Love it or hate it, the first results of Sage North America’s brand transformation strategy have started rolling out in North America. Sage North America CEO Pascal Houilon announced the rebranding initiative last year, which aims to strengthen Sage’s brand–especially in North America (link to last years blog). The initiative is designed to address the fact that while many individual Sage products (think ACT!, Peachtree, etc.) enjoy strong brand recognition, the overall Sage brand must be stronger to optimize cross-sell, upsell and connected services opportunities between its products.
Sage reasons that a stronger Sage brand will both increase the odds that existing Sage customers will turn first to other Sage products when they need new solutions, and elevate consideration among small and medium businesses (SMBs) who don’t currently use Sage products. Under Sage’s new naming convention, most products will have a number and descriptor (as Sage has been doing in Europe for a while). So for instance, Peachtree is becoming Sage 50 Accounting–U.S. Edition.
When initially announced, many derided the strategy on the grounds that the numbers were boring, Sage would lose much of the hard-won equity of the individual brands, and partners would need to shell out to support the rebranding. Last but not least, would the rebranding go beyond name changes to encompass significant product and services transformation as well?
This past week, Sage launched its new website for its North American business, www.na.sage.com, and kicked off a new integrated ad campaign to highlight how it can deliver value to small and medium businesses. The campaign will run on national print, radio and online outlets (including The Wall Street Journal, The New York Times, The Business Journals, BusinessWeek, Inc., Entrepreneur, Fortune and others) and will expand to television (CNN, CNBC, Bloomberg Television and others) in the summer.
Along with this, we can also see some initial results of the transformation in the new Sage 50 Accounting (aka Peachtree) and Sage One, a new offering. Prior to the launch, Sage provided us with briefings and demos of both. Here are my first impressions of how Sage’s strategy is playing out in the early going.
Peachtree Becomes Sage 50 Accounting, the New Era of Peachtree
Although Peachtree, with its 34 year history, has been one of the biggest brands in Sage’s portfolio, it has also led the rebranding charge in North America, so it’s tempting to view it as a bellwether for how well Sage can execute on it’s transformational strategy.
Sage has given the product a fresh new look and added “the New Era of Peachtree” to the Sage 50 Accounting label to help preserve Peachtree equity. The little American flag on the box denotes that this is Sage 50 Accounting for the U.S. (Sage Simply Accounting, its Canadian counterpart, will also get the new Sage 50 Accounting handle, but the Canadian maple leaf will fly on its box instead). Sage is messaging the change to current customers through its newsletter, resources in the product, its channel partners and social media.
There’s ample evidence that the change is more than skin deep. In addition to doing a painstaking review of in-product taxonomy and labeling, Sage has put the new version through its paces in its usability labs, and made some significant changes to make it easier to use and get value from, including:
Figure 1: The Cloud Becomes the New Normal–But Accounting, ERP Lag
Sage One U.S. Edition, is Sage’s new online business management system designed to help the smallest of small businesses (less than 10 employees) manage money, time and projects. Many of these businesses currently manage their businesses with shoeboxes, pencil and paper and/or a jumble of personal productivity tools.
As part of product development, Sage spent a lot of time watching micro-businesses work and getting their feedback. The Sage team went to their sites, brought them into Sage’s usability lab to test prototypes, and ran focus groups for input. Not surprisingly, it found that most entrepreneurs and sole proprietors don’t get into business to do accounting–they want to teach karate, style hair, or install lighting–basically to do more of whatever it is they love and that makes them money.
Sage also found that these customers want workflow consistency–the ability to create proposals, track projects, assign and mange work, create and send invoices, record payments, and manage expenses. In a nutshell, they want to simplify business management and streamline collaboration. But they have very little time to learn new things: in a Sage survey among businesses with 0 to 9 employees, 66 percent said they use three or more software applications to manage their day-to-day operations–which leads to wasted time, inefficiencies and errors.
Sage One U.S. tackles this problem by bringing money management, invoicing, project tracking, task assignment, messaging and reporting into a single integrated web-based application. Accounting is at the core, and connected to other management functions to reduce data entry time. The solution provides collaboration capabilities to help businesses with distributed teams of employees, contract workers, partners, clients, etc., share and communicate, so no one works in isolation. Automatic notifications, reminders and tracking of in-progress or completed tasks are built-in to keep everyone on the same page. Pricing is $29 per month, which includes two administrative users, unlimited collaborative users (who can share projects, files, etc.), and five gigabytes of storage–as well as online and phone support. Sage is offering a special deal for the Sage One debut–customers can subscribe for just $1 per month for the first three months.
Sage is working with organizations such as the Future of Entrepreneurship and the Community College Association of Entrepreneurship, and plans to also leverage its Sage Accountant Network. These initiatives should help get Sage One onto the radar of very small businesses.
An Early Assessment
The paint is barely dry on these first steps in Sage’s brand transformation, and it’s much too early to tell if Sage will be able to truly reinvigorate its brand and its customers. But the early steps bode well.
With Sage 50, Sage is providing significant new benefits through additional services for BI, and raising the support bar by bundling Sage Business Care across the product line. And, Connected Services give customers a clear path to consume additional connected services in an incremental, yet integrated way (which is how most SMBs need to deploy them). I think that Sage’s existing customers will get over the name change (and eventually, so will partners). But, product differentiation isn’t enough–Sage will need to double down to reach and penetrate more of the non-Sage base in order for Sage 50 to really spread its wings and grow.
Meanwhile, Sage One is a good start at giving micro-businesses an all-in-one solution. The pricing model–which includes unlimited collaborative internal and external users–should appeal to small businesses that need flexibility and are wary of per user, per month pricing. Some of the things that I think it will need to add to really cover the bases for these businesses are email integration, some light document management, and some tools to automate basic marketing functions (such as email marketing and social media marketing). But the solution is built on Ruby on Rails, and should have ample flexibility to evolve–the question will be how quickly.
Finally, Sage’s new ad campaign seems significant and should also help it get on the radar with the new prospects that it needs to reinvigorate growth. However, Sage will also need to make sure that it has a solid social media plan in place so that it can engage with new customers and re-engage with those who have dated perceptions of Sage.
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Published by: IT Analysis Communications Ltd.
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