18 months ago, I gave a talk at a Memberwise breakfast seminar which was focused on CRM transformation programs for membership organisations. A hot topic for most membership bodies/institutes looking to update or change their CRM system was to support their strategic objectives. (Or in some cases because the IT department requested it – but I will leave that for another time).
I made a prediction during this talk that we can expect to see the market change considerably over the next 2-3 years, and now we are seeing that come to fruition.
During my talk, I discussed how the CRM provider market for membership organisations was oversubscribed and at the time of talking was around 41. All offering some type of productised solution for the sector, none, in my opinion, providing the finished article!
Is That About to Change?
The challenge this brings is that many of them find it difficult to scale to a reasonable size, big enough, that they can continue to invest sufficiently in R&D as well as product development to meet the real demand. Coupled with the fact that the CRM should be at the centre of the organisation and tightly integrated into Web/Finance/Events/CPD as well as others in the minimum requirements, the expectations for a decent and solid CRM are higher than ever.
Now I work in several industry sectors, and one thing is for sure that membership has the highest concentration of dedicated CRM product providers than any other sector I consult in.
In the last 6 months, some of the major well-known providers have been acquired by a PE partnership called Clear Course (https://www.clearcoursellp.com/our-companies). This includes APT, Miller Tech, SilverBear & the latest, Trillium.
Their acquisitions haven’t stopped at CRM providers. Joining the partnership also includes web providers and solution providers which leads to many intriguing questions for me.
One of the reasons I predicted the change is the challenge of market share against overcrowding and the inability to develop a good enough product. I still come across many membership organisations that have designed their own version of a CRM and moved far away from a standard product which, currently, is just unnecessary. A good rule of thumb is 90-95% of required functionality should come ‘out of the box’ where the remainder will be bespoke development for the specific client.
Many of the CRM providers within the market have revenues below £5m. Whist that provides a nice cushion of comfort for clients within the membership sector that they aren’t dealing with a huge software outfit that will soon forget about them (industry perspective), it does hinder product development and, of course, longevity. When you operate a technology company these two are key – remaining relevant is paramount to success.
On one side, we have some providers with a great product but are stumped by investment needed to continue. On the other we have some larger, legacy providers, that simply cannot get a good enough product off the ground and are losing customers, but more importantly credibility within the market, due to the way they operate.
With the incredible change in technology, together with things such as RPA (Robotic Process Automation), AI (Artificial Intelligence), ML (Machine Learning) and Data Analytics coming into the conversation alongside the obligations around Cybersecurity – the investment, time and energy to keep on top of this is unbelievable and there is no guarantee of a speedy return on investment.
This for me is the main reason why the change is good, and these acquisitions come at an exciting time for not only the providers but, most importantly, the clients.
Of course, the full plans of these acquisitions aren’t quite known yet apart from the standard position of ’nothing changes’. But in my experience I wouldn’t hold my breath on this for long. No doubt we will start seeing a tighter integration between the organisations which also means access to a bigger talent pool, product development and of course the managed service and support we all crave.
So, what does this future look like? Are we looking at another Advanced Computer software to dominate the market? If there is one lesson I hope history teaches us is that product integration, single vision and sharing of IP is going to be key for all to succeed from this if this is the route – time will tell. If done correctly, it would be great to see a product that delivers a great subscription model platform that leverages the IP from each of these credible and different acquisitions whilst continuing to innovate and deliver exceptional functionality to support key strategic objectives of membership organisations– no small task I may add!
Can we finally start to see technology I recognise as standard in other sectors coming into play? Things like RPA, ML and AI which the membership sector can see as too ‘futuristic’ coming to the forefront and now really supporting membership organisations deliver value back to their end consumer – I do hope so.
Most people’s natural response is to worry about the acquisition, mainly because people don’t like forced change. However, I believe this is an exciting time and, if anything, I would urge people not to slow down plans on any changes. Have an open conversation and be clear on the objectives that you want your future provider to deliver for you – don’t rush though!
One thing is for certain, I can’t see the acquisition plans slowing down. So include this as part of your due diligence to ensure you know your options and do your homework properly.
If you would like access to our CRM guides and be added to our free CRM implementation events where you can hear from other membership organisations who have already gone through this project, please drop me a line on LinkedIn by clicking the image below.