Do I need a database, or a CRM?

Do I need a CRM or a Donor Database?

Why they are different, and why it matters to you.

Surely, this is an argument in semantics? Donor database and CRM are interchangeable terms – aren’t they? Well, no, we don’t think so – and to confuse the two can put your organisation’s future success at risk. What’s more, we think there’s more to this topic than the thought that “a donor database is for a charity and a CRM is for a business”. That doesn’t do the topic justice either.

Definitions of CRM

Sooner or later the question will pop up – what is CRM anyway? Ask Google, and you’ll get a plethora of articles talking about specific products and a confusion of academic study.

CRM is a long established term for relationship management.  The ‘C’ can mean what you want it to – customer, client, constituent, community, or if you work in partnerships fundraising even ‘companies’ you’re working with for sponsorship and support.

Definitions vary, but typically range around three areas:

  • Academic – Gummeson described CRM as “the values and strategies of relationship marketing with particular emphasis on customer relationships – turned into practical application” (Gummeson)
  •  Broad technology theory –Customer relationship management (CRM) is a system for managing a company’s interactions with current and future customers. It often involves using technology to organize, automate and synchronize sales, marketing, customer service, and technical support” (Shaw)
  •  System providers –Customer Relationship Management (CRM) is a strategy for managing all your company’s relationships and interactions with your customers and potential customers. It helps you improve your profitability” [Salesforce]

Today, CRM has assumed two meanings.  It is both:

  • the approach of successfully managing customer and organisational relationships (be that for business, fundraising or service delivery),
  • the tool which we use to manage the relationships

We think of it as being the 360o view of our customers and the work of the organisation.

Definition of a donor database

 A donor database can be anything from an Excel Spreadsheet or Access Database through to a tool available on the open market or even built especially for you. The definition of a database is usually much more limited than that for ‘CRM’:

 “A database is a collection of information that is organized so that it can easily be accessed, managed, and updated.” (Google Dictionary)

 It’s harder to define an ‘approach’ – both CRM and database are built around storing data so it can be retrieved.

So, what’s the difference?

In essence, the main difference between a ‘donor database’ and a ‘CRM’ system is that the former reflects an old-fashioned, outdated way of engaging with your supporters, and the latter reflects more modern techniques – and more truly reflects the needs and aspirations of a modern non-profit organisation.

The table below gives a quick snapshot of the key differences between a donor database and a CRM system.

Differences between a database and a CRM system

We think it’s important to note the word ‘platform’ when describing a CRM tool. Whereas a donor database anticipates ways of working in more traditional ways – donations received by cheque, mailings sent through the post, donor enquiries received by phone; and mainly relies upon human beings typing data into it – a CRM platform anticipates a very different way of working.

A CRM platform offers the same functionality as the old-fashioned donor databases, but what they also offer is the ability to stitch together a variety of other technologies and data sources – easily, cheaply and with minimal human interaction.

In essence, a CRM platform becomes a place where increasingly data is stored that is entered in other places:

  • A donor upgrades their Direct Debit – and it is automatically updated in the CRM system
  • A donor registers for an event – and it is automatically updated in the CRM system
  • A donor reads and responds to your email – the CRM system records the time they spent looking at your email, the pages on your website they clicked through to, and triggers someone in your office to reply to their emailed response
  • A supporters buys a ticket to one of your exhibitions or shows – and their payment and registration is automatically updated in the CRM system

Why does it matter?

How you think about your relationships is crucial to your success.

It matters, because although in 1995 most non-profits just needed a donor database, we very rarely see organisations with such limited ambitions and aspirations in 2015. CRM platforms are often the technology tools that will meet these needs – but organisations are still buying donor databases instead, and paying the price further down the line. If you buy a donor database thinking it’s a CRM system, then you’re going to be in trouble.

CRM is the only way to achieve the 360-degree view and unlock the power of your supporter base.  It is about proactively managing your interactions with current and future customers (or constituents, supporters, contacts depending what you call them).

Success is as much about your attitude to supporters as it is about the tools you use.   

Attitude test 1: Imagine for a minute you’re a volunteer with your organisation.  A volunteer may be ‘approved’ by HR, paid expenses by finance, supervised by a person in a remote location on a particular project, and also be part of a communication list and receive information about your activities and appeals. And as volunteers are often superb supporters of charities, they might already be a donor, too.  How would you describe your experience of working with your organisation in the volunteers shoes?  Are you happy with that?

Attitude test 2: How do you react to the question – does every one we meet want a relationship with us?   Do you think about a) how to manage that using data protection, data management and opt-out rules or b) communications and engagement options and approaches that might help people engage?

So, do I need a database or a CRM?

The answer to this question lies in your organisational strategy and culture – and your attitude…

Few traditional fundraising record systems are actually CRM systems.  That’s not surprising as most were invented before the era of CRM.  Most databases are essentially highly featured lists of donors and gifts. CRM systems are platforms that enable you to work with a single set of data across your whole organisation.

Do I need a database or a CRM?  You should consider a platform or CRM approach if:

  • your strategy includes action words like ‘grow, develop, engage, build, increase , support’ – you need a scale-able and accessible system that can grow with you.
  • you use multiple digital tools which each hold data about a customer – for example your website content management system, email marketing tool, social media tool.
  • your customers are involved in more than one way with you – eg buying tickets for an event and making a donation to an appeal, volunteering and donating.
  • You work in or across multiple locations – not everyone is office based and you may have multiple sites, so need more than a single point solution.

 

NXT Steps – do I need to make a move?

NXT Steps – do I need to make a move?

Steve Thomas and Dan Lockeretz

A question we have been asked a few times over the past few months is whether Raiser’s Edge NXT is going to be a good move.  Our answer, of course, depends entirely on who is asking the question – whether you’re a small charity or large, what your main activity focus is and your strategy and goals both now and in the next few years.

Our answer is also couched in the caveat that this is based on our knowledge and information about the system,  the functionalities that are expected to be included and the limited information about the product roadmap for how Blackbaud may (or may not) choose to develop the product in the future.

Over the past few months we’ve spent some time looking at tips and tricks for making the most of your investment in RE – covering integrations and coding and looking at some of the features that Raiser’s Edge NXT will include.

Our rationale in covering these topics is simple.

Database and CRM are big decisions and investments for all organisations and the prospect of the need for change can bring people out in a cold sweat.  So it’s natural to make the most of what you’ve got.  But it’s also appropriate to take a step back every now and then and ensure that what you have meets your needs and look at the plans you need to make to ensure your tools continue to meet your needs.  Part of this will obviously be looking at Raiser’s Edge NXT and the options it presents for you.

NXT is a natural step for fundraising charities

Blackbaud’s major strength is fundraising.  There is no one else who knows fundraising like they do – years of accumulated knowledge and experience have come together to create products and services to meet a fundraiser’s needs.

So if you are a fundraising-focused organisation, where you are currently using RE7 well and have no need to extend your requirements, stick with it and look at Raiser’s Edge NXT.  If you are solidly and successfully working with major donor fundraising and direct mail activities, RE remains your friend.

Also, if you have had issues with user-adoption – the fancy way of saying getting people to engage and use RE, then RE:NXT could be part of the answer to your struggle.  The interface – the way information is displayed, dashboards, and the role-based views – are all designed to make for a slicker, friendlier, user experience.

Take a step back to get a better view of your strategy and plans 

If digital is a main thrust of your strategy and goals – increased digital integration and a real ‘digital first’ approach – then you might need to look more closely at the detail of NXT. You might need to take a step back and consider what is included if you are looking for a palette of fancy features available remotely.

The current plans for the roll-out of NXT are focused on visual functionality like views and reports. It’s going to take Blackbaud time to develop features and roll them out. The plan is to migrate all relevant features in RE7 into Raiser’s Edge NXT. Our advice is always to make a choice based on what is a certainty and to look carefully at what remains an uncertainty or can’t be pinned down (advice which to be fair applies to any system or investment decision you make).

Your IT infrastructure will also be a part of your decision making process.   If you are already on a Blackbaud hosted service, then you’re already part way to Raiser’s Edge NXT, and it’s perhaps a case of ‘what do you have to lose?

It might also be sensible to consider NXT then if you are looking at moving your hosting – but equally if you are in this position, you should look at a range of options and not just one supplier.

Take two steps back to get a better view of the landscape

 The two steps back overview will be helpful if any of the following fit your organisation or situation

  • You are not solely focused on fundraising
  • Integrating fundraising, campaigning, service delivery, operations and finance (or any combination) is important to you
  • Extending your organisational reach is a goal
  • Wanting a single source of data across the organisation is on your radar
  • Stronger digital integration and functionality (everything from CMS, social, apps, giving platforms, comms and marketing tools for example) is a current or future requirement
  • You are looking at your IT infrastructure and hosting
  • You are concerned about licensing and user costs

Taking steps back will give you the space to truly evaluate the tools and options.  RE7 and Raiser’s Edge NXT may work for you – but equally by taking two steps back from where you are now, you can have a clearer view of the wider picture of options available to you.  You may decide to stay with Blackbaud, of course (it’s a solid reputable product that you are familiar with after all), but you might find that evaluating other market options helpful in leading you to ask questions and compare where you are now and where you want to be in the future with the differing tools and functionalities on offer.

As Blackbaud develops, they are offering more functionality that other providers already offer – such as Blackbaud’s new marketplace of add-ons and services. Soon to be launched, this follows the success of Salesforce and MS Dynamics which both have well established online “stores”, rather like a corporate equivalent to Google Play or the App Store.

I’m not sure whether NXT will meet my needs – what now?

If you are in the camp where you need to take two steps back and look at what’s right as you move forward and make choices about next steps, there are some areas you might need to consider when making a top-level comparison and deciding who you might want to talk to about your next moves.

Make sure you have considered all the options for extending your RE investment in the interim as this process should be a considered review and decision, rather than a rush.

Look at the type of CRM options you have

Platform solutions are extendable – they can be grown and developed in line with your needs in a more cost effective way than static solutions can.  Using the API (application programme interface) – the code – behind the product, developers can easily work with the system to configure, add and personalise according to your needs.

We know that there will be a REST API (REST is a standard for making API’s available) for NXT, but don’t know how much direct integration is going to be possible.  We may not know for some time as the roadmap for rolling out all the products and features will take time.  It depends on the complexity of your needs how successful API integrations might be to deliver what you require – if you need a few ‘pings’ between x and y, it could work, but if your needs are more complex API integration may not be the best way to handle this.

Platform solutions also offer a network of developers – often called an ecosystem – who know how to use the code and API to develop products and services.  This means more customer choice, more ‘apps’ and ‘add-on’ services which are ready configured to ‘plug in’ to your system and give you the service or function that you need.  Blackbaud has a marketplace of options for BBCRM, Salesforce has a whole area called the AppExchange, Dynamics has a fewer options.

RE NXT table - how it compares to other popular options

Look at costs

Of course, cost is a major influencer in non-profit decision making.  The cost model for NXT is to be based on a subscription basis (by number of records for example) rather than number of users.  So if you are an organisation with many users but relatively small database, the NXT pricing model may prove more cost-effective.  The reverse of course could therefore be true, and RE:NXT does rely on Blackbaud hosting.

Take time to think

It’s not always an easy to take a take two steps back and look at the future during all the other things you need to deliver.   If you need help evaluating your options, our independent technology advice service will help you through the steps and lead you to the best solution for your organisation.  We are firmly independent and will offer the best advice for your organisation, not just recommend products and services provided by our partners.

Find out more!

  • Purple Vision are hosting an event on 27th March which will review where we’re at with Raiser’s Edge which will give us the chance to share our views, opportunities and challenges with RE and look at some of the solutions.  We are delighted that Blackbaud Product Manager Azadi Sheridan will be joining us for this event to help us get the facts straight, as well as give us a sneaky-peak at RE NXT.
  • Register today!  Places are limited -please note we welcome delegates from charities and non profits at our events.  If you are a partner, supplier or other commercial entity and would like to come, please drop us a note before registering.
  • Blackbaud resource: If you want to find out more about RE: NXT, Blackbaud have an on-demand webinar which covers some of the key features and functions: https://hello.blackbaud.com/CORP_10611_Accounting_RE_NXT_WSEM_ProductOverview_10-30-14-Registration-LP.html