribute to program success. The skills and characteristics of the person spearheading the CX efforts matter a great deal as well.

Is There An Optimal Organizational Position for Your CX Team?

Regardless of where your CX team lives, the team must remain unbiased and have the purview to work cross-functionally in order to drive collaboration and break down silos. Without that organizational freedom and neutrality, the team’s efforts are already handcuffed and chances of CX success are greatly diminished.

While many companies have added a seat at the table for a Chief Customer Officer (CCO) or Chief Experience Officer (CXO) in recent years, we still see most CX functions report to either marketing (the CMO) or operations (the COO). There are pros and cons to each of these reporting relationships:

The Pros and Cons of Your CX Team Reporting to Marketing & the CMO: 

Pros:

• Tied More Closely to the brand promise of the organization (since CX is the fulfillment of that promise)
• Tied more closely to the communication function. Too many CX functions don’t think about the role communication plays in the overall experience, but this is where the customer expectations get set
• Part of a more holistic view of the company and the customer journey
• Marketing (or strategy) is more likely to consider the experience of the future as opposed to only today’s experience

Cons:

• May be too far removed from the actual frontline customer interactions, so it can be more difficult to implement change
• Often too closely tied to marketing’s priorities and budget
• Can marketing enforce an effective closed-loop process if that work happens elsewhere in the organization?
• Marketing is often more focused on customer acquisition and top-of-funnel activities

The Pros and Cons of Your CX Team Reporting to Operations & the COO:

Pros:

• More closely tied to frontline customer interactions
• Typically has good success with enforcing a strong closed-loop process (if staffed and funded properly)
• Operations typically focused and measured on customer retention

Cons:

• Unless digital and call centers report to the COO, the program can get too focused on in-person or physical interactions
• Can be too focused on break/fix of today’s experience and not focused on overall CX strategy, process redesign, or experience design. Programs can get very tactical
• Susceptible to budget cuts and quarterly targets, whereas CX tends to be a medium-to-long term proposition

The Pros and Cons of Your CX Team Reporting to Executives Such as the CEO:

Pros:

• Easier alignment to executive goals and buy-in
• Budget is set aside specifically for one purpose and can have less constraints
• Easier to build relationships around CX with each department to break down silos

Cons:

• Difficult to get all departments aligned to taking action as they can be seen as an outsider
• More difficult to be in synch with the day-to-day business rhythm
• Focus often on medium- or long-term initiatives while peers focus on quarterly results

Customizing CX Team Organization: Considerations for Success

In terms of the reporting relationship of the CX function, one size doesn’t fit all. Every organization, leadership dynamic, employee culture, and business is different. We mentioned above that we have led CX reporting to the CMO, reporting to the COO, and as an independent function. What we learned is that it can be successful in any of these reporting relationships, though we suggest it has a head start if it reports into the predominant power core of the organization.

Some companies are operations-led, others are sales & marketing-led, while others are product-led. Tying CX to the true cultural and power core of the company, though it brings some of the bias mentioned above, aligns it better with the core of the company.

Regardless of where your CX function reports, there are key organizational elements that must be present and the CX leader also has to have certain key skills, strengths and characteristics for it to be successful.

Keep an eye out for two subsequent discussions in this series to learn more about what those elements and success drivers are. In the meantime, compare your current CX structure to the pros and cons laid out above to consider what your reporting structure’s strengths and weaknesses are. You may find that it’s time for a change; if so, don’t be afraid to enact it and thus drive greater Experience Improvement success!

The Pearl-Plaza Team