At the supermarket I get the best result by solving a fairly simple equation (based on the concept of price ≠ value) with these factors:

·      Cost per weight (ounce/ gram)

·      Perceived quality (branding or visible attributes)

·      Desirability

·      Utility to the task

For example: You are picking up ingredients for a dinner party where the CEO is the key guest. The canned Tuna is on special at £4/lb. but would your career prospects be better “served” (ahem!) by fresh salmon at £15/lb.? On the other hand should Tuesday’s lunch sandwich for your 5yr old be hand-caught fresh grilled Alaska Sockeye salmon when she loves peanut butter?

In our everyday lives we typically (often unconsciously) evaluate these factors to come up with the perceived best value. By value I mean the result that provides the maximum utility (it does the job required, comes from a reliable supplier, at the best price).  You want to provide a nutritious lunch (that your child will actually eat instead of trade with schoolmates) that fits the budget.

So why is it that many organizations forget that price ≠ value and give more weight to flashy presentation over substance when selecting CRM / management software?

Back in the day we were being evaluated against another software platform (no names but they were the buzzword of the day, had their own “network” and were the “not-for-profit” alternative (with some of the highest pricing)). Our system met or exceeded every functionality requirement, was a proven system running on an everyday operating platform that was simple to operate (no Certified Data Base Administrator (CDBA) required) and had enhanced CRM, fund development, and marketing tools that would increase their sales in a crowded environment.

Over the length of the contract the client would have to increase their annual revenue by 10+% net just to pay for the competing system (salaries for additional staff (the CDBA), higher purchase price system, 4x equipment cost, etc.). Note I said net – they would have to increase their gross sales by a much larger percentage just to pay for the system before adding one dollar to net revenue. If they selected the competitor they were giving up the equivalent of two full time staff members or an outreach performance each week in local schools or 4 fully staged new productions.

Our system cost less p.a. in support/maintenance than their current system and would actually increase their bottom line revenue at their same annual ticket sales rate. (NB: we’d have increased net revenue before the anticipated increase in sales from improved marketing tools.)

And yet…..

In spite of the obvious financial and operational benefits the client went with the other system.  Why? “That’s the system selected by “X” so it must be the best” (that is a real comment BTW).

Why do otherwise rational executives, with an understanding of fiduciary responsibility, make choices for their critical systems based on “that’s a great color” rather than the bottom line numbers?  Emotion and the desire to be seen as the same as the “big fish” in the business seem to play a part.

• When evaluating systems you should remember it’s not a popularity contest nor is it about whether a given company is a “not-for-profit just like us”, nor what some big name company uses and price ≠ value.

The key metrics should be:

·     Financial value – do you get what you pay for

·      Fiduciary responsibility- would your decision look good on the NY Times front page expose?

·      Performance – does the vendor perform? Does the product do what you need? Is it reliable? (If you hear “their customer service is great – I use it all the time” does that actually mean the system has a lot of problems?)

·      Realistic expectations of what impact any system can actually have on your operations. No software system can make people come to your events or give you more money.

At PatronBase we pride ourselves on giving you “tools you’ll actually use” at a competitive price. You can run your entire operation (ticketing, marketing, fund development, inventory, venue scheduling (and coming soon – staff scheduling) out of one system. It’s a most cost effective solution to the business aspect of your operations.

Understanding The Difference Between Price And Value