Which one of these risks doesn't belong with the others?
A) Regulatory risk
B) Supply chain risk
C) Privacy and information security risk
D) Commodity price risk
E) Geopolitical risk
F) Customer loyalty risk
If you guessed “F,” you get an “A.” You also might be surprised â€“ as I was â€“ to learn that one of the world's leading authorities on risk identifies customer loyalty as the very top business challenges that will influence the board of directors' agenda in 2012.
Risk consulting firm Protiviti just identified the top business challenges and audit committee items for 2012; interestingly, the list is based on experience with and insights from a broad range of global organizations and their boards.
Here are the top 5 challenges for non-financial services companies, according to Protiviti:
1. Achieving customer loyalty
2. Managing supply chain risks and rising commodity costs
3. Managing increasingly complex privacy and information security issues
4. Managing regulatory change
5. Attracting, retaining and developing top talent
(Customer loyalty also figures in the top 10list of financial services companies, but much lower at #9.)
I'm happy to see talent-management made the cut. And, after scanning through the ever-growing pile of thought leadership on my desk, I'm less surprised than I was initially was to see customer loyalty as a top management and board priority.
After all, a wide range of the world's leading global CEOs last year indicated that they consider “getting closer to customers” as one of three prerequisites for business success in the 21st Century.
And IBM has seen fit to produce a comprehensive global chief marketing officer (CMO) survey â€“ perhaps, in part because it appears that the CMO job security is increasing, even during volatile economic times.
The 2011 IBM global CMO survey identifies the following priorities as the most important determinants of organizational marketing success in the coming year:
1) Delivering value to empowered customers;
2) Fostering lasting, meaningful connections with customers; and
3) Capturing value by measuring the results of marketing initiatives.
These priorities suggest that CMOs are in step with CEOs' urge to get closer to customers. The question is whether chief risk officers and CFOs are also in step with the rising importance of customer loyalty.