Pascal Houillon

The Sage Brand – Will it become a household name in NA?

Sage North America is taking its brand very seriously these days. In Europe, Sage is a household name, but when Pascal Houillon arrived in the United States from Paris, he found himself in a very different situation. Mr Houillon recently took over as President and CEO of Sage North America when Sue Swenson retired. Sage Software is a $2.24 billion global company. Sage North America boasted revenues in 2010 of $857.8 million, supporting more than 3.2 million customers in the U.S. and Canada with ERP and CRM and other business applications that support accounting, payment processing, human resources, and the specialized needs of the healthcare, nonprofit, manufacturing, and construction and real estate industries, among others.  Other numbers behind the scenes are equally impressive:

  • Revenues for the first half of 2011 were $1.18 billion globally and $430.7 million in North America
  • More than 40,000 customer calls are managed daily
  • More than 27,000 Value Added Reseller (VAR) business partners worldwide; 5,000 VARs in North America
  • 20,000 members of Sage Accountants’ Network in North America
  • 13,600 employees worldwide; 4,000 employees in North America
  • Over 4,000 attendees at its Sage Summit 2011 customer and partner conference (underway in Washington D.C.  as we speak)

In spite of this, and partly because many of these customers are very small businesses, Sage continues to fly under the radar of many. Based on the premise that a weak brand limits growth for both Sage North America and its partners, Mr Houillon and his management team are on a mission to change that.

In addition to serving a very small end of the market with products such as Simply Accounting and ACT! this lack of awareness  stems in part from Sage having grown largely through acquisition and having preserved many of the brands along the way: ACCPAC, MAS, Adonix and X3, SalesLogix, Simply Accounting, Peachtree, ACT!, ABAS, etc., etc.  Some of these have (and still do) have better name recognition than the Sage brand.  While keeping those brands alive was likely a smart decision at the time, now in order to strengthen the Sage name, the Sage management team has decided to eliminate them. Yes, all of them. While currently products are grouped and managed internally by software category (e.g. ERP and CRM), each with multiple brands and product lines, the thought moving forward is to simply group them by target of company size.

While nothing is yet cast in stone, there will likely be a Sage 50 targeting the very smallest companies, Sage 100 coming up market, Sage 200 even further up… You get the idea. Under Sage 50, there might be accounting solutions, as well as contact management and other categories of solutions. Similarly, there will be products in the Sage 100 line that will satisfy different market needs (ERP, CRM, Human Resources, etc.)  While the concept is simple enough, execution will be far from simple, since there are multiple products in the same category targeting similar size companies. Most specifically on the ERP side of the house, company size is not the only qualifier that determines which solution is offered.

For example, Sage Accpac targets small to lower midmarket multinational businesses in several specific but quite diverse verticals: Finance, Service, Mining and Hospitality. Without the underlying base of MRP it is not really a fit for manufacturers, but Sage has other products that target manufacturing (Sage X3 and Sage MAS). Sage also distinguishes between “global” and “multi-national”. While Sage Accpac can deal with multi-currency and multi-language environments, it is assumed each legal entity in each country will run its own instance of the software, rather than running a global centralized, single instance. X3 is a better fit for the latter. Therefore, because the decision is not always based on company size, there will be some overlap and perhaps some hard decisions as to where to “put” some of the products or how many different Sage NNN product lines are created.

And once these product lines have been created, what will Sage call the different sets of code that fall under each umbrella product? Will they be products, options, flavors, categories? Or will another name (i.e. brand) creep back in? To some these might seem like small, inconsequential issues. But when branding is the goal, they are far from insignificant. For customers that bought Accpac or ACT! 15 years ago, it will be quite hard to get those customers to call those products anything but what they have always called them. One might ask if that really matters. After all, they already bought the product. But the answer is a resounding, “Yes!” Brand equity also translates to brand loyalty and brand awareness. And if the existing customers are loyal to the product, with no loyalty to the company that now owns it, the brand is diminished.

But the existing customers will make the transition if they perceive that they are actually getting something “different”, and “different” usually means “more.” So far there has been no talk from Sage North America that any of these products are going away, no talk of rationalization or consolidation. So if the products continue, just with a new name, Sage will need to find a different way of adding enough value to justify the shift in thinking to a new brand.

Some of Sage’s “Connected Services” may be just the ticket for this.   Connected Services are online, web- or mobile-based services, integrated with a Sage product and designed to solve specific business issues for Sage customers. In some instances, they are provided at no charge, in others, they can be purchased on a subscription basis or included with a Sage Business Care Plan. Sage groups these into various categories as follows:

  • Employer Services: learning management service, performance management service, recruiting service
  • Financial Services: payments service, credit checking service, billing service
  • Operations Services: payroll service, direct deposit service, tax service, compliance service
  • Sales and Marketing Services: E-marketing service, business information, business intelligence services
  • Vertical Services: Healthcare patient and physician services, construction project management services, fundraising and grant management services

There is a distinct advantage to offering these as separate services. By creating these as add-on, external components, Sage can develop them once and make them available to all product lines, rather than having to develop employer or financial (or other) services for each of its separate products. Combining the original product offering with a host of services such as these, Sage  may just be able to get its existing customers to make the paradigm shift from being Accpac, Adonix, ACT!, SalesLogix (etc., etc.) customers to being Sage customers.  And then they will be well on their way to being a real “name” in North America.

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