In a Bain & Co. study 20% 0f 451 senior executives polled said the their CRM (customer relationship management) initiatives had failed to deliver profitable growth and had damaged customer relationships
Do You Really Know What to Do with Your Customer Data? by Jean Ayers in the Harvard Management Update 2003
Shift gears now to the nonprofit sector. If this study were done with nonprofit executives in 2008, the results would be the same. Nonprofit executives polled about their Convios or Raiser's Edges would tell you that they are not working out as planned and certainly have not returned on investment. I've yet to see any definitive, statistically rigorous data pointing in one direction or the other. This is probably because people are afraid of what they will find and ignorance, we all know, is bliss.
Nevertheless, marketing experts warn against the problems associated with having one large data repository, which is what Convio and Blackbaud tout.
The danger is that the nonprofit director is presented with an "average donor profile" and is not given a more in-depth picture about individual donors and how and why they act. This average donor profile may not even fit a single donor in the database, yet an org may base its strategic decisions on the aggregated data point. They will try to build a relationship with this fictional average that does not exist.
In fact, it may be better to forget about integrating data. GASP! Separate data sets may give you a more well-rounded, holistic picture of your donors. And if orgs look at their data in a broader context, meaning - how does the info we glean from our data sets fit into our donor knowledge management objectives - then orgs would get a more accurate picture of their donors AND spend less time with imports, exports and other data- corrupting practices.
Fortune 500 companies have long since abandoned the idea that a single, monolithic CRM system is the answer to their marketing challenges. They have diversified their approaches to get a more customer-centric view of their patrons. I think it's time that nonprofits followed suit.
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