SugarCRM recently announced that it was “Driving the Future of Customer Experience with Powerful Products and New Vision.”
As the “CRM” part of SugarCRM suggests, the company sells solutions for sales, marketing, and customer service. Sugar Sell is best known because sales automation is what the company offered when it launched in 2004 as an open-source project. “Commercial” versions were available for sale that included more function and support. Marketing and service solutions came only recently — more on that in a moment.
Later that year, private equity firm Accel-KKR become SugarCRM’s sole investor, reportedly for a “nine-figure strategic and significant investment.” Typically PEs do buy-outs as part of a restructuring to boost performance, so the company can be sold for a profit later, or go public. As of last year, SugarCRM reportedly booked around $100M/year and planned to double that with the help of Accel-KKR’s investment and organic growth.
Early this year, Craig Charlton entered the picture as a new CEO to drive that growth. A seasoned tech executive with eight years of experience in the PE world, Charlton told me his goal was to reinvigorate the brand and “turn a good company into great.”
Finally, a full CRM suite
Back in the day, “CRM” was a label applied to just about any solution automating sales or marketing or service. Siebel and many others, through development and acquisition, repositioned CRM to mean a full suite: sales and marketing and service, built around a shared database to provide a “360-degree view of the customer.” SugarCRM apparently never got that memo and stuck with sales automation.
Until now. Three months ago, Charlton decided to fill the marketing automation element with the acquisition of Salesfusion. SugarCRM CTO Rich Green said they’re working to integrate what is now called Sugar Market into the shared data model underpinning the new suite, which now also includes…
Sugar Serve, a case management solution which Green says was developed in the past year as an enhancement to a lighter weight service capability found in the core SugarCRM product.
Green emphasized that the product strategy was not just about offering the usual CRM point solutions, but to do so in a platform using advanced AI-based analytics and services. And that brings me to the subject of CX.
Intelligent CX platform
All of the above makes a lot of sense to me. An impressive amount of change in a very short time. But I found the positioning as a “CX platform” interesting, to say the least.
Here’s a diagram of the SugarCRM platform:
Why the “CX” positioning for what most would call a CRM upgrade? Charlton explained that he learned via a customer listening tour that CX was driving their strategies, and SugarCRM’s intent is to provide the tools to help them execute.
Fair enough, but pretty much everyone has jumped on the CX bandwagon. That’s what led me to write a slightly tongue-in-cheek post that CXTech is a $1 Trillion Market.
SugarCRM hopes three capabilities will provide differentiation in the very competitive CRM er CX market. I asked Green to explain what these terms mean.
- Time Aware Customer Data Model — capture data over time, not just at a point in time as sales solutions commonly do. Time-based storing of data is especially useful in marketing, but can also be applied to service and sales for next-best-action recommendations.
- No-Touch Information Management — reduce the time for users to enter or review information by proactively (based on analytics) sending alerts on action needed. Another job where AI/ML can help.
- Continuous Cloud Innovation — sure, use the cloud to host apps, but don’t stop there. SugarCRM plans to leverage microservices such as Amazon’s machine learning to deliver innovation faster.
Have we reached peak CX?
Remember “peak oil“? That was a theory that oil production would peak in 1970, and then decline. Good theory, but failed to account for new sources/methods, such as fracking. As you can see from the chart, oil production in the US seemed to follow the predicted decline until about 10 years ago, when production started climbing again.
Most business executives claim they want to compete based on CX, although enthusiasm may be waning. Reality is setting in that CX is (really) hard work, if you want to move the needle on company success, that is. According to this article, Gartner predicts a shift in CMO priorities to profitability, due to “more realistic expectations and utilisation of data and technology in marketing departments, including the increased adoption of artificial intelligence (AI), as well as a correction in customer experience hype.” (my emphasis added)
I could add that a looming recession will quell CX happy talk, unless cold, hard benefits can be proven. Unfortunately, my latest study found only one in four CX initiatives are able to quantify business value. I fear a lot of well-meaning CX efforts will be paused when business slows. For vendors, that could make marketing “CX” solutions problematic.
The future could be sweet
SugarCRM’s future will be bright if it can execute well on Charlton’s priorities: Creating a renewed sense of purpose, re-building the brand to become known for a full suite, and delivering a competitive solution that helps business leaders deliver on their CX dreams. That’s easier said than done, but Charlton’s background suggests he has the chops to pull it off.
Independent CRM analyst and CustomerThink Advisor Thomas Wieberneit agrees with the platform strategy if the goal is to compete with tier one vendors. He also says “experience” is the term all the vendors seem to be using, so “there is no way around it.” True, but Salesforce.com doesn’t go to market as a CX solution, and “customer engagement” is favored by a few brave souls that aren’t betting the farm on CX.
Still, marketing a “CX platform” could open doors and stimulate some to take a fresh look at SugarCRM, as I just did. But after that door opens, the revitalized SugarCRM organization will need to show they can bring real value, whether to support CX strategies or more prosaic automation à la CRM. A downturn and subsequent tightening of budgets could see a shift to efficiency and profitability, where SugarCRM has much to offer.
Disclosure: This post is part of my independent coverage of industry developments and is not an endorsement of any companies mentioned. SugarCRM has not been a CustomerThink sponsor.