Know-How Exchange : Strategy

Keeping in mind that I've never held any senior-level position with a billion-dollar company, I find myself asking, "Why does the customer service department have to report to any one area such as sales, marketing, or logistics?" How powerful a statement would it make for customer service to report directly to the CEO?

I think I understand that customer service fills two needs: it's the face of the company that your customer sees, including problem resolution, etc., but it's also the giant "suggestion box" where you have the potential to learn many new ways to do a better job both internally and externally. As a result, I see customer service not only as a problem-solver, but also as a data aggregator and disseminator. If you buy into that, then clearly customer service is of as much value to sales and marketing as it is logistics.

So, what if the customer service group reported to the CEO, outside of either sales, marketing, or logistics? And instead, there were two equal senior-level positions within the customer service group, one that served as the liaison between customer service and sales and/or marketing, and the other serving as the liasion between customer service and logistics? I just think the information that these two positions is tasked with obtaining and disseminating is so very different that the job must be broken up into two.

I don't know why, but I find this to be a very interesting question (I mean, I'm not likely to work for a billion-dollar company any time soon!), and I'm really looking forward to what others have to say about it.

Paul

I worked for a Fortune 500, and we also had customer service bounce between logistics and sales. As you pointed out, there are benefits and downsides to both.

My feeling is that it should be with sales. This gives that all important customer focus. This will bring about potential complications with the logistics side, but I would rather that my company work those out internally (problems with customer service are immediately seen by customers, where logistics problems aren't always seen by customers).

Note - you should still make specific efforts to ensure that logistics is as good as possible is customer service doesn't report there. We had regular (weekly) meetings between key players of the two groups to work through current issues, and work on improving the systems. Also had in place a way to get immediate issues dealt with.

If I could wave my magic wand (and not have to deal with the political problems) I'd have Customer Service reporting to the VP-Sales & Marketing, as a third member of the triad (VP-Sales, VP-Marketing, and VP-Customer Service).

Customer Service is clearly a marketing function (with marketing in its broadest sense), even though it has strong roots in supply chain management. Having it in operations almost defeats the purpose of serving customers. Of course, everyone in the company should be serving customers -- internal or external.

Having it report to the CEO, in my opinion, hides the fact that Customer Service is ultimately about ... well, customer service. Customers are the province of Sales primarily, so aligning Customer Service with Sales and Marketing makes much more sense (to me).

This is an interesting problem, and ultimately the specific individuals in the company will probably be more critical to the success of the organization than will the reporting relationships. Logically, though, I think Customer Service belongs with Sales and Marketing, and making it a "co-equal" can help ensure that it integrates with the rest of the company better than if it reports to either one.

Just one person's opinion. Hope this helps. Most of my consulting business has been with companies in the Fortune 100, and they're always struggling with issues like this one. I don't know that I've ever seen it resolved definitively ... but somehow good, well-motivated people who care about the company's success seem to figure out a way to make everything work.