At its SugarCon customer conference in April 2013, SugarCRM made the case that companies need to dramatically expand their approach to interacting with customers and prospects. This fits into Ovum’s Customer-Adaptive Enterprise framework, and we agree that it is an important strategic change.
SugarCRM believes that every customer is important no matter how small, every employee is a potential customer, and every interaction is potentially a critical contact. However, for SugarCRM to achieve its ambitious vision of “every customer, every user, every time” will be a non-trivial exercise. SugarCRM and its partners will have to help customers change their strategy, success metrics, training, processes, culture, and more. This is because this shift is also about business, not just technology.
If SugarCRM can get mindshare for the “every” vision then it could achieve a competitive advantage, because if the strategy is successful, it will be able to directly attack salesforce.com on pricing and will expose legacy vendors as not being sufficiently agile.
Adding customer-facing roles beyond the sales representative Because CRM has become nearly synonymous with “sales force automation” and “customer call center”, one of the tasks for SugarCRM is to get organizations to rethink the addressable market. SugarCRM CEO Larry Augustine cited 450 million customer-facing employees as the addressable market for CRM, but there are only 18 million CRM users worldwide.
Part of this discrepancy is cost. Enterprise-grade CRM seat licenses are traditionally expensive, but equally importantly, organizations don’t think of employees who are not in sales or service as potential customer contacts. This is short-sighted because Internet-savvy prospects and customers are quite capable of finding non-sales and service contacts in companies, such as public relations, receptionists, warehouse workers, accounting clerks, and so on. If these employees do not have the ability to pull up customer data quickly and react appropriately, they could inadvertently cause a problem for the customer and the company. Equally important is that if these employees cannot capture the information about their customer interaction, vital information and institutional memory about the customer will be lost.
While SugarCRM did not highlight roles beyond sales during the SugarCon keynotes, it did devote a considerable number of track sessions to the roles. The sales rep interface is easy to demonstrate in a keynote, but it would have been useful to show how other employee roles could use SugarCRM to find timely information about customers.
License cost is a legitimate barrier While the cost of software licenses is not the most important barrier to the “every user” scenario, it is an issue. SugarCRM addresses this in part by simply charging less for main seat licenses and not charging incremental fees for functionality such as portals and mobile clients. For example, the chief operating officer of industrial value manufacturer Bray said during his speech that part of Bray’s decision to switch to SugarCRM after less than four years on salesforce.com was the roughly 40% reduction in license costs. He said this was important because Bray is moving to an “every user” strategy, so a 40% reduction in license costs translates to 66% more seats for the same budget.
To further address the license cost barrier, SugarCRM has the opportunity to add additional license models, such as concurrent, role-based, casual, or lightweight users. Not only could this enable an “every user” strategy, but it could also provide a serious advantage over enterprise competitors.
User lack of engagement with software tools is another puzzle to solve SugarCRM’s “every user” vision also creates a need to rethink and retune user engagement. One of the problems that organizations struggle with is how to get users to actually use, completely and effectively, the software that is provided for them. A commonly cited study by gamification vendors shows that 50% of enterprise applications are not fully or properly used, and adding many more casual or infrequent users to the mix would only make the problem worse. It will fall upon SugarCRM to help its customers solve this user engagement puzzle. This could be an issue that SugarCRM addresses organically, or with partners in gamification, such as, for example, Badgeville and Bunchball, and adoption-monitoring or engagement automation, such as Evergage and Totango.
Recommendations for enterprises and public sector organizations While an “every customer, every user, every time” vision might seem a bit far-fetched to most organizations struggling with doing more with less, this is exactly the type of idea worthy of brainstorming. Ovum suggests that managers use this idea in conjunction with Ovum’s “Strategy Framework for Transformational CRM” as a catalyst to do a zero-based rethink of their customer strategy.
For large organizations considering a major CRM procurement or upgrade project, Ovum recommends that they include SugarCRM on the vendor shortlist. SugarCRM has demonstrated technology and thought leadership that could push the project team toward a more innovative customer-interaction solution.