Know which questions to ask and which pitfalls to avoidA single person might interact with your organization in multiple ways — for example, as a donor, a volunteer and a customer who buys one of your products. For now, you might assign a different staff member to keep records about each type of relationship. But what if everyone on your staff could share this information, keep it current, and use it to follow up with constituents in a coordinated way?
Enter software for customer (or constituent) relationship management (CRM).
What's driving the purchase?
Consider the full range of your constituents, which may include:
- Program participants
- Event participants
- Staff members
- Partner organizations
The need to maintain accurate and useful information about all of these people is what drives investment in CRM software.
How will CRM software fit into your processes?
Before purchasing CRM software, document your organization's processes for staying in contact with each group of constituents. Ask the following questions:
- Which contacts occur only once, such as a single phone call or email?
- Which contacts occur more than once — for example, through multiple calls and emails as well as in-person meetings?
- Which staff members make these contacts?
- What kind of information do staff members collect during these contacts?
- How is that information stored — in paper-based records, spreadsheets or other applications?
- Who maintains and updates this information?
To drill even deeper, put yourself in a constituent's place. Assume the role of a donor, client or other constituent. Put yourself on the mailing lists for this group. Fill out contact forms and see how long it takes to get a response.
While gathering this information, you might discover ways to improve a process without new technology. For example, sending more timely acknowledgments to donors is something you can probably do immediately — no software purchase required.
What are other important factors to consider?
Technology consultant Paul Hagen offers these tips when selecting CRM software:
- Reach out to nonprofits with a capacity similar to yours. Find out what CRM software they're using and how it integrates with their processes.
- Choose software that closely aligns with your daily operations. If your organization is focused on delivering services, for instance, then look for CRM software that excels at tracking client information.
- Think compatibility. Before purchasing any software, make sure that it's compatible with your existing systems.
- Stick to your budget. In general, aim to keep technology spending at 4 to 7 percent of your annual budget (not including capital expenditures). If new hardware or software could double or triple your capacity, however, then consider going over that percentage.
- Account for training. When calculating the total cost of new software, budget for staff training. You might train several staff members to become in-house experts on the new software, so that your institutional knowledge remains intact if one of these employees leaves your organization.
What are the most common pitfalls?
If you choose an open source CRM application, remember that annual subscription fees may apply. You might also need to hire a consultant to install and customize the software.
Also take care with terminology. "CRM" has become a buzzword that's used to describe a variety of applications with a wide array of features — and the term "all in one" can be misleading. You probably won't find a single application that meets all of your needs. In fact, many nonprofits choose to use several CRM tools with different but complementary features.
To avoid the pitfalls, get a demonstration of several CRM applications and, if possible, test a few options on a trial basis before you buy. Also remember that CRM software is just one part of a larger strategy. To get the most benefit from any application, know exactly what outcomes you want to achieve with each constituent group — and what information you need to achieve these outcomes.