Washington – Sue Swenson, the new CEO of Sage Software, may have said it best in her keynote address. She said that before being asked to interview at Sage Swenson did not know who the company was and what it did.
This is the same dilemma Laurie Schultz, the Canadian GM of Sage, faces in Canada. The Canadian market has been very loyal to some of Sage’s products such as Simply Accounting and Accpac. But, Sage offers a lot more products then just those two.
Meanwhile, U.S. customers know very little about Accpac and virtually nothing about Simply Accounting, which has about 85 per cent marketshare in its category in Canada.
One of the problems has been the slew of acquisitions Sage has gone through in the last seven years.
This company was once known in Canada as Accpac, then Best and now Sage. That is a lot for a market to handle in just a few short years.
CDN Now sat down with Schultz at the Sage Insights 08 conference this week to discuss her marketing and channel plans for the Canadian operation.
CDN Now: How are you making the Sage name more prominent in Canada?
Laurie Schultz: Sage Accpac is almost a master/slave and we lead with it. The equity we have in the product helps us tag Sage onto that. It is no secret we will need a few more years to build that up and will make it part of our advertising. Now in the U.S. Accpac has low brand equity.
CDN Now: How are you growing the partner base in Canada?
L.S.: The channel is in consolidation mode and we have not done enough in growing the channel out quite frankly. What I am hearing is we have a capacity challenge and they are running on fumes. They are doing a lot of hard work, but can they do the strategic work? Channel capacity is a top five priority at Sage and we need to re-invest in education. For example, there are 5,000 schools that have Simply Accounting and only 300 schools that have Accpac. Developing and selling accounting solutions is at capacity, but there is not a shortage of opportunities in the market place. It is a supply side problem.
CDN Now: Treating all partners differently. This channel concept happens at many other vendors. However, one Sage partner told me that they do not understand what to make of it. Is there a marketing message that still needs to be done with this new channel approach?
L.S.: Yes! I love the approach and if you look at Toronto there is a large concentration of Accpac and we have Microsoft as a competitor. It is important that strong partners have one-to-one and in some cases two-to-one relationships inside Sage Canada. And, at the same time have a high caliber Sage person help them grow the business and not be an order taker. If you go down a few layers you have to take the remaining partners and put them on a grid and assess them on how they want to grow. There will be those who do not want to grow and others who have potential to grow. We will work with them and I think that is where we want to spend our time. A lot of them are more Mom and Pa shops and they are passionate and personal about what they do. I do not want to underestimate the power of that channel either because it is very grass roots.
CDN Now: How are you working out the partner advocacy inside Sage Canada?
L.S.:A partner advocate should be customized for the partner and it will not be about the country they live in. There should be 30 individual and personal partner advocates and there will be no template approach. Canada is different. The people are different. Some Canadian partners sell globally such as CA Plus.
CDN Now: One of the points this solution provider made was that while bigger partners sell more software; some times smaller more strategic partners are able to add more innovation and bring other things to the table that are valuable. Have you taken this into account in this new approach to your channel?
L.S.: Once we got our big guys covered will spend time on the gap down there. We have hired a new sales vice-president for that named David Lahey.
CDN Now: How are you growing margins for Sage partners in Canada?
L.S.: With the new partner advocate approach and if we go down a level with our Regional account managers there will be a high caliber Sage sales person with partners. I want them to be a more integral part of the sale than just taking orders. They need to add value. Typically what we have seen is a 90 per cent renewal rate in maintenance business. They are at 75 per cent. That is just one example when we have the right caliber sales person with the partner we can grow the revenue and the margins right now. We are just spread too thin.
CDN Now: Sage’s 27 channel programs have been streamlined into four categories. Will there be any changes or differences with that in Canada?
L.S.: We need to see how it fits and maybe we put more emphases on one pillar over the others. I do not see any fundamental changes. We might focus on one pillar over another depending on the partners.
CDN Now: How many Simply Accounting customers do you move over to the channel each year?
In the Simply Accounting business we have more than 500,000 registered users and 11 per cent told us they have outgrown the product and so that is little more than 50,000. So two thirds of that want to stay with Simply Accounting so we introduced Simply Accounting Enterprise. The rest is going into the mid-market space and that translates into four per cent. We need to grow it. In the past, I do not think we did a good job in making that experience easy. It is a significant change for a customer to move from Simply Accounting to Accpac and we need to make that easier. In the U.S., Quick Books is a threat. They have 4.5 million and last year flipped 13,000 to Quick Books Enterprise and it is a bit of a race to see how fast they can get to the channel. For us we need to find out how we can simplify that solution. To simplify the mid market solution