Organizations across all industries are investing millions of dollars in CRM initiatives. The trend is also present within the nonprofit industry. Whether an investment in a system conversion or upgrade, organization leaders and stakeholders are trying to identify ways to maximize and track their return on investment (ROI).

ROI for CRMs can be challenging to analyze as true benefits can be indirect and often span over a long period of time. Traditional cost analysis models do not always work for nonprofit CRM initiatives, but it is possible to track ROI! Through this four-part series, we will explore measuring success, data collection, fundraising, and actions that can be used to maximize the organization's ROI for CRM initiatives. In this post, part 1, we will talk about Measuring Success.

Measuring Success

To measure the success of a CRM project, it is important to establish a set of agreed upon success criteria, including specifics around ROI objectives and goals. Once the objectives and goals are determined, the metrics and criteria for measurement can be planned and a balanced scorecard established.

The metrics determine the needs for data elements and reporting requirements. It is equally important to use planned metrics to establish a baseline as data elements from the legacy system may be needed for analysis.

Creating specific, measurable, success criteria is key to successful ROI analysis. There is a difference between "good" success criteria and "bad" success criteria. "Bad" success criteria are general goals or objectives that don't define an expected result or provide something that can be measured and evaluated. For example:

"Bad" Success Criteria

• Focus on higher returns and lower investment

• Grow key programs and utilize under developed resources

• Focus on donor retention

"Good" Success Criteria

• Focus on higher returns and lower investment by developing additional data segmentation and through more targeted prospect acquisition.

• Grow key programs and utilize under developed resources by using BI tools to analyze giving trends for constituencies like corporate donors, workplace donors and foundations.

• Focus on donor retention by improving communication and honoring donor preferences for online vs offline communications.

The "bad" criteria above are very general and would be hard to evaluate during or after a project. But far too often these are the types of goals and objectives we see. By focusing the criteria, like we see in the "good" examples, you provide yourself with specific, measurable goals. For example, if you break down the "Grow key programs and utilize under developed resources by using BI tools to analyze giving trends for constituencies like corporate donors, workplace donors and foundations" objective, you can identify reports that will be used to analyze giving trends, create the reports throughout the project, measure the use of the reports after going live and finally, after a period of time, begin to analyze your results.

ROI for CRM is a Continuous Effort

Maximizing the ROI for a CRM project is a continuous effort. The effort of data collection, data entry, database health and maintenance is an ongoing commitment. Although there should be ROI from increased efficiency and productivity, the true “bang for the buck” is to maximize fundraising activities and marketing efforts with higher quality, more robust data for data mining and business intelligence uses.

As CRM is used for analysis and new strategies are planned and initiated, the process will change and evolve. CRM should continuously be used to collect data, data analysis, formulate new plans/strategies, develop metrics to track the success of those plans/strategies, and collect additional data to support those metrics.

Use CRM data for analysis, formulate plans, and take action.

Organizations that fully utilize their CRM and data maximize their ROI. Far too often organizations get distracted and interrupt or pause the cycle. In the beginning the organization is trying to survive conversion trauma. Once the organization’s feet are on the ground, they are managing the learning curve. Once those hurdles are overcome, the organization may pause to take a breath and before they know it a new status quo has been established. Avoid the status quo.

Organizations should use CRM to challenge the status quo and focus on continuous improvement. Incremental improvement over time, and any breakthrough improvements all contribute to the ROI.

In our next post, we will focus on maximizing ROI through CRM data collection.

Please stay tuned to the BrightVine Solutions’ blog for more tips and information.