The New Captain at Sage’s Helm

I sometimes forget about the fact that people are trying to do business and that their business is top of mind — not CRM. That point was brought home to me last week when I was on-site with a client.

I won’t give too many details, but the company has no CRM per se, just some spreadsheets they use for forecasting, a customer database shared with ERP (enterprise resource planning) and a few other databases written in a PC programming tool. The company is growing like a weed, and though CRM once looked out of sight for them, it now looks like a necessity.

The users told me how their business processes worked and all the manual effort required for doing things that CRM addressed a long time ago. There’s no doubt that the users would be more productive if they had sales force automation, analytics, marketing automation and more. The company could get closer to its customers and perhaps even shave some positions or at least reassign people to more rewarding jobs.

The Adoption Curve

The amazing thing to me is that despite all this, the company is making a fair amount of money — so much so that they will not be categorized in the small- to medium-sized business space forever. So, that’s all good, and it got me thinking about some things. First, it’s inevitable that this company will implement some CRM applications in the not too distant future, if for no other reason than because their competition is doing the same thing. Having CRM when your competition does not is like going to the proverbial knife fight with a gun, so no one wants to be the last adopter.

The second thing it made me think about is the importance of the adoption curve. We’ve been focused on every new nuance of our technology and early adopters for a long time, and for good reasons. Early uptake is fun to watch — there’s a bit of risk inherent in it because we don’t know if it will actually work. Early adopters keep us interested in the hunt. What happens after the early adopters have their fun is worth pondering, too.

Insights on Insights

Some of that thinking came with me to Insights, the Sage Software partner meeting being held this week in suburban Washington, D.C. Sage has taken a few shots in the last year from a variety of sources for the performance of its stock, and the company recently brought in a new CEO, Sue Swenson.

Swenson is from the telco space and is very smart. It is also important to note that she is not a software person, but she has great instincts; I would even say CRM instincts. To her credit, Swenson has not done anything rash. She has refused to make change for the sake of change and instead has embarked on a long-term outreach effort. Her schedule has been full of travel to meet Sage people and, importantly, to listen to what they can teach her about the company, its products and customers.

In my mind, Swenson is just doing what any CRM-oriented person ought to do, and what’s interesting is that she said it was a habit she first got in wireless. At T-Mobile, the executive team she was part of made a religion out of traveling and visiting with the troops on a quarterly basis. The purpose was to listen, not preach, and then to come back to the office and analyze the data before instituting any improvements. That’s what she’s doing at Sage, and one can hope it will have a positive effect on Sage and Sage’s customers.

Late Adopters

I expect that Swenson will discover a few things about her company and its people in her travels. One thing that should bubble right to the top is that Sage and its customers are a different group — not good or bad but really different. Sage has made a science out of selling accounting and front-office products to small and emerging enterprises — the kinds of companies we might also call “later adopters.”

To be sure, all of Sage’s customers are not late adopters, but many are. Late adopters, like my client mentioned above, are used to doing things without a great deal of automation support, and it sometimes takes a while for an innovation to get to them. There are many reasons for this, including cost, experience and risk.

Small companies have small budgets and don’t buy early in a cycle when technology is expensive and unproven. They wait until technology becomes a whole solution at a lower price point with lower risk. Sage has traditionally relied on a strong partner program to gather up the knowledge and experience needed to deliver automation that works for these customers. Lots of vendors see the opportunity inherent in the late adopter market, but many seem to miss the optimal packaging. If their products meet the right price point, they may be too complex, or if they are easy to use, maybe they are under powered or there’s no one to provide service.

Big Balancing Action

At Insights this week, we were all introduced to a number of new initiatives, including integration and interoperability strategies and streamlined partner programs. I would bet that virtually all of this was in the works prior to Swenson’s arrival, but I also believe that it would not have gone forward if she had not approved the general direction. After several years in which Sage introduced only cautious changes in its products and its business, this appears to be a year when they are stepping out, and Swenson appears to have arrived at a good time.

Swenson has embarked on a big balancing act, trying to improve Sage without breaking anything. It’s a tough job, but her first moves are on target, and they are being deftly executed. I look forward to her keynote next year when she can tell us how it’s all working out.

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is working on a book and can be reached at [email protected].

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