In Search of CRM Part 2: Searching for Software
Finding Constituent Relationship Management software isn’t easy – there’s no such thing as a one-size-fits-all solution. This article, the conclusion of Paul Hagen’s two-part series, helps you understand the CRM marketplace and offers practical advice to help you define a software infrastructure that will work for you.
Many vendors lead you – or even mislead you – to think that they offer a one-size-fits-all Constituent Relationship Management (CRM) solution. However, for many organizations, there simply is no such thing.
Part 1 of this article discussed a process for understanding your constituents and processes. Here, in Part 2, we focus on identifying a software strategy that will support those constituents and processes. This isn’t, however, an easy task. We’d like nothing more than to recommend specific software to meet your needs, but with hundreds of software solutions that help with some aspect of nonprofit constituent interactions and a huge diversity of nonprofit models and missions, that simply isn’t possible.
Instead, this article will help you understand the CRM marketplace and establish criteria that will help you narrow the vendor field to best meet your needs. As CRM is not just a piece of software – but a strategy is supported by software –this article will help you bridge the gap from CRM strategy to CRM software.
An Ideal Piece of Software May Not Exist
All these vendors offer solid applications that may form part of your CRM infrastructure, but most larger nonprofits will find that none of them will fully cover all that’s needed. Odd-ball processes, budgetary constraints, other key strategic applications, and a myriad other reasons often work to undermine the all-in-one application option. That’s okay. Many nonprofits use multiple software packages to meet their needs, such as Blackbaud for off-line fundraising and Convio for online interactions. Often, nonprofits have more sophisticated email outreach needs than the vendors above provide, so seek to add a bulk email package like Vertical Response or WhatCounts. Human services organizations have constituent tracking and reporting needs that none of these vendors cover out-of-the-box, and so need to add or substitute a specialty case management application.
In the real world, many nonprofits build a CRM infrastructure by choosing several packages with different but overlapping focuses. The diagram below shows some examples of typical CRM focuses and a few of the vendors within them. Note, however, that that this diagram isn’t intended to be exhaustive – there are far more vendors than we could map out for this article, and many of them focus on more than one area.
Common CRM focuses with example vendors
As mentioned above, CRM is not a piece of software – rather it’s a strategy supported by technology. Multiple systems may be the most cost-effective way to support your strategy. In fact, some less critical constituent processes may be best supported in less official ways, such as through spreadsheets. Acknowledging each piece of data and having a plan to tie relevant data into a larger context – even if that means uploading the spreadsheet weekly into other key systems – is the most important part.
Be Wary of Sloganeering
Regardless of the reality outlined above, vendor marketing is often geared to make you believe there is a single technology silver bullet. Many packages will say they handle all your needs when in fact they provide very limited support in some key areas. Be wary of misleading terms and misdirection, including:
- "All-in-one solutions". Except for the smallest, most targeted nonprofits, there’s likely no such thing as an all-in-one solution. At best, organizations can consolidate some disparate data repositories within a package – which is a good step. Nonprofits may be better off investing in ecosystems of vendors that already integrate with each other, rather than a single one that tries to solve everything.
Ground Your Software Search with Strategic Priorities
Part 1 of this series outlined a methodology for reviewing your constituent interactions through their lifecycle. Use this review to focus on your key constituent groups and the processes that will provide the most significant benefit to your organization’s mission. Look for software that provides in-depth support for these most critical areas to use as the “core” of your CRM software. For instance, if your organization is highly focused on outreach and advocacy, you’ll likely need deep support for list segmentation, emailing, and direct mail. On the other hand, if you’re strongly oriented towards direct client service, a software package that provides sophisticated support for client tracking will be a critical part of your CRM mix. Look for similar Marketing, Sales, or Service processes that repeat across multiple constituent groups and ensure that your software can support these interactions.
Prioritize the additional constituent groups and processes that you’ll need to support, as well. Use whatever metrics you currently track to project the impact of better supporting technology. This prioritization process will give you a mechanism to weigh vendor functionality without being distracted by the glitz of “nifty” features that don’t add substantial value to your mission.
Narrow your software search by focusing on areas where consolidating data would yield high value for your organization. For example, one nonprofit realized that it had three staff interacting with and recruiting local businesses for different purposes. The organization realized that there was great upside for cross-promotion by consolidating these interactions in one place so that all three staff could see the opportunities.
Make the case to management and board members with actual projected growth numbers for revenue, program participation, outreach potential, and other mission-related impacts. This not only provides you with support that you may need from the board and management, but it also will focus you on the really critical functionality that you need from software to achieve specific goals. The project leader at one organization wrote the following scenario as part of his strategic CRM plan:
The Power of the Network
True story: A supporter, Will, sent a simple text mail invitation to support him on a virtual Walk. His request resulted in $1600 total from 12 friends. No visuals, no links to a website to read more, just a simple, heart-felt letter.
Now, imagine the possibilities. Imagine he had a link to an inspirational video supporting the outreach. How much more would have been given? Imagine if Will’s email contained the technical programming for his friends to automatically forward the invitation to their friends – even a few? How much more would have been given?
Now, imagine a similar letter went out to 20,000 properly qualified "constituents" from our consolidated CRM database? And, what if just 5% of them collected an average of $50 from an average of 10 friends each (much less than the story above)? That’s $500,000 in one mailing! Enough to pay for our entire CRM capital investment.
Keep Your Capacity in Mind
The solution landscape for an all-volunteer run nonprofit with a $50K budget will be different from a multi-national nonprofit with a $100M budget. Capacity has three components:
- Budget. IT spending as a whole should run between 4-7% of your annual budget, not including capital expenditures. That said, it could make sense for a small organization to spend $100K on tools if they will double or triple its capacity or revenue.
- Staff Time. Thinking about custom newsletters targeted toward different constituent groups is great, but someone has to write and edit them. Don’t buy technology functionality that you haven’t first budgeted staff time to use.
- IT Staffing. Organizations with strong in-house IT staff may want to consider hosting a solution such as SugarCRM or CiviCRM in-house where they have greater technical control over the application, rather than relying on a fully managed service like Salesforce.com or (CiviCRM’s ASP). Nonprofits should plan for in-house staff redundancy to reduce the risk of a key staff person leaving.
Look for solutions that are not only within your price range, but that can offer examples of organizations that are successfully using their product who have staffing and time investments similar to your own.
Plan and Budget for Data Synchronization
Never acquire a new piece of software without understanding how you will synchronize data with your existing systems. Which repositories will you replace and which must stay? Some nonprofits have critical applications (e.g. ticketing, facilities management, fundraising, or some custom-built application) that simply cannot be replaced. Give preference to potential vendors that already integrate with or share data these systems. For example, if you have a strong development department happily using Blackbaud and resistant to giving it up, give extra weight to vendors that already have integrate with Blackbaud. Similarly, if your IT staff (or favorite outside contractor) built a custom application in a .NET environment, give extra weight to those vendors with software built on .NET to potentially save money and time finding another firm to do implementation.
Re-visit the “Build Vs. Buy” Decision
Buying a pre-packaged suite gives nonprofits a lot of integrated functionality almost immediately. However, some open source software platforms like CiviSpace/CiviCRM or SugarCRM and commercial providers like Salesforce are providing increasingly powerful systems with tremendous flexibility to “build” custom-tailored systems rather than buying one-size-fits-all packaged applications. These frameworks have matured enough over the last couple of years that they become a very interesting option for nonprofits who can undertake a development process.
These systems are conceptually similar to - but far more powerful than - building with database platforms like Access or Filemaker Pro. They provide considerable building blocks for a CRM system, but allow you to completely customize your environment if desired. You start with robust contact management functionality, and healthy ecosystems of tool or module providers provide additional building blocks for piecing together large, diverse applications. These building blocks are wide ranging, with support for bulk email, online transactions, Outlook integration, content management, accounting integration incident management, call center support, and more. These ecosystems also typically involve ways that you can add on functionality by building it yourself if necessary.
The result can be a very flexible and expandable infrastructure built with powerful, commercial-grade and/or open-source components and the ability to tap into potentially billions of dollars of software development. However, as with any custom development, you can get yourself into trouble. If you don’t have a clear sense of what features you need and what processes you need to support, you may end up building a mess.
While the idea of vendor ecosystems is gaining ground with the development of well- documented and highly used APIs, beware of vendor marketing. Look for vendors who can demonstrate how 3rd party vendors use the API today to integrate their tools and bring greater functionality to meet the specific needs of various organizations. For more, see NTEN's discussion of this topic.
Don’t Wait For New Technology to Improve Your Work
- Standardize data collection, regardless of where it’s kept. Ensure that all forms collect data in the same way, including web, paper, and phone-based collection. Collect only information that you will actually use. One organization created a “wall of forms” to see visually the kind of data everyone collected, where they over-collected data, and to spot discrepancies among forms.
- Test the constituent experience. Put yourself in the shoes of a constituent and walk through particular processes as if you yourself were a patron or supporter of the organization. Fill out web forms and check the response time; have a friend inquire about program details; observe interactions with staff at an event. Look for ways to a constituent’s expectations when interacting with your organization and staff. A review at one organization revealed that web requests for call-backs were being unfilled. Another found that its multiple types of sign-up forms in the lobby were confusing to visitors, who rarely signed up.
Finding software that will help an organization interact better with its supporters starts with knowing who those supporters are and the ways in which interaction processes could be improved. Prioritize these processes and define hard goals for software improvements, and you’ll be armed to sort through the myriad of vendors out there. Temper this with your organizational capacity to purchase and utilize new technology. And finally, be sure that you have a plan for how to synchronize data before acquiring any new piece of software in the case that multiple tools are involved. There may or may not be one great CRM package for you, but with a solid strategy– built around your own data, constituents, and process– you can create a CRM software infrastructure that works great for you.
Paul Hagen is the founding partner of Hagen 20/20 (www.hagen2020.com) a consultancy that helps social enterprises and nonprofit organizations scale through the effective use of technology. He provides business and technology planning, change management, process re-engineering, and project management services for clients. Previously, Paul was a senior analyst at Forrester Research where he led research efforts on technologies such as customer relationship management (CRM), knowledge management, personalization, search and intelligent agents, online education, collaboration tools, and interface design. Paul's career started in the nonprofit and education sector (U.S. Peace Corps, Teach For America, Edison Schools), and he's held advisory board positions for the National Strategy for Nonprofit Technology (now N-TEN), Youth Technology Entrepreneurs, and Purple Sun. Paul holds a M.Ed. from Harvard and a B.A. from Stanford.