Oracle stresses importance of contextual CRM

Oracle hopes to offer its internal social CRM product to customers

Oracle has been discussing how the company intends to further develop its customer relationship management (CRM) products based on its own experience of what it terms "contextual social CRM".

The firm announced several additions to its Social CRM portfolio at the Oracle OpenWorld 2009 conference yesterday.

Anthony Lye, Oracle's head of CRM, explained during his speech that the firm's concept of CRM is based on the hypothesis that relationships with customers are changing.

"CRM systems in their early designs were transactional, and built to serve a company's relationship with the customer, who was at this time either a company or a household," he said.

"Now customers want to talk to other customers and, because most CRM systems do not facilitate that, they go to other places to talk to each other."

This change makes it vital for companies to extend their CRM systems to listen to the conversations taking place outside their visibility, and to take the appropriate action.

While Lye acknowledged that many companies already monitor social networks and communities, he maintained that their methods of doing so are often " primitive".

Lye suggested that businesses should start by ensuring that their CRM systems listen to the "hierarchies in relationships".

"This includes the explicit relationships, like the 'I know you, or you know me' type, as well as implicit relationships, which are basically derived by sophisticated analytics and clustering," he said.

Expanding on the implicit relationships companies might look for, Lye pointed to Amazon, which he said employs an "implicit relationship structure. It tells customers that people who bought this also bought that."

Implicit relationships are important to understand, according to Lye, because people in social communities tend to listen to each other if they believe themselves to be similar.

After understanding social relationships, Lye suggested that organisations should understand their context and determine the relevancy of the comments to their reputation.

"Businesses search social sites or their communities for mentions of their brand name, and can panic when it comes back with all this feedback. But what they need to realise is that a lot of the feedback may not be relevant," he said.

"What you have to do is determine relevancy and influence. Who is actually listening to the comments? If someone says something today and no-one comments on it tomorrow, it becomes irrelevant.

"A good way to find out the context is to capture the conversations occurring in online communities, stimulate them and then mine and track them over time. It's all about analytics."

Lye explained that Oracle has been working on a "proof of concept" for contextual social CRM suggested by a piece of art the firm acquired called The Listening Post. The concept involves seeing the world chat to each other through social networks.

"After we tried it during a demonstration I wanted one, and [Oracle chief executive Larry] Ellison wanted one, and so we built one," Lye said.

"But instead of monitoring everything like the art version we saw, we tuned ours like a radio and it monitors everything that is said about Oracle, capturing conversations through channels such as RSS, email, SMS, voice-to-text and service requests.

"All the conversations are then piped into what is now our Listening Post, and then we normalise the signal."

Lye explained that to 'normalise' the signal of the conversations Oracle uses a service supplied by Reuters which extracts information from the system and tags the names.

"We then use Oracle data mining technology to find out whether the comments are part of a conversation or a question, and whether they are positive or negative," he said.

"Then we look at whether the signal is amplifying or decaying, and figure out the longitude or latitude of the signal, for example the phone number or the IP address. We then use Google Maps to mark where the conversations are happening. "

Lye claimed that the outcome of the contextual strategy is that Oracle can ignore 90 per cent of the conversations it picks up in social communities.

"Only around 10 per cent of the comments get listened to and picked up by our marketing teams," he said. "The marketing department may then issue a press release and we monitor what happens to the signal."

Lye hinted that the Listening Post might soon be a product Oracle will offer its customers.

"This engine was built as a proof-of-concept and is running at Oracle, and now we hope we can productise it. Everyone that sees it wants to buy it. We have plenty of customers that monitor social media but, without the taxonomy, they have nothing," he said.

"If a person at the bottom says something and the vice president of a company says something as well, we need to know who to monitor. I appreciate that we live in a democracy, but businesses are not governed like that. Businesses are often autocratic. You can't really do without context."