Customer Engagement Models: Oracle
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.