Oracle Customer Experience Strategy and CX Software
Anthony Lye Discusses CX Strategy and the Company's Unique Position with Oracle CX
In this podcast conversation with Anthony Lye, Oracle's SVP, Cloud Applications Strategy, we discuss the objectives and factors pushing Customer Experience (CX) to the top of the board and CEO agenda as well as the underlying technologies, performance metrics and business challenges to be considered when deploying customer experience management programs.
"Customers are in control of the relationships. I think switching costs are lower than they have ever been before. I think products are commoditizing at a faster rate. I think traditional marketing is just not working. There's more and more competition. It's a great time to be a customer."
Key take away points in the Customer Experience discussion with Oracle's Anthony Lye:
- Anthony describes Customer Experience (CX) as a transformational business strategy designed to create a sustainable differentiation beyond product. CX strategy requires a customer-centric approach and redefines Customer Lifetime Value (CLV) from just a sum of sales transactions by also appending social and behavioral values from the customer. This in turn often redefines the terms and values of 'customer' and 'relationship', particularly as compared to how these terms were defined in conjunction with the rise of "Customer Relationship Management" strategy and software solutions.
- Customer loyalty programs often act as components of CX strategies. Loyalty programs deliver stimulus and rewards for customer response and engagement as well as act as a scoring mechanism to show measurement success with customers. For example, many times customers interact anonymously with their suppliers through credit card or cash payments. Loyalty programs can entice customers to share their identification. With customer data, suppliers can then appeal to customers in more ways, in an effort to provide additional customer rewards for increased transactional spend, referrals and behaviors, and ultimately increased CLV.
- An American Express Global Customer Service Barometer survey showed that “Americans are placing an even greater premium on quality customer service,” with 7 in 10 Americans (70%) willing to spend an average of 13% more with companies they believe provide excellent customer service. This figure is up from the year prior where 6 in 10 (58%) said they would spend an average of 9% more for excellent service. The study reinforces that as products continue to commoditize at a faster rate, prices change at near real-time, and promotions and offers become even more abundant, customers will increase their business patronage and spend for differentiated services. Service is the primary connection created during the customer lifecycle, and service will continue to have an increased influence in successful company and customer relationships.
- The business need for CX is clear. Customers are now in control of their vendor relationships. Competition has grown, the cost of switching suppliers has fallen, products are commoditizing at a faster pace and traditional marketing is saturated and less effective. Choosing to adopt a Customer Experience strategy is a necessary decision. Companies which deliver great customer experiences will grow, and companies which deliver poor customer experience will incur customer churn and lost business.
- The rise of social media and social CRM is a big catalyst in driving the need for CX. Customers trust vendors less. Customers trust each other more. Conversations which previously occurred over the garden fence at a local level now occur on a global scale. With the speed and reach of social networks, good news travels fast and bad news travels even faster. Customers' user generated content is significantly influencing other customers purchase decisions and driving commerce.
- Oracle CX is the company's offering to apply underlying technology in order to facilitate CX business strategy. The CX software suite has originated from 3.5 years of organic development and a series of targeted acquisitions. The Oracle CX suite includes Oracle CRM products, MDM (master data management) solutions and experience applications—including the acquired products ATG (selling experiences), Endeca (search based experiences), InQuira (support based experiences), RightNow (service based experiences) and FatWire (marketing experiences). The Oracle CX framework supports platform, BI and social services, including the Oracle Social Network, social marketing services from the recent Vitrue acquisition, social intelligence services via the Collective Intellect acquisition and new social data services.
- Oracle CRM products, including Siebel and Fusion CRM, will closely tie with MDM (master data management) applications and play an anchor role to the Oracle CX suite. CRM software will continue to play a transaction processing role and will continue to drive workflow for the internal users in marketing, sales and service, but may or may not be the system of record for 'customers' as increasing definitions of the customer reside elsewhere—highlighting the need for MDM. The sales and marketing processes which CRM systems facilitate are widely understood, thereby actually commoditizing now mature CRM. To achieve competitive advantage, companies must find new differentiation in better knowing their customers and delivering consistently great experiences to both customers and employees.
- Oracle believes that it's CX software helps customers deliver better customer experiences create a unique competitive differentiation in a crowded CRM software marketplace. The combination of organic development and acquisition of several best in class experience applications has put Oracle in a near green field opportunity as compared to traditional competitors who talk of CX, but have yet to deliver purpose built application suites to empower CX business strategies. The company also empowers customers to pursue a CX technology path along an iterative or staged approach, by offering experience applications in a modular like fashion while similarly offering the broader suite for continued evolution.
- A primary obstacle when deploying a CX strategy is an organizational challenge, effectively bringing together what are often independent departmental and channel delivery owners. For example, a VP of Ecommerce may be competing with the VP of Retail. Executive sponsorship is needed to align company and business unit objectives while creating an effective cross channel flow. Many times this alignment and continued management is best delivered by a Chief Customer Office (CCO)—who orchestrates processes from the customers' outside-in perspective, not the company's inside-out view, and who organizes multiple company channels as compliments to each other and not internal competitors.