Whether you are a career association executive or new to the association world, you have probably seen a lot of debate on whether you should be using a customer relationship management (CRM) system or a traditional association management system (AMS). In this article, we will provide you with a clear overview of the differences between these offerings and hopefully give you enough information so that you can make a more informed decision for your organization when the time is right.
Before we get started, we need to first make sure we have defined all of the relevant terms. For the purposes of this article we will use the following definitions:
Association: An association is a group of people organized for a joint purpose or common cause. In the U.S., associations typically perform these functions: Membership, lobbying, donations, developing and enforcing standards of training and ethics within their profession (providing certification and educational opportunities), providing a community and networking opportunities including meetings and conferences.
Association Management System (AMS): Software designed to run an association by providing functionality for collecting dues, class registration, meeting registration, donations, subscriptions, committees, etc. These systems also typically include some level of accounting/bookkeeping functionality. Some examples include WildApricot, Personify, MemberClicks, Aptify, iMis and netFORUM.
Customer Relationship Management System (CRM): Software designed to manage customer relationships by primarily providing functionality for salesforce automation, customer service, and marketing. These systems also provide a platform for building additional lines of business functions including all of those typically done by an AMS system. Some examples include Microsoft Dynamics CRM, Salesforce, SugarCRM and Siebel.
Why Associations Need a CRM or AMS System
In order to best serve its constituents, an association needs to gather as much data as they can about everyone they work with, inside and outside of the industry, that may have an impact. This data provides insights about who they are serving and what their needs are. It is important for associations to continually define and redefine their focus around the joint purpose or common cause for which the association was formed. This is especially true as the pace of change in our society has increased so significantly over the past 25 years with new industries, tools and technologies impacting all areas of our daily lives.
The Key Differences between an AMS and a CRM System
If both AMS and CRM systems are built to store data, the key difference between the two is purpose/focus of the system.
Traditionally, the primary focus of an AMS is to store data for the purpose of running the association and performing the day-to-day functions of the organization. For example, if the primary functions of your association are membership and conferences, you want a system that is designed to efficiently manage the processes associated with membership applications and dues renewals as well as conference setup and registrations.
A CRM system is also used to store data, but the purpose of these systems is different. A CRM system is designed to create better customer relationships, which in turn help to grow your organization. Statistics have shown that a 5% increase in customer (member) retention can increase a company’s profitability by 75% and that 80% of your company’s future revenue will come from just 20% of your existing customers. In our example above where the focus is on membership and conferences, a CRM system would allow you to gather and analyze data related to your members and conference attendees so you can better serve or market to them in the future.
How a CRM system creates better customer relationships is by implementing the CRM Cycle which has 3 steps: Collect, Report, and Change.
Most traditional AMS systems handle data collection and include basic reporting capabilities that are typically built around operational needs (e.g. conference registration attendee lists, badges, meal preferences, etc.). Step 2 in the CRM Cycle necessitates the ability to efficiently find and analyze the customer/constituent data that you have spent valuable staff time collecting. This is why CRM systems have robust search, business intelligence and analytic functions built into them.
These search and export functions take many different forms based on a user’s skills, preference, function, and role at the organization. For example, Microsoft Dynamics CRM (MSCRM) includes basic search functions and views into your data to meet basic data needs, but it also includes the ability to easily construct more complex queries that can be exported to Excel for further analysis. MSCRM also includes the ability to create robust dashboards for quick insights.
Cobalt Membership Dynamics Membership Dashboard
This leads into the final stage of the CRM Cycle: Change. Now that you’ve collected and analyzed the data, it’s time to take action. This action can take many forms. If the data tells you that certain programs are more popular or profitable than others, you might shift resources to increase the reach of the more successful offerings. Maybe your data indicates that members in a certain geographic area are more engaged than others, prompting you to consider this when choosing the location of your next annual meeting. In this way you begin seeing the true power of the data you’ve collected.
Which one is a better fit?
This is a tricky question and it really depends on the needs and capabilities of your organization. If you want a more in-depth analysis of this, please read our AMS vs CRM for Associations: Which is Best? post. For the organizations that we talk to (staff of 10 to 250) the ability for a CRM system to knock Step 2 out of the park when compared to most AMS systems is the key differentiator. You can collect the data with both systems but you cannot get to Step 3 without being able to analyze your data. This is the reason we believe that CRM systems can be a better fit for associations and it’s the reason we built our AMS – Membership Dynamics on the Microsoft Dynamics CRM platform.