Sep 19, 2019

Chris Lundberg

The Declining Value of Your CRM

It’s ironic that I’m writing this article because I built a CRM that thousands of nonprofits used, but I have come to feel that the amount of time, money and energy people spend on their CRM and consultants is a massive misuse of resources. We are now in an omnichannel world where no one system can do it all. I see a future where nonprofits shift their time and energy from their CRM to building a data infrastructure to support a truly donor-centric journey.

Thinking Beyond Your CRM

I’m now asking the question, is a CRM really that important for a modern nonprofit? In today’s world, your CRM is only one part of a constellation of technologies you use. Digital advertising, social media, modern payment processors, and voice technology (like Alexa and Siri) are becoming more valuable. For historical reasons, we put the CRM above all others when it comes to planning, budgeting, and staffing. Have you heard an organization discuss a five-year plan and an RFP for their Digital Advertising program? Or spend a million dollars on a tool that helps them optimize social engagement?

Our demands upon a CRM have not kept up with the changing technical landscape. For example, we don’t demand that our CRM natively accept mobile payments like Apple and Google Pay, but we expect this for retail sites. We see organizations pay thousands of dollars to customize fields that aren’t even visible outside the organization when instead the focus could be on meeting your donors on the channel they prefer.

Perhaps it boils down to the comfort of control. Knowing who your supporters are is one of the key tenets of marketing and organizing. Anonymous giving is often frowned upon, because the value is in the long term, not from a one-time gift. But if there is one thing the last election taught me, is that it is possible to have an impact across 300 million people with a focus on social media and negligible investment in traditional CRM and organizing tactics.

Personally Identifiable Information (PII)

This includes information like donor name, address, email, phone, etc. CRMs are a tool heavily designed to support the aggregation and analysis of PII. How many supporters do we have? Who gave last week? Did they also give 10 years ago? And it seems like there’s so MUCH you can do these days with PII! Identify people across email and direct mail, append thousands of fields of targeting data, model, share, collaborate, predict — it’s like a big data party!

But most social media sites now hoard that PII. Ever try to get an email address from Facebook? Legislation in California, Vermont, Canada, and the EU (via GDPR) has started to sketch out what individuals expect of privacy. And in reality, most people don’t like that you’re throwing a party where they paid the (PII) bill. As users gain more control of their own information, the value of PII will begin to erode, and with it the value of the CRMs most heavily oriented to it.

In today’s world, your CRM is only one party of a constellation of technologies you use.

The rise of the ‘Omni’

Now it’s unlikely that any single online channel will surmount the money raised in direct mail. But in aggregate, the hundreds of channels of communication and payments now available to consumers easily does. When was the last time you sent a check to Amazon? It is obvious that omnichannel is king, but it is easy to stay in the familiar territory of embarking on a CRM migration that promises to be an all in one.

In an ideal world, your donors should be able to find you on all the socials, Twitch, Search, Smart TV, Voice and receive your direct mail, email, and texts. Giving should be through your donor’s preferred method SMS, Credit Card, PayPal, Apple Pay, Google Pay, check, or telephone. Yet how many CRMs allow for this? Yes, the majority of donations still come from legacy channels which makes it hard to shift resources, but shifting the equation from volume of gifts to ROI per channel tells a strikingly different story. Fractional effort in those channels will have a better ROI than traditional means, and if your CRM doesn’t know how to work with that data, it’s time for modern technology.

In summary, with the reduced availability of PII (via hoarding and privacy laws) and the rising value of new channels, it’s time to think beyond your CRM. Start backward with what your donors expect and experience from the retail world and use a set of modern tools to support a donor-centric journey. This includes focusing on a data warehouse, integration technologies, modern source coding, and other business intelligence and data visualization tools to really capture the value of our omnichannel world.

This article also appeared in the Marketing AdVents magazine produced by Direct Marketing Association of Washington.

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