The center, founded in September 2000, is a good investment for Teradata, according to Heffring. "This helps us think outside the box and be more creative in analyzing where CRM is going," he says. "It helps us solve immediate customer problems or issues that we need to research and to identify topics and trends. It becomes a great selling proposition for us (and) helps dispel the notion that CRM is a short-term task."

In the know

Survival in today's increasingly competitive business environment depends on using the best customer relationship practices and making the most of available technology. One way to keep abreast of current thinking is to enroll in a course on customer relationship management at the Fuqua School of Business. The two-day course, led by the Teradata Center for Customer Relationship Management, teaches the basics of CRM and explains how it can revolutionize the way companies do business. Bob Burroughs, director of base marketing for Cingular Wireless, attended the first class, held in November 2001. He wanted to learn more about CRM and its implications. "(Cingular is) just a year old, and we're really customer focused," Burroughs says. "We want to decide how the principles of CRM will allow us to get there sooner rather than later." Burroughs thinks the Executive Education CRM course prepares students to overcome the challenges they and their companies will be facing in the months and years ahead. "I really wanted to understand a little more about how one approaches moving from product-centric to customer-centric organizations, and how you execute against that," he says. "I have a better appreciation for the challenges of moving a whole organization. … The total opportunity will never be met if you try to do this a department at a time." Burroughs sees Teradata's solution as an enabler of Cingular's CRM objectives. "The whole concept of CRM is around understanding and meeting customer needs at the time those needs are resident. It's only through good utilization of that information that you can actually achieve a core competence when it comes to CRM." George Allen, national account manager for Teradata and Cingular's Teradata contact, also attended the Executive Education CRM course. For him, it was an opportunity to gain a better understanding of his customer's needs. "(The class) certainly broadened my perspective," he says. "We, of course, are very focused on the particular approach that we take to CRM through our products. This allows us to step back and take a broader view of what the issues are that (our customers) are dealing with so that we can better understand ways to help them."

But it's much more than a selling point for one company. The center and its accomplishments will impact CRM practitioners, their businesses and their customers, now and in the future. Josh Rose, center manager, explains this trickle-down effect. "The benefits that Teradata will receive through the research, ideas and thought leadership developed at the center will ultimately be transferred to their clients," he says. "That's a very big benefit because most companies don't have the resources, the opportunity or the capabilities to maintain their own academic thought leadership."

Mission: critical
CRM is more than a few marketing campaigns; it's really about changing entire businesses and how they bring products to market. "Probably the biggest impediment to CRM is the fundamental shortchanging of the scope of what we're dealing with here." Rogers says. "In other words, any company that assigns the CRM thing exclusively to the marketing department is going to be in big trouble and may waste a lot of money before they get a payoff."

Rogers notes that achieving a positive return on investment depends on the com-pany acknowledging it has to address a possible transformation or evolution of everything, from strategic decision-making and measurement, to company organization, to the way employees are compensated. Every person within the company, from the executive suite to the mailroom, has to buy in to the long-term goals of customer-centric marketing.

Heffring agrees. "People get too focused on 'how do I make ROI from this campaign for my company?'" he says. "But does it really affect loyalty for the customer? If you've actually decreased the loyalty and all you've gotten is good ROI, you're going to hurt yourself in the long run."

Moving away from this type of thinking is easier said than done. To a company that is well-established and successful in terms of dollars and cents, changing a proven marketing formula might seem like corporate suicide. In fact, deciding against change could prove to be the proverbial "straw that broke the camel's back."

Without the support of the entire organization, experts say, any CRM implementation is almost certain to fail. From the center's perspective, the only way to alleviate this problem is through education.

"There are not a lot of CRM people out there who have an idea of how it really works," notes Heffring. Through research projects, case studies, seminars and educational materials, he hopes to change that.

Road map to the future
"The overarching goal of the center is to legitimize the field of CRM in the academic and corporate worlds," says Staelin. "This is a new field and, as such, we need to encourage new research and the develop-ment of course material." The center is concentrating on building a body of knowledge that can be distributed in various ways, including classes at the Fuqua School's Executive Education program.

The open-enrollment program gives executives the opportunity to further their education in marketing and business topics on weekends or in short, intensive workshops and courses. In November 2001, the Teradata Center for Customer Relationship Management joined the program with its first two-day CRM course (see the In the know sidebar for more).

Rogers and Julie Edell, associate professor of marketing at Fuqua, lead the twice-annual course. They teach core CRM concepts, analysis and data mining techniques, and other CRM issues through lectures and case studies. Peter Heffring also teaches the benefits of using CRM software tools to manage customer data.

Roll call The Teradata Center for Customer Relationship Management at Duke is a think tank of leading CRM scholars, analysts and experts. Here are the leaders who will drive CRM research and create a network of scholars in the coming years. Executive Leadership Team Rick Staelin Edward and Rose Donnell Professor of Business Administration, Fuqua School of Business Martha Rogers Cofounder and Partner of the Peppers and Rogers Group Adjunct Professor of the Practice of Marketing, Fuqua School of Business Peter Heffring President, Teradata CRM Division Former CEO and Founder, Ceres IOS, producer of marketing analytics software Center Scholars Julie Edell Associate Professor of Marketing, Fuqua School of Business Wagner Kamakura Ford Motor Company Professor of Global Marketing Fuqua School of Business John Lynch Hanes Corporation Foundation Professor of Business Administration in Marketing, Fuqua School of Business Debu Purohit Professor of Marketing, Fuqua School of Business Visiting Scholar Scott Neslin Albert Wesley Frey Professor of Marketing, Dartmouth University's Tuck School of Business Center Manager Josh Rose, Fuqua graduate For more information, go to http://faculty.fuqua.duke.edu /teradatacenter or http://ee.fuqua.duke.edu.

"We want (executives) to understand the tools and techniques that one uses to derive benefit from actively managing customer information, as well as the cultural and implementation challenges associated with transforming a product-driven enterprise into a customer-driven one," Edell says.

She is creating a curriculum for the center that will be distributed to other universities that develop CRM programs. A textbook sponsored by the center and authored by Don Peppers and Martha Rogers, will be published later this year, and the center plans to produce a journal. Additionally, Edell and other staff members are developing case studies, similar to Harvard Business School's studies, to teach CRM best practices.

The center also plans to capture actual data that students can analyze using a variety of CRM tools. The hands-on experience will provide deeper insight into how technology can mine customer data to solve actual business problems. As a first step toward this goal, the center will distill Teradata's CRM software suite into a CD that can be distributed to other schools. This tool will enable the academic community to teach the benefits of analytical tools without a significant hardware investment.

Another way executives and academicians come together is through events like the Conference on Customer Relationship Management: Customer Behavior, Organizational Challenges and Econometric Models, held in early 2002. The conference was co-hosted by the center and the Marketing Science Institute (MSI), a well-respected organization dedicated to marketing research.

John Lynch, an MSI academic trustee and the Hanes Corporation Foundation pro- fessor of business administration in marketing at Fuqua, organized the conference, which was designed to get the attention of top academics. "MSI's mission is to initiate, support and disseminate leading-edge studies by academic scholars," he explains. "Our thought is to be a mini-Marketing Science Institute centered on the topic of customer relationship management."

Research is well under way, with three funded projects in the works and several under consideration. Academic research will both identify and analyze current CRM challenges to shape the field's future.

Destination: ultimate CRM
The future is far more than just a few research projects and a couple of conferences. It's the results of those activities and others like them that will ultimately revolutionize everyday business operations and change the direction companies take toward reaching their goals.

The center intends to become the place for CRM thought leadership, developing standard practices that eventually become universally accepted and implemented. It's about becoming what Heffring refers to as "a center of expertise" that everyone looks to as the unquestionable leader in the field of customer relationship management.

Rogers is excited about what she sees as the "slow but sure" validation of CRM as an important part of any business curriculum. "I think what we're seeing is a growing understanding that we need to be able to measure and account for the value of customers," she says. "If we can perform a valuation of individual customers, then we can learn how to grown their value and manage that process."

Certainly, the Teradata Center for Customer Relationship Management at Duke is on the cusp of a new era in marketing, one that will impact every business in every industry as it develops. As Rogers so wryly puts it, "It's only the global economy, but other than that, no big deal." T

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CRM: enterprise-wide and worldwide

Thanks to the Teradata Center for Customer Relationship Management, the future of CRM has never looked brighter. The center arrives just in time to prepare businesses for the next wave of marketing methodologies. Giga Information Group recently reported that "the need for CRM is unabated. We believe that CRM as a critical business process and company differentiator is here to stay." However, economic changes and early project disillusionment can lead companies to reevaluate their CRM plans. Giga noted that there is a decided shift away from depart-mental CRM toward enterprise CRM—a trend emerging both in the United States and abroad. "Enterprise integration is the fastest growing issue, named by 21% of U.S. companies and 17% of European companies. Companies are beginning to recognize that CRM systems must work in conjunction with—not outside of—enterprise and inter-enterprise operations," according to Giga's October 4, 2001 CRM Outlook report. European CRM initiatives face an especially fertile time ahead as many public services are deregulated. "Public services are facing the opening of their traditional market to competition. (European CRM) growth will likely be 25%-30% in 2002, and 60%-80% in the period from 2002-2004." Despite its growing importance, CRM program performance is still under-measured, with only 32% of U.S. companies and 31% of European companies measuring or planning to measure CRM benefits. Giga says, "Executives and project managers are flying blind, with only primitive warning signals to indicate what approaches are actually effective with customers or identify new processes bottlenecks." Based on emerging trends, Giga Information Group predicts that in the next two to four years: * CRM benefits will remain compelling. "Product commoditization across industries, as well as declining economic growth, will continue to force companies to look to non- product service and relationship management to differentiate businesses and keep valuable customers." * Interest in enterprise CRM will grow. "Increased interest in enterprise CRM will translate into significant implementations in the next 12 to 18 months, resulting in increased CRM growth and continued momentum." * CRM will become more successful. "Project slowdowns and reevaluations in 2001 will result in more pragmatic and ultimately successful CRM implementations (in the future)." * European CRM needs will be addressed. "CRM vendors will learn to appeal to European concerns for architecture and more coordinated action, resulting in increased Euro-pean CRM adoption." * Innovations in CRM will abound. "Increased company interest in CRM point products or custom implementation will result in a new wave of CRM innovation, prompting additional CRM purchases and broader adoption in more industries." * CRM ROI will be the new focus. "Companies will overcome change management and other challenges and be able to demonstrate (and measure) CRM ROI."

 

PHOTOS BY MICHAEL JOHNSON