Databases > Planning A Database

What Is Customer Relationship Management In The Third Sector?

By Stuart Lunn, Infoworks

A simple database just won’t cut it anymore if you really want to engage with your supporters and clients. Stuart Lunn at Infoworks looks at the background of Customer Relationship Management (CRM), the current marketplace and how to choose and succeed.

Functionality and philosophy

In the commercial world, CRM is a joined-up business strategy for systematically managing interactions with clients, with a view to broadening and deepening a client’s relationship with the company. In the third sector the philosophy has evolved from relationship fundraising into standards for all stakeholder interactions and strategies for progression, e.g. taking a casual enquirer through to service user on to donor, volunteer and eventually an advocate for the organisation.

The philosophy is the most important thing, but when most of us say CRM we mean software.

The core functionality of CRM software is contact, task, interaction and relationship management and (e)mailing/communications integration. Over this there are separate tracks in commercial CRM for Sales/Campaign/Marketing focused and Service focused business – in third sector implementations fundraising is closer to the Sales track and case management is closer to the Service track.

But there’s more to CRM packages - most offer Workflow, Analytics and Extension:

• Workflow enables you to automatically, say, send an ‘all OK?’ email and enter a task for a follow-up call to all clients who’ve been dormant for a year.
• Analytics means data on which you might base decisions – e.g. 80% of publications purchasers go on to become members.
• Extension means a marketplace of add-on modules and/or bespoke add-ons.

Third sector CRM and the market

Most of us now want a single solution that covers all the relevant CRM functionality and any third sector specific functionality we need, for example:

• Fundraising
• Membership
• Event
• Case management
• Social networking
• CMS integration

That’s a very broad spread, and it means CRM suppliers now compete with the 100 existing charity software providers active in the UK market. CRM suppliers can compete because they offer third sector flavoured implementations and develop extensions for more specialist areas.

Charity software providers are the specialist areas and provide their own version of all the “CRM” functionality anyway. Whilst CRM is the term of the moment, it’s a mistake to ignore the offerings which have developed in the sector over many years. Ours is really just one market - the market for third sector information systems.

But the calm waters of this market have been rocking since the CRM supertankers sailed in, in the form of two of the most the powerful corporations in the world – Microsoft (with their Dynamics CRM)and Salesforce. And if that wasn’t enough of a change, from left field we’ve now got the open source providers - CiviCRM and SugarCRM - too.

Trouble ahead for charity package suppliers? Yes, some will sink, but others will grow stronger. And for buyers, it’s good news: the functionality is incredible, prices are falling and the move to the cloud is gathering pace.

How to choose

So how do you choose the best CRM system for your organisation?

• Firstly, don’t just think CRM; do consider charity specialist suppliers too - judge on merit, not buzzword.
• Focus on your organisation – identifying and verifying your underlying detailed requirements helps you judge suppliers and provides fixed goalposts for the project.
• Look for software and people with the best fit for your organisation. Go see it in-situ.
• Use the Lasa CRM Scorecard with ideas pooled from software suppliers and Lasa consultants to help you compare offerings.
• Remember you will change considerably in the next five years, and if your information system can’t support your new/different business processes… then you’ve failed.

How to succeed

Choosing is the easy bit, and not as pivotal to success as you’d think: we see organisations achieve great things with no money and awful software but top quality thinking. Conversely, we also see fantastic software fail.

Modern CRM/third sector packages are huge and very sophisticated - take your managerial eye off the ball during the implementation and you will end up with a very sophisticated mess.

Getting an information system to provide consistently good support across your organisation over just a five year period is hard work and surprisingly rare. The best recipe for success is:

1. A plan for how your information systems can best support your organisational objectives
2. A board-level sponsor
3. Quarterly plan-progress checks
4. Annual top-level reappraisals

It’s easy to get sucked into a CRM beauty contest. But don’t watch that, watch this: what support do we need from our information systems and how do we make it happen?