CHARTING A PATH TO A HEALTHY CRM ECOSYSTEM

CHARTING A PATH TO A HEALTHY CRM ECOSYSTEM A white paper by build Consulting Peter Gross and Kyle Haines

TABLE OF CONTENTS What You Will Learn Introduction What is a Healthy CRM Ecosystem? Step I Assess your CRM Ecosystem Organizational CRM Capacity CRM build Index Understanding your Constituents and Their Engagement Engagement Map Constituent and Data Landscape Constituent System & Data Landscape Map Step II Developing a Blueprint Project Blueprint Conclusion About build 3 4 4 5 5 6 7 7 9 9 10 10 12 13 CHARTING A PATH TO A HEALTHY CRM ECOSYSTEM A White Paper by build 2015 build Consulting This document is subject to a Creative Commons License (Attribution- Noncommercial- No Derivatives (http://creativecommons.org/licenses/by- nc- nd/3.0/legalcode ) Attribution should cite the Charting a Path to a Healthy CRM Ecosystem White Paper published by build Consulting in 2013, with a link to the website www.thisisbuild.com. Bibliographical references should credit Peter Gross and Kyle Haines as authors, and build Consulting of Nashville, TN, as the publisher.

WHAT YOU WILL LEARN This whitepaper describes how nonprofit organizations can successfully assess and improve their CRM ecosystem. You ll learn that successful CRM projects designed to build CRM capacity are not approached as a series of tactical projects. CRM projects are approached holistically and strategically. The reader will come away with an approach that allows them to answer the questions Where are we now? Where do we want to be? and How do we get there? Specifically, you ll learn that: A healthy CRM ecosystem starts with executive leadership committed to its success Before you can properly nurture your CRM ecosystem, you have to ensure that the organization is culturally positioned to embrace CRM In a CRM survey, a full 87% of respondents believed that their CRM projects failed due to cultural and organizational challenges While each organization is unique, CRM ecosystems suffer from very similar problems across organizations Nonprofits must consider the wide range of constituent groups when making decisions about their CRM ecosystem Documenting and diagramming information on your systems, constituents, and challenges helps gain organizational agreement on solutions 3

INTRODUCTION In our experience, there is a chasm between the importance that nonprofit organizations say they place on effective CRM and the resources and attention they actually apply to CRM. Building strong relationships with constituents is crucial to the success of your nonprofit. The key to building those relationships is a highly functioning CRM ecosystem with commitment from across the organization that CRM is a vital component of fulfilling the organization s mission. The CRM Forum, an online resource for CRM project managers, surveyed managers about the factors that led to failed CRM projects. 4% cited software Constituent Relationship Management (CRM) Defined problems, 1% said they received bad advice, but 87% pinned the failure of their CRM programs on the lack of adequate change management. 1 WHAT IS A HEALTHY CRM ECOSYSTEM? CRM is the entire ecosystem for engaging with constituents that affect the success of your nonprofit organization. The ecosystem is comprised of the culture, people, processes, data, and technology to enable effective engagement with constituents. A healthy CRM enables a panoramic view of constituents that encompasses all the ways in which those constituents are, or should be, connected to your organization. A healthy CRM ecosystem gives you strategic insights and a robust analytical capability to learn not only about individual constituents, but also about the broader psychographics of your volunteers, donors, event attendees, program participants and others. Unfortunately, you are not alone in feeling the frustration of poorly designed and managed systems. build routinely finds nonprofits that are helpless to fully describe the problem with their CRM ecosystem let alone develop a plan for addressing it. Luckily, there is a way to move forward. In order to build the kind of CRM ecosystem your organization needs, you have to follow a deliberate process that allows you to gain true understanding of your situation, the steps ahead and then build the capabilities, systems, and processes that support outstanding CRM. This White Paper outlines the process that build follows when we assess nonprofit CRM. It helps us to create a Blueprint that grounds us in the realities of the organization, so that we can create meaningful change, in a way that meets the organization where it is today, and how it wants to position itself for the future. 1. Avoid the Four Perils of CRM, Rigby, Darrell K; Reichheld, Frederick F.; Schefter, Phil Harvard Business Review http://hbr.org/2002/02/avoid- the- four- perils- of- crm/ar/pr 4

STEP I ASSESS YOUR CRM ECOSYSTEM When evaluating CRM it is easy to slip into an analysis of tactics business processes, staffing, training, data cleanliness or software functionality rather than on understanding how CRM is aligned with your organization. This narrow focus causes organizations to notice symptoms rather than root causes akin to blaming your furnace for a cold house when the real problems are leaky windows, a hole in the roof, and the fact that your kids keep leaving the back door open. An over- focus on software will jeopardize your efforts to make your CRM ecosystem outstanding. Your assessment must encompass three components: 1. ORGANIZATIONAL CRM CAPACITY 2. UNDERSTANDING CONSTITUENTS 3. SYSTEMS AND DATA LANDSCAPE ORGANIZATIONAL CRM CAPACITY The build CRM Index outlines eight measures for evaluating your CRM system. These components are outlined in Figure 2. The components range from measuring how engaged your leadership is, to evaluating the structure and cleanliness of data. In my experience, organizational engagement is the cornerstone for any effort at developing healthy CRM. At a recent panel discussion, we talked about big data, small data, and meaningful metrics that demonstrate nonprofit effectiveness. But those metrics are not useful without the involvement of a wide variety of internal departments all of which interact with constituents and are responsible for achieving our mission. Internal communication and relationship building is critical to fostering the collaboration that ensures healthy CRM. Otherwise, the data, systems and processes cannot accurately represent the true picture of the donor, messaging will be skewed, and stewardship becomes very difficult. Ann Maier, Vice President Development Communications and Operations National Geographic Society Understanding how your organization scores on each of these measures forms the basis of an overall CRM assessment. In addition to helping frame the capacity of an organization to change, it allows you to properly diagnose issues and gain agreement on them across the organization. This agreement is absolutely critical to your ability to move forward. The assessment allows you to develop a series of findings that spell out the organizational challenges to effective CRM. This is a critical step before beginning to identify solutions. 5

Part of knowing where you are, is understanding how far your organization can realistically go. Even if your organization does not have a significant capacity for change at the moment, opportunities still lay ahead. You will have gained a foundational understanding that can help define the scope of the immediate work ahead, while setting the stage for future CRM improvement projects as well. build CRM Index Measure Evaluation Criteria Organizational Engagement Strategy & Constituency Alignment System Adoption & Collaboration Are executives and managers invested in a robust CRM ecosystem? Are your strategies and programs for constituent engagement understood, documented, and serve as drivers of your CRM? Has the organization committed appropriate personnel and money to make your CRM outstanding? Process Efficacy How efficient and effective are your current processes for managing and engaging with constituents? Data Hygiene & Organization Have you aligned your data with your business needs and maintained it as an organizational asset? Figure 1 Technological Capability & System Integration To what extent do the systems that you already have support your mission, your strategies, and your staff? 6

UNDERSTANDING YOUR CONSTITUENTS AND THEIR ENGAGEMENT As you evaluate your CRM, it can be easy to focus exclusively on one or two types of constituents: donors and members, donors and alumni, members and volunteers, etc. However, constituents wear many hats. The more hats they wear, the more valuable they are to your organization. Creating a constituent Engagement Map ensures that your analysis is grounded in the needs of constituents rather than being solely internally focused. This analysis is often most effectively conveyed using a visual representation that highlights the connections across groups as shown in Figure 3. Even without a visual representation, there are many ways to help illustrate an organization s constituent groups. For example, creating a constituent registry - a basic table - helps illustrate the complexity of even the smallest organization. The number of different constituent groups often surprises many of the staff, Board and others. The Engagement Map helps create agreement, across the organization, about the constituents and the engagement paths that need to be supported by the CRM ecosystem. Regardless of whether there are currently systems in place to manage a constituent group, all constituents that the organization interacts with should be identified. Figure 2 "Build it, nurture it, engage them, and they may come and stay. Seth Godin 7

As any nonprofit who has been through a project like a website redesign knows, a key underpinning of the project is to identify your audiences. However, nonprofits often neglect the important step of identifying the audiences that are impacted by CRM, and instead focus narrowly on the constituents who generate the most revenue donors. Emphasis is placed on their experience in the form of how CRM supports cultivation and stewardship, not other key ways that constituents want to engage with, and be engaged by, the organizations they support. However, CRM should support the experience of multiple audiences and constituent groups. While donors are obviously essential, other constituent groups can be just as core to your success. As an example, according to research by Blackbaud, a provider of nonprofit software and services, advocates are seven times more likely to give to an organization if the ask is tied to an advocacy request. 2 A mature CRM ecosystem must support the experiences of many different audiences. The fact is that every nonprofit institution has three indispensable customers : the clients it serves, the donors who support it, and the volunteers or staff members who help get the work done. The failure to serve any one, while tolerable in the short run, will sooner or later undermine its survival. Each of these customer segments represents a market in which nonprofit groups compete. As much as we may like to think that nonprofit organizations don t compete, the facts are otherwise. They compete for donors against other fund-raising organizations, they compete for the time of volunteers against other personal obligations and opportunities, and they even compete for their clients. Mark Kramer, Who Exactly are Customers- of Nonprofits? 3 2. Connecting Online Advocacy and Fundraising, Daigneault, Steve, David, Mark, Sybrant https://www.blackbaud.com/files/resources/downloads/whitepaper_connectingonlineadvocacyandfundraising.pdf 3. Who Exactly are Customers of Nonprofits, Kramer, Mark R. The Chronicle of Philanthropy 2001 http://www.fsg.org/portals/0/uploads/documents/pdf/who_are_customers_of_nonprofit_organization.pdf 8

CONSTITUENT SYSTEM AND DATA LANDSCAPE Even for small nonprofits, constituent data and systems live in multiple places from formal CRM systems to spreadsheets to Outlook folders. Using the Engagement Map in Figure 3 as a starting point, it is important to evaluate: Where constituent data lives How data moves throughout the organization What condition the data is in The Constituent System and Data Landscape, in Figure 4 helps to orient the organization to the diversity of formal and informal systems that help manage and engage with constituents. More often than not, the landscape looks more like a tangled mess, rather than something elegant or easy to understand. If this is the case, there is clearly work to be done to untangle and refine how systems and data interact. The Constituent System & Data Landscape will further serve to inform any future projects that focus on improving CRM systems, processes and constituent engagement activities. Figure 3 9

STEP II DEVELOPING A BLUEPRINT Blueprints translate what we know about our needs and current challenges into a set of plans for building something outstanding. They take the work done during the Assessment to ground the Blueprint in the actual current state challenges and the vision for the future. The Blueprint draws upon the consensus building performed first during the Assess your CRM Ecosystem step. The Blueprint identifies the sequencing required to improve CRM health. Key questions that help inform your organization s Blueprint include: How must your organization change, culturally, to ensure that CRM is on solid footing? How can the projects you identified improve your constituent- centricity? What technology should you keep, add, remove or improve? Should you hire new staff, make changes to your organizational chart, or come up with new job descriptions that recognize the importance of CRM? How must your processes change? How can we be more efficient and effective? What must be documented and how do you keep that documentation refreshed and up to date? Figure 4 10

Once you have developed a comprehensive list of projects, it s important that the organization agree on their relative value to the organization. The projects identified in the Blueprint and their sequencing should be based on: organizational priorities the best return on investment available resources organizational readiness that allow your organization to make changes The Blueprint enables both proper sequencing and prioritization to be the most transformative to your organization s ecosystem. Design must reflect the practical and aesthetic in business but above all... good design must primarily serve people. Thomas J. Watson 11

CONCLUSION Ultimately, the core challenges of any CRM improvement project are to develop a comprehensive view of: what it means to engage with constituents how we engage with constituents why we are doing it and to what ends. Knowing the answers to those questions enables to us to organize our staff, processes and technology to follow, rather than lead, those needs. If you can effectively understand and illustrate this, the better chance of success for making transformative changes to your CRM ecosystem. As you move into improving your organizations CRM ecosystem, you should only take on projects for which you have: (1) the organizational buy- in to move forward; (2) a clear understanding of the cost and the value of the project; and (3) the resources necessary to complete the task. You may have to rely on a combination of resources to advance projects, including internal staff, the organization's volunteers, outside contractors or software vendors. Improving your CRM ecosystem isn't a static process. You must constantly reevaluate where you are and what you need in order to more effectively engage constituents regardless of whether your goal is to raise money, reach more program participants, grow an event or build public awareness. A healthy CRM is the strongest tool for nonprofits to maintain and develop donor/constituent relationships, by providing a 360-degree look at the interests, personal and emotional linkages for every relationship you are developing. It provides the platform that will allow nonprofits to serve and communicate with their audiences in a much more strategic and personal way, while also developing longerterm engagement opportunities. Jill Davis, Director Brand Management and Interactive Communications Elizabeth Glaser Pediatric AIDS Foundation The last twenty years have ushered in an incredible era of systems that can help you engage with constituents and manage operation. It is too easy, however, to get distracted by the lure of new technology and to assume that our problems lie in a software package that can t do everything - because none of them can or ever will. Using the steps outlined above, you can take charge of your organization s CRM ecosystem and take action to understand your challenges, design a blueprint for a better future and then build the future to your specifications. Build is excited to be on that journey with you. 12

ABOUT build For nonprofit organizations, building capacity means the ability to acquire more resources, to deploy those resources more effectively and to achieve a greater level of impact. build helps expand nonprofit capacity through projects steeped in technology, but dependent on ensuring organizational readiness and a balanced approach to the people, processes, and data critical to CRM success. We work exclusively with nonprofits in all stages of CRM capacity building, including selection, implementation, and maintenance. Founded in 2007, build relies upon seasoned nonprofit professionals who understand how to navigate the complexities of nonprofits because they have been there. Former project and team members from CRM implementations at their own organizations, they bring professional wisdom and experience that strengthen CRM projects. build has worked with more than 50 organizations including The American Red Cross, FHI 360, The National Trust for Historic Preservation, and Seattle University. build has a combined 40+ years of experience with nonprofits. This allows build to design custom projects that rely upon the core principles outlined in this whitepaper. For more information about build, please visit our website: thisisbuild.com 13