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Customer Engagement Models: Oracle

Tuesday, January 28, 2014

Oracle has hundreds of thousands of customers and dozens of customer programs. It measures customer engagement of its biggest accounts on an account-by-account basis. The company focuses on those top accounts that, combined, contribute the clear majority of Oracle’s annual revenue. The company has identified the eight customer programs that have the highest correlation to satisfaction, loyalty, referenceability, and revenue. The measure of engagement then is the number of these programs in which a top customer participates.

Overall engagement is measured along a continuum that begins with the transactional buyer (least engaged), increases through the buyer who is engaged in customer programs, further increases through the buyer who is partnering with the company on product roadmaps and strategies, and culminates in the buyer who is an advocate for the company (most engaged). Participation in only a couple of key programs places a customer at the transactional end of the continuum; participation in most of them places a customer at the advocate end. The company continuously measures revenue across key customers because it believes that it is easier to gain incremental revenue from existing customers than to acquire new customers and it has determined that there is a cause and effect relationship between engagement and incremental revenue. In fact, Oracle’s most-engaged are generating approximately three times the revenue of transactional buyers.

Oracle is actively partnering with their customers to improve the business. More than 7,000 of Oracle’s customers are involved in some sort of an advisory board. Some of them are executive level advisory boards, and some are product-oriented, defining product features and functionalities. Participants are expected to meet minimum meeting participation requirements. Should people be unable to participate, Oracle will allow the customer to retire from that board to make room for a more active participant.

At the advocacy end of Oracle’s engagement continuum, more than 600 Oracle customers were involved in a significant speaking engagement on the company’s behalf during fiscal year 2013. Those 600 are of the over 15,000 customers who are actively involved in referencing for Oracle under an agreed-on, individualized customer reference plan. Engagements range from Oracle’s own OpenWorld conference to participating in an advertising or product launch campaign or leading a best practices discussion with other customers and prospects. A significant segment of those speakers are senior level executives--influential people from influential brands.

Oracle also examines what content is created when determining how engaged its advocacy-level customers are. Content can come in many forms, including written and video content. During fiscal year 2013, in total Oracle produced almost 5,000 pieces of content with its engaged customers, including testimonials, case studies, fact sheets, videos, and advertisements. Furthermore, Oracle measures two facets of advocacy in its engaged customers. The first applies to customers that are even willing to engage in advocacy activities, whether or not they actually do so. The second applies to customers that are not only willing, but also actively involved in advocacy efforts such as developing content or speaking.

In summary, Oracle’s efforts are focused on engaging as much as possible those customers who are among the top contributors to annual revenue and who are already demonstrating a willingness to engage in customer programs. The company further targets customers on the basis of how much of what they spend is potentially attainable by Oracle. Finally, Oracle also looks at systematically increasing engagement with customers who represent the strongest brands in the world. Underpinning all of Oracle’s customer engagement efforts is the conviction that increasing the percentage of the customer’s spend with Oracle is more profitable than acquiring new customers.

*This post is excerpted from The Bingham Advisory: The Customer Engagement Trajectory, available for free download from the CCO Council website here.


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Categories: Chief Customer Officer | Customer Centricity | Customer Insight | Customer Loyalty | Customer Retention | Customer Survey | Customer Engagement

Using Data to Prove Your Value

Tuesday, September 24, 2013

It’s a challenge for the CCO, as well as any loyalty executive, to prove value and get it right in the first two years, much less the first. Even though 67% of companies with CCOs outperformed their industry and markets in 2010, it is the most fragile member of the C-Suite, with an average tenure of 31 months based on research conducted by the CCO Council. In my interviews with successful CCOs, one central thread running through our conversations has been the importance of using data to prove the CCO’s value in those first two years. Even a seasoned executive can become overwhelmed or distracted by the job of managing and making data relevant, so here are three best practices to help ensure your data effectively improves your perceived value.

Let the Data Speak – Not Swallow You Up
Collecting and building data is a first essential step in connecting you to improved fiscal results. But rather than making data a central focus of your job, it should be used to inform you of the critical areas where your energy can be focused for greatest impact. Analyzing data should not become the big black hole you lose yourself in. Padded with a little appreciative inquiry, quality data will paint a clear picture for where you can improve delivery of value to the customer. 

Connect to the Customer Using Data
In some companies, the CCO has no direct ownership over processes that touch the customer, making it incredibly important for the CCO to connect her role to customer satisfaction. She does that by constantly measuring and monitoring customer feedback, customer loyalty, and customer satisfaction. Connecting to the customer allows you to figure out what drives customer satisfaction and repeat revenue. It gives you critical traction to deliver your point of view to an executive team. It helps you frame compelling messages to deliver to your teams and customers, and provides the needed borrowed authority to boost the perception of your value.

Own the Customer’s Voice and Make it Visible With Data
Successful CCOs are spending a lot of time communicating stories internally and externally; stories of revenue impact, turnarounds, customer loyalty improvements, etc. At the end of the day nothing speaks more loudly than a great track record and excellent execution—so use your borrowed authority as the voice of the customer to create a buzz around customer or organizational successes, and to plot the road map for continuing relationships. Data may change or disappear, but people will remember stories, and ultimately, the stories you collect persuade others to action.

Question to consider: how adept are you at translating/framing customer data for your executive team?

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Categories: Chief Customer Officer | Customer Insight | Customer Loyalty | Customer Survey

Customer Insight Is Too Good To Waste

Wednesday, February 03, 2010

I was reading a blog today about a company’s efforts to gather customer insight using a well-known research institution and it occurred to me that while gathering customer satisfaction scores is a good thing to do, many companies that I’ve worked with start their customer insight collection with massive surveys and end up wasting opportunities for strategic input to their overall customer strategy. In my experience at companies large and small as well as in interviews with scores of Chief Customer Officers (CCOs) for my upcoming book entitled, The Key to Customer Strategy:  The Rise of the Chief Customer Officer, I’ve found that there must needs be a sequence of customer insight collection methods from coarse to granular, and expensive to economical.  This approach may at first seem counterintuitive, but actually yields the most valuable results that drive profitable customer loyalty.

If you simply begin with satisfaction surveys as your primary view of the customer, you may well capture “dissatisfiers” or those things that are currently damaging customer relationships and must be fixed immediately. However, you miss the most valuable information, namely the real reason why your customers buy, what they value the most, whether they may be willing to pay more, and even more importantly, where your customers are going next and how you can lead them there.

To achieve this type of insight and more fully inform their customer strategy, the best companies have a hierarchy of customer insight collection methods:

1. Executive advisory council to understand strategic imperatives:  This mechanism gets senior-most executives (the economic buyers) from critical customers together to understand their highest-level business challenges and directions.  This input is critical in determining future directions your company must begin to consider because if your customers are heading in a direction that you aren’t, you’ll be left behind.

2. More tactical customer advisory boards:  Companies may have customer advisory boards for each major product line or customer segment they are in.  They are primarily comprised of product/service users and influencers.  Broadly speaking, these groups provide a wonderful focus group in which customers can speak their mind, share their issues and problems and get help from their colleagues and the company, as well as  react to forthcoming products/services and activities.

3. Direct interviews of key customers:  Direct interviews are incredibly important to truly understand customer value drivers:  ie. the critical reasons why your customers buy from you (see this blog post and this article published in CEO Refresher for more information on value drivers). Direct interviews are critical to uncover all the hidden issues, learn the context of problems, and even more importantly, discover new opportunities only exposed through direct, contextual interviews.  These direct interviews will refine questions and inform the large-scale customer surveys.

4. Large-scale customer surveys:  The surveys, by their very nature, need to be confirmatory–they need to validate the insights you’ve gained to date and confirm or otherwise assess the scope of the issues you are seeking insight into.   It is extremely hard to get strategic insight if you simply start with surveys unless you follow up with interviews, which simply indicates the need to have started with interviews beforehand.

5. Focused working interviews:  The large-scale surveys will invariable confirm issues that need to be addressed, and you’ll need to gather your cross-functional teams together to get to the root cause of the issue confirmed through the previous steps, propose solutions, and upon implementation, evaluate their success.

It may be tempting to simply send out a survey and call it good.  In my experience, surveys  can can be subject to many pitfalls that I’ve previously written about on my Customer Strategy Blog.  Squash this temptation.  Just like you don’t allow your sales people to go into a customer visit without preparing, you can’t allow your company to just send out a survey without fully informing the survey.

You only have so many silver bullets in your gun when it comes to your customers.  Do your homework first and make sure that when you spend your silver bullet and ask your customers to help you out, that you get only the insight you really need to drive your business forward.

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Categories: Customer Insight | Customer Survey