Blackbaud’s Acquisition of Convio: We Need to Make the Nonprofit CRM Space Bet…

February 8th, 2012  |  Published in Musings

Blackbaud’s Acquisition of Convio: We Need to Make the Nonprofit CRM Space Better

Blackbaud’s January 17, 2012 announcement of its intention to acquire Convio sparked hundreds of phone calls, text messages, emails, and webinars amongst those of us who work in and serve the nonprofit sector. From where I sit – which by the way is in an old desk chair in my home office in Castle Rock, Colorado, surrounded by my dogs, who honestly do not seem to care about the announcement – most of the discussion centers on concerns people have about this transaction. These concerns include:

1. For larger nonprofits, this transaction leaves an unacceptable amount of choice in the CRM market space.

2. Blackbaud might leverage its market position to the detriment of its customers.

3. Uncertainty for new or renewing Convio customers.

4. This transaction will force Blackbaud to roll out yet another version of their business card.

5. Uncertainty over how the transaction will change Blackbaud’s current product roadmap (especially for Convio customers).

6. Blackbaud’s ability to support customers across all Blackbaud platforms.

7. Whether or not the Justice Department will delay or nullify the transaction based on HSR (Hart-Scott-Rodino) or other anti-trust concerns.

After the initial kerfuffle, people began to realize that the only immediate choice was patience. Let the transaction play out, proactively explore alternatives to the current situation, and make prudent decisions when the air is clearer. At least, that is what I recommended and still do recommend.

Woven into all of the analysis of this transaction are press releases by a few law firms expressing their long-held, sincere, and heartfelt concern for Convio stockholders and proposing shareholder lawsuits, because in their humble opinion, Convio’s Board of Directors did not negotiate a fair price for Convio’s stock. At least patent trolls could feel good about themselves for a few days.

Asset management firms have popped up looking for weaknesses in the deal. If only I had taken that one last Finance course in college, I would have a minor in Finance and would be able to fully understand how a deal that collapses could make money for people who had never even heard of Blackbaud or Convio three weeks ago. Still, I don’t doubt that there is money to be made if someone can predict that the deal will fall apart. Unfortunately, it will not be me.

Apparently the Justice Department has started their due diligence and it appears that a fairly large number of people are being interviewed. My level of knowledge of anti-trust law approaches the same percentage of Madonna’s Super Bowl performance that was not lip synced, so I have no opinion on whether there is a real legal issue here or not.

Prior to Blackbaud’s announcement, there were already significant problems in the nonprofit CRM solution space. Incomplete products, unclear product roadmaps, not enough internal resources allocated to projects, unrealistic expectations, and not enough new entrants are just a few examples. I am sure we could hire a consultant (hint), buy some dry erase markers, purchase a whiteboard, and make this list even longer. Even if we developed a comprehensive list, the reality is that Blackbaud’s acquisition of Convio doesn’t change the essence of the problems in the nonprofit CRM solution space; it doesn’t make the problems materially worse and it doesn’t make the problems materially better.

My belief is that the market will solve these problems and ultimately we will end up with more options and more creative approaches. This transaction, more so than the transactions involving Target, GetActive, Kintera, and PIDI, will force the market to react. We have been relying too much on the technology providers in the market space to solve our CRM problems. That is no longer an option. The technology providers are part of the solution, but they are not the solution.

Yes, solving the problems in the market space will take time – measured in years – but progress can be made in the interim. If you are reading this, you are part of the market space and this deal must force all of us to be more creative in approaching the CRM problems and opportunities in the nonprofit sector.

The nonprofit sector has not been as successful as the commercial sector in realizing the benefits of CRM. We need crisper strategies, more focused options, better integration strategies, effective use of business intelligence, better implementation methodologies, less focus on pure technology, more focus on measuring results, and probably several things we have not thought of yet.

If we are honest with ourselves and look across the landscape, we find that it is littered with nonprofit CRM initiatives that have failed to meet expectations. This transaction will force us to look at the nonprofit CRM opportunities through different lenses, which will highlight clearer and more realistic paths to success with both existing solution providers and new ones.

My dog Pax just came into my office carrying a tennis ball. There is two feet of snow outside and nothing is more relaxing than watching a Boxer bounce through the snow. To be continued…


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