Oracle Open World Take 1
Thorsten Veblen got it wrong.
The early 20th century University of Chicago social scientist (it was before they called his breed economists, I think) wrote in The Theory of the Leisure Class that there are two things you should do if you want to show the world how well off you are without uttering a word and thus sounding crass.
First, ensure that your wife doesn’t work outside of the home for money — volunteering and charity work are good because they expose wives to the community so that all can marvel at her free time and your earning ability. The second is to own a dog, for much the same reason — dogs take time to groom and exercise and they are thus trophies just like your non-working wife.
Good luck with that today.
There wasn’t much that Veblen got wrong. He was brilliant and more than a bit sardonic and he had a penchant for other professors’ wives. So great was his reputation that no scandal ever prevented him from getting hired but it did make for some interesting job interviews. In one, a question came up and his reply as it comes down to us was, “Gentlemen, I have seen your wives and you have nothing to worry about.”
He was right, I have seen pictures.
But Veblen was wrong about demonstrating your status or at least he would be today. In the early 21st century, the best way to demonstrate to the world how well off you are is to take over San Francisco for a week and invite your customers which is what Oracle has done again for Oracle Open World (OOW).
Somewhere north of forty thousand attendees are pouring in to the city in anticipation of tomorrow’s opening (though there is a welcome event this evening). As early as last Monday you could tell the rest of the world was paying attention to Oracle. The company’s stock began moving up early in the week in advance of Open World and in expectation of good earnings news, which was delivered last Friday.
No doubt good Oracle news is set to pour out of the Moscone Center this week with the company able to report on its first year of Oracle Fusion software and it’s first efforts with Sun Microsystems as a member of the fold. Closer to home, there will be more than 200 breakout sessions for CRM. A raft of CRM brainpower led by the inestimable Paul Greenberg and a cast of tens (quite a lot actually, though I haven’t seen everybody yet) has assembled to blog and tweet and Facebook the proceedings.
Like them, I am here to absorb as much as I can and to ask probing questions the answers to which I will relay back to you through this blog and assorted other venues in the CRM universe.
For fun and games Oracle has taken over Treasure Island one evening and invited a stellar cast of entertainers including The Black Eyed Peas, Steve Miller, Berlin and Don Henley. They’ve closed off a street and covered it with a tent where they intend to feed us lunch and the rest of the eateries around here eagerly anticipate our tourist dollars. There’s not much else they could do to make old Thorsten proud.
We’re ready, locked and loaded.
Ten-four good buddies.
Book ‘em Dano.
Over and out.
The Howard Moskowitz Factor
In a Ted Talk from 2004 that I watched a the other day, Malcolm Gladwell spoke about Howard Moskowitz. You might recall the New Yorker writer made a name for himself with the publication of The Tipping Point and several other works that focus on the unpredictable things that people do in the course of normal lives. Gladwell’s Ted Talk gave me an insight about CRM.
Howard Moskowitz is a Harvard educated psychophysicist — whatever that is — who has made his bones in market research. Moskowitz works in the food industry of all things and his great insight was that very often there is no single, perfect version of a product just as there is no single monolithic customer. There are several product types that are attuned to the needs of clusters of customers.
Moskowitz’s contribution was in discovering that there is not a single big bell curve of a market for most things but he also showed that the market is not infinite or even made up of innumerable markets of one. He showed that there is a multiple but finite number of clusters, of horizontal customer segments, in anything. His breakthrough was to show that there are sizeable markets for multiple kinds of spaghetti sauce and that sauce is not a monolithic idea.
To be a little technical, this means that one’s Platonic conception of sauce, in this case, might match many other people’s notions of what sauce should be but, if given a choice, many might discover that they like something different. In the case of spaghetti sauce Moskowitz’s research replaced a single kind of sauce with six types ranging from traditional to garlicky to chunky to spicy and more — just check your store shelves.
By evolving from a one-size fits all approach to one that embraces customer diversity Moskowitz was able to improve customer experiences with food products from coffee, to cola, to spaghetti sauce and beyond. Embracing diversity goes by the name of horizontal segmentation and it applies equally well to food products as it does to other customer experiences. For what is a food product but a customer experience in material form? Horizontal segmentation seeks to understand what customers want and then to deliver it.
In our own design of customer experiences we often ignore horizontal segmentation and simply try to deliver an experience that most people will find acceptable, which is to say our Platonic conception of the experience. In fact, smart companies are designing customer experiences leaving nothing to chance. But what’s acceptable to the big Bell curve is very different from wowing the customer.
In customer service, for instance, we’re at least on the right track because service suites offer a range of communication modes today. With these modes a customer can at least select the setting of an interaction. But what about the content of the interaction?
This issue highlights the importance of social media tools that capture customer input and render it in the moment. They can do what Moskowitz did for a fraction of the cost and time. If a vendor or service provider can be in the moment with the customer, a vendor is more likely to be able to respond to a need as it happens. This amounts to horizontal segmentation on the fly or just in time horizontal segmentation.
If you link together enough such interactions you can deliver a differentiated customer experience in the same way that you deliver a movie by rendering a lot of still frames in rapid succession. But note that the key is in the ability to rapidly respond, it has less to do with the medium you use and it’s about as far away from the metrics we love to track like time in queue or ensuring we use the customer’s name or anything else that is temporal but off the mark.
Horizontal segmentation on the fly solves part of a problem. It helps us get through a customer experience at hand but it doesn’t give much insight into better alternatives. If Moskowitz had stopped at the sauce at hand, today we’d have a very good conception of traditional spaghetti sauce but we’d be unaware that deep in the marketplace there were opportunities for more chunky or garlicky concoctions. The sauce companies made a lot of additional money catering to new tastes but only once they had done the research and began to offer multiple alternatives.
So while being in the moment is important it’s not enough. It’s still critical to use social tools to ask the marketplace open-ended questions in order to capture unique insights. You don’t know where these insights will lead but it’s a sure bet that they are literally the secret sauce for differentiated products and customer experiences in an era when commoditization is turning our perspective into shades of grey.
Oracle Open World Preview
Oracle Open World opens up on Sunday with a keynote at the Moscone Center in San Francisco. The annual convention will attract about forty thousand people to the Bay area and promises to be exciting and interesting on multiple levels.
This will be the first Open World post Oracle’s acquisition of computer pioneer Sun Microsystems. Last year Oracle introduced a version of its Exadata storage unit based on Sun architecture (and presumptive deal close) and with the company finally in the fold you can bet there will be more product announcements that mix hardware and system software.
I don’t know if there will be net new announcements, but Sun was the driver of the Java revolution and reduced instruction set computing among other things, so I think it’s way safe to say there will be interesting things coming out of that camp.
This is also the first year post limited release of Oracle’s Fusion architecture. Fusion, you may recall, is a platform intended to unify the many disparate applications that Oracle bought up a few years ago. It is also the platform for merging and rebuilding applications along a more or less consistent Oracle product direction. With another year of development and roll out of Fusion, there will be much more to discuss and announce next week.
There’s also cloud computing to consider. A little over a year ago Larry Ellison was caught on tape at the Churchill Club pooh-poohing cloud computing but that was before Oracle really had a dog, a pack actually, in the hunt. Now that Oracle is better positioned, and given that Oracle’s database and servers support so much of cloud computing, look for Oracle to claim credit for the sunrise — to paraphrase an old Bill Clinton line.
Then, too, you can expect the usual shenanigans from a whole host of characters and partners. Everyone in this business today is into coopetition so look for fun announcements from Dell, HP (we want our secrets back) and Salesforce.com for starters.
Speaking of Salesforce, back by popular demand (or whatever) Marc Benioff will again address a crowd at the Yerba Buena Theater just down the street from the conference. Last year’s inaugural talk was expected to be some kind of challenge to Oracle but turned out to be a very successful symbiotic and statesman-like address. Too bad too because we all waited outside in the rain for the doors to open expecting something more combustible. This year, I hope it’s a sunny day.
On the CRM front, Anthony Lye and company have been working hard all year (Sounds like Christmas and the North Pole, doesn’t it?) to advance the front office suite on multiple fronts. The CRM team has scheduled two hundred sessions for the conference just on CRM. Forget the database, Java and Sun, if you’re into CRM the conference will have you drinking from a fire hose.
Trying to register for sessions is a Byzantine process though, which uses an on-line system that looks like it was built by monkeys on crack. To keep my sanity I have decided not to register for anything but to simply show up. I have a hard copy schedule. I know this strategy might exclude me from a few popular sessions but I figure that’s what beers are for.
The real star of the show, for me, will be the city of San Francisco. It’s not a perfect place for sure, but there is a wonderful energy in the city any time and it’s triply true during Open World and Dreamforce. You walk around high on the possibilities uncovered in the sessions and accented by the environment — the hills, the cable cars, the fog, the restaurants and most importantly the indefatigably optimistic crowd of natives and visitors. Did I mention the California wines?
I digress. One week till Open World. I don’t know what will be announced because I won’t get briefed till later and then I’ll be in quarantine. So, I don’t know any more than you. But I can’t wait.
Back to the survey
Back in August I wrote about some research I had gotten into mostly for fun. You might recall it. I searched on a company name and the word “sucks” and reported what I found. The point of the research was not to be salacious or to offend anyone. In political circles, it’s known as discovering one’s “negatives,” here’s how it works.
Suppose you wanted to find a politician’s approval rating. We do it all the time, it’s part of polling to see, for example, how well the public appreciates what a person in political life is doing. The question used to gather this data can be as simple as, “Do you think so-and-so is doing a good job?” You usually get back three categories of answers — yes, no and no opinion. Each category is important. Obviously, if you are running for office, you’d like to see your yes votes or positives exceed your opponent and, in a perfect world, also exceed fifty percent.
Just as important though are the negatives or no votes. Because it’s harder to change a person’s mind than it is to convince that person in the first place, low negatives and higher undecideds is what you aim for simply because you want to be convincing people of your approach rather than trying to get them to forget some gaff.
So, what my little survey did was simply try to measure the negatives. Companies do this all the time with satisfaction surveys but a satisfaction survey is far from perfect for lots of reasons. Measuring “customer sat” frequently means narrowing down the survey area to a specific instance — were you happy with the service you got today? Yes? Great! Alert the media!
As you can see this approach can ignore any larger concern a customer might have. For instance, I hate most airlines but I have to fly. I’m tall and my body doesn’t fold neatly into a cramped seat. Airlines know this and often they don’t even try to find out how I really feel. I took a satisfaction survey recently and the vendor only wanted to know three things. I have forgotten two of the three metrics they measured but the third had to do with being on time. Maybe the other two had to do with unscheduled mid-air stops, I forget, but they set the bar pretty low for themselves.
So, a sat survey is not the place to find out what your customers really think, it’s a band-aid at best. That’s why the sucks survey is so useful, it provides an un-varnished look at what people really think. And since this method only measures the people who were upset enough to write something or to create a blog dedicated to trashing the vendor, I have to say it’s a good hard core measure.
Ok, now for today. There was something left unwritten in my series on what sucks. Going back to the political analogy, companies with low negatives have an inherent advantage over their competitors who might have higher negatives. Low negatives represent good will, something you can count on when you can’t count on more tangible things. Will your customers be with you if you stumble or will they be willing to work with you on a new product in a long beta program? The good will you store up is like money in the bank.
Interestingly, the company that had the lowest negatives of all those I looked at was Salesforce.com. They weren’t perfect for sure, they had ninety two thousand hits on the search but in comparison to British Petroleum at 2.5 million or Dartmouth College at over one million or even Starbucks that had over three hundred thousand negatives, Salesforce looks good.
To be sure Salesforce has stumbled a few times, for instance when the service degraded and everyone thought it was the end of the world. But in that situation Salesforce simply became very transparent and launched a series of community outreach initiatives to keep customers informed about its performance. This is not to say that other vendors don’t do similar things, it’s just that Salesforce gets very good results for these efforts.
Case in point, for about the last year Salesforce has been developing and deploying a new product called Chatter for coordinating how large groups work using crowd wisdom. The beta program was by most standards very successful with more than 500 companies participating in the final stages. That’s a huge number for a beta and more companies could have been accommodated but you have to draw the line somewhere.
My point is that at least indirectly, Salesforce’s low negatives contributed to giving its customers the confidence to work with the company in the development and beta process. Of course, low negatives are the result of many things including customers realizing that they are receiving good value for their investments. Taken together this is an example of what happens when you deliver transparency and value and in this economic environment especially, it can be very important.
