Association Management Software
Small Business BuyerView | 2014
Every year, Software Advice speaks with hundreds of associations looking for the right management software—giving us unparalleled insight into the needs of today’s software buyers.
We recently analyzed a random sample of these interactions with buyers from small businesses (nonprofit associations with annual revenues of $100 million or less), to uncover their most common pain points and reasons for purchasing new software. We also spoke to Kim Robinson, certified association executive and president of Frontline Association Management, for additional insights into the trends we uncovered.
Fifty percent of buyers sampled were using manual methods—typically Excel spreadsheets, but also paper notebooks in some cases—to keep their membership and financial data organized. Robinson says she’s surprised by this high statistic.
“The bottom line is: You can either spend your resources on operations, manually recording every customer interaction, or you can [invest in] technology to free up some of those resources, and spend time on projects that will advance your organization and deliver more value to members,” she says.
Our analysis also found that 17 percent of buyers used commercial software specifically developed to handle association processes, and an additional 17 percent used a combination of manual methods and software. In cases where buyers used a combination of methods, many associations had accounting software in place to track financial data, then relied on spreadsheets to maintain member records.
Furthermore, 12 percent of our sample used accounting software, with no other method for handling additional business processes; 2 percent used general-purpose software that wasn’t built specifically for association management; and 1 percent employed a custom-developed system that was built to their organization’s specifications.
Because half of small buyers were using manual methods to track important data, it’s understandable that a large number—39 percent—also said that their top motivation for purchasing new software was to keep their data organized and accurate.
This finding is further supported by a 2014 association communications benchmark survey, in which 70 percent of respondents said that combating “information overload” was their top challenge.
One buyer told us that their association needed to dramatically improve its communications with members, and therefore needed to move from its outdated database to a modern system that gave a more complete view of the association’s members.
Another said that important member “details [were] falling through the cracks,” so the association was looking for a constituent relationship management (CRM) system to maintain more accurate records.
Other top reasons that compelled buyers to find new software included the need for more robust features (15 percent) and a desire to consolidate data from disparate systems (13 percent). For 7 percent of buyers, growth of the association—which resulted in a larger amount of data and greater complexity of processes—was the primary motivator.
Twenty-two percent of buyers specifically requested that the software products they evaluated be able to automate the process of tracking and renewing membership dues. Significant amounts of time are spent keeping that data organized. When 20 members turns into 200 members, it’s easy to overlook records and forget to send renewal reminders on time—which can result in uncollected dues and missed member-engagement opportunities.
It’s also worth noting that online features—member portals, fundraising and event registration, in particular—were specifically requested by just over 5 percent of prospective buyers.
These types of features support the self-management of data by members, thereby relieving much of the burden of data entry from the association managers themselves. That buyers are actively seeking software with member self-management features indicates that managers are pursuing innovative ways to engage with and deliver services to members, while reducing the time required to accomplish those same tasks manually.
Seventy-four percent of association software buyers requested a fundraising and donor management application, followed by membership management (33 percent) and event planning (23 percent).
This finding is unexpected, but makes sense in context. Over the past decade, associations have been experimenting with revenue-generating activities beyond the traditional membership-dues model.
NTEN is an association that has successfully managed to supplement annual revenue through fundraising. In one campaign, members and non-members who made a donation to a scholarship fund received a vote to choose what kind of video NTEN created and presented at its conference. Using an online fundraising tool and outreach through social media, NTEN raised about $10,000 for the scholarship every year from 2010 through 2012.
Furthermore, 56 percent of buyers preferred to evaluate an “integrated suite” of software—which is a package of software from a single vendor that includes multiple applications—compared to 44 percent who requested “best-of-breed” products (standalone applications that perform one or two core functions very well).
Buyers who requested integrated suites favored systems capable of handling fundraising management (80 percent), membership management (55 percent), event planning (40 percent) and marketing outreach (35 percent) all in one place.
At the same time, best-of-breed buyers were most interested in products to handle fundraising and fund accounting, though to a lesser extent than those buyers who preferred integrated-suite products (64 percent and 25 percent, respectively).
All buyers in our sample represented small associations (those with $100 million or less in annual revenue), but none of the buyers in our sample had annual revenues beyond $50 million. Moreover, a majority—76 percent—represented very small associations that reported less than $1 million in annual revenue.
Additionally, most buyers in our sample—a combined 62 percent—reported that their associations had five or fewer employees.
Advanced Solutions International recently identified two critical trends impacting membership associations: 41 percent of associations have stagnant or declining membership levels, and 40 percent have stagnant or declining member engagement levels.
The fact that top-requested features included online-based member portals, online fundraising and event registration and messaging-related capabilities (e.g., list segmentation and labeling) shows that association managers are actively looking for ways to increase membership engagement and retention.
Despite the potential benefits of association management software, there are still barriers to adopting these systems. Robinson says that many association managers simply lack an awareness of available options. Therefore, they don’t understand how using the right software can solve problems, improve operations and help members.
“Finances are also a barrier,” says Robinson, “but even the smallest association can access association management software on some level.” Indeed, many software vendors today offer affordable, subscription-based pricing (some for as low as $50 per month)—making applications that previously required a large upfront investment affordable for more buyers.
We predict that as associations shift away from manual methods and learn to use more sophisticated systems to provide more value to their members, engagement, recruitment and retention will increase.
Software Advice regularly speaks with organizations that contact us seeking new association management software. To create this report, we isolated a random sample of 282 interactions with small buyers (those from organizations with annual revenues of $100 million or less) from 2013 and 2014 to analyze. It should be noted that these findings exclusively represent those buyers who contacted Software Advice for guidance on software selection; they may not be indicative of the market as a whole.
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