CRM & ROI? There is no RETURN…CRM doesn’t raise $, people do!


As you enter the initial phases of getting your CRM project investment funded by senior management and your board, a dialogue that will inevitably come up is “what is the ROI?” Wouldn’t it be nice to purloin from those MasterCard ads – priceless – and be done with it? This is the final in a 3-part series, “A complete CRM vision” – designed to help you plan your CRM.

In July and August respectively, I covered “From beginning-to-end staffing models” and “Don’t adopt a CRM” also important to consider during planning.

But today’s topic is ROI.

Last year at Dreamforce, a speaker told us about a hotel chain that needed to upgrade its rooms. Gist of it: rooms need new carpets, new plumbing, new beds and so on. If only it were free. A management big wig asked about the ROI and the group proposing the renovation simply said what’s the cost of NOT doing the renovation? Simple: the room price declines, hotel chain’s reputation declines, business travelers switch to hotels with nicer rooms and ultimately it impacts the bottom line. The renovation was approved.

I’m sure it wasn’t this easy; that there were forecasts and charts to demonstrate what would happen if the renovation was not approved.

I call it a reverse ROI.

CRM and its ROI is not the right conversation. Why?

  1. A CRM doesn’t raise $, people raise $.
  2. In order for people to effectively and efficiently raise money in today’s (and tomorrow’s) world, we need to provide them tools that quickly segment, facilitate stewardship, enable forecasting and encourage collaboration. This is the start of a CRM usage conversation (but not ROI).

To secure funding for your CRM project, create two scenarios. Something like this:

  1. No investment / no growth scenario. If you are currently growing your revenue by 4% annually, create a chart that shows a slight decline in your growth rate for the next 5 years and overlay your expenses as if you made no additional investment. The fact is even without additional investments your expenses are currently growing (rent, salaries, cost of doing business – all increases). Your CFO can help you with this. You’ll see the gap between fundraising and expenses narrow resulting in less funds for your mission.
  2. Investment / growth scenario. Create an investment plan that ties fundraising initiatives to growth. This forces your Development team to talk about CRM and how they will use it. If you invest in 4 new major gift officers at $1M, then we will yield $10M in five years. And naturally we expect their account plans to be in CRM. In your investment plan, CRM is of course mentioned as an investment but no specific ROI is tied to it.

You can’t talk about CRM ROI by itself. Like Lotus Notes or Microsoft Office, a CRM is tool – it’s essentially the cost of doing business.

People and their initiatives raise $ and provide the “return” part of the “return on investment” dialogue. You can’t play tennis without a racquet but the racquet itself doesn’t win points, the person holding racquet wins the points.

Lisa Fay Wellek

About Lisa Fay Wellek

Lisa Fay Wellek has worked in the nonprofit sector for 20 years with focus on integrating CRM with fundraising. She is the owner of Philanthropy361 LLC, which consults with non-profits about how to best implement and strategically use CRM. She is a frequent project member with build Consulting. She was with JDRF (Juvenile Diabetes Research Foundation) for 10 years in various roles including Chief of Staff for Development and most recently, National Director of CRM Strategy. With Lisa Fay’s leadership, JDRF launched LuminateCRM - a Blackbaud product that uses as its development platform. She believes that in today’s fast paced tech-focused world, non-profits must invest in the right infrastructure and staff in order to be sustainable (let alone grow). Previous posts include: Stevens Institute of Technology, KPMG Consulting and University of Connecticut Foundation.

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