“We no longer know why customers choose a product”
CRM systems do not know any social structures and certainly not the reasons that lead to a purchase decision from the customer’s point of view. “This is a very threatening development,” warns Anthony Lye, Senior Vice President CRM at Oracle, in an interview with absatzwirtschaft-online.
Mr. Ley, with Web 2.0 we suddenly have customers who interact online in social structures. What does that mean for professional customer relationship management?
ANTHONY LYE: Something fundamental is actually happening here. CRM systems have traditionally been set up to organize data. We were able to search in structures and wonderfully show who Joe Smith is, who he works for, and all of that beautifully packaged in hierarchies. CRM has no idea what a social structure is. We do not know who influences our customers, employees or partners and who they influence. If we don’t find out, we’re in danger of losing her to someone else.
Did we always know that before? How big is the danger really?
LYE: Consider buying a camera. I used to go to a store in my town and get advice from the salesperson. With the advent of the Internet, I went to camera manufacturer websites for information. Since last season I don’t have to do that myself. I go online and make my purchasing decisions based on the experience of other like-minded people. The supplier no longer knows the reasons for my purchase decision, and that is a very threatening development.
As a provider of CRM solutions, how can you deal with these processes?
LYE: The innovation push comes from the marginal spheres of the companies. I say edge sphere because customers, partners and employees drive this development. That means: The edge puts us under pressure and determines our actions. We are already seeing more mature and powerful Internet technology on the consumer side than on the corporate side.
What advice would you give to companies investing in CRM today?
LYE: The first is to be customer-centric. Until now, everything has been product-centric. You don’t have a good experience with your bank because your advisors direct you to the many product databases. But our processes should start with the customer and end with the customer. This not only serves the customer, the CEO also wants to know how the processes are going, who is involved in them and how long they take. It’s no longer about the representation as a means of control, but about observing processes, that’s a fundamental change.
Are there other important developments companies should keep an eye on?
LYE: Master data management is a hugely important factor. Most companies have really bad data. You should get them under control and supplement them with information from the outside. Self-service is an important field. Customers always prefer to help themselves rather than pick up the phone. So this is about the question of how we create value through the self-help of the customer. And of course the customer loyalty programs. Loyalty programs are becoming a significant part of the business process of all companies. 50 percent of all participants actively sell products for the company, a third passively. If you’re a retailer and don’t have a loyalty program yet, you should change that quickly.
There’s an area of their development work they call “Social Maps,” which is about connecting to popular social networking sites. How far have you progressed?
LYE: We have a tool kit in our application that makes it possible to call up the social maps for contacts. So you know who that person knows and who is contacting that person. What’s interesting: we even have a little gadget that allows our customers to ask our system who has a profile similar to themselves. We make it possible to connect them to that person. Imagine you are buying a car and you express a desire to speak to someone similar to you, similar demographic profile, related industry. Wouldn’t it be a great service to talk to this customer about their product experience?
Many CRM systems were installed before there was any talk of social networks. How do you bring this new dimension together with traditional systems?
LYE: The first thing we do is make sure that the CRM system has a structure to hold this data. In the area of CRM on Demand we are already doing this today, we are already further ahead with our products. But we plan to integrate this into the Siebel product as well. As soon as we take Joe Smith as a booking we make contact with the social network sites and ask: Does anyone have Joe Smith? If a site says yes, we check to see if that’s our Joe Smith too. Once that’s settled, we tell the system: okay, download Joe’s profile. Once the connection is established, the following happens: Joe is promoted – the information flows into the system. Joe moves into a new house – the information flows into the system. We can benefit from this in the next campaign. Irmtrud Munkelt conducted the interview