From Monday, 1/27 evening to Wednesday 1/29 in the morning we had some time jam packed with information and good conversations with SugarCRM execs, customers, and in between analysts. The main summit started with a bang, namely the announcement that industry icon Bob Stutz joins the SugarCRM board of directors, which is something that few of us, if any, had foreseen. This is exciting news.
With David Roberts, who succeeded Craig Charlton in September 2024, SugarCRM itself has a new CEO with a long time CRM pedigree.
As with every leadership change, this promises some change. Every new CEO evaluates what they see vs. where they want their company to go and then, together with the team, establishes and executes a plan to get there. Usually, this involves some change in the structure of the executive leadership team, too.
This is what happened and happens with SugarCRM. The company had and has a strong leadership team, with new faces like Paul Farrell (joined in March 2024), Jason Glass, and soon a new Chief Customer Officer – although with Christian Wettre or Chris Pennington some other strong players left for various reasons.
As I have written in the past, the company has a great yet varied history and, more importantly, potential due to great software. What SugarCRM to some extent is missing is a distinguishable identity. In a market that is as crowded as the CRM/CX market, differentiation is of crucial importance. As I have said and written before, SugarCRM’s messaging needs to change to avoid being perceived as a “me too” product.
Functionally, SugarCRM has a competitive sales solution, and fair marketing- and customer service solutions, plus a number of add-ons, some of them really interesting, e.g., sales-i, its intelligence add-on or Sugar Connect, which makes Sugar available outside the application frame. Whenever I conduct a software selection for clients of mine, I witness the strength of the Sugar Sell solution myself. It regularly makes it at least amongst the finalists and often gets selected by my clients. This is not only due to its capabilities but also thanks to strong performances and demos by the Sugar sales teams. And this is in spite of Sugar Sell resembling more of a toolbox than a preconfigured solution with built-in processes. Again, this is testament to the functional strength of Sugar Sell (although it has some deficiencies, too).
From a messaging point of view, really everyone (and their dog) talks about platform and being a CX player. SugarCRM needs to change away from these two points, as they also do not communicate much about outcomes, let alone value.
And Sugar will do this. More about this in a bit.
So far, Sugar’s value proposition revolves around the platform, automation, and discovering opportunities. Targeted personae include marketing, sales, and service leadership, although the winning chances in marketing and service against formidable opponents like HubSpot or Zendesk are slimmer than in the sales area – which does not mean that customers who chose Sugar Market or Sugar Serve are unhappy, on the contrary! Still, I regularly heard from Sugar executives that “we tend to win, when the customer need is sales, and not marketing driven.”
In addition, the messaging is a little about everything for everyone. It is not that Sugar doesn’t deliver but the value is not immediately clear. Add to that the fact that the flexibility offered by Sugar lets the fresh application appear a bit like a toolbox rather than a ready-to-use system.
To be fair, Sugar initiated a transition already more than a year ago, based upon the realization that the company is highly successful in the manufacturing, wholesale and distribution markets, in particular in the mid- and upper mid-market. This created an obvious focus area for the company. Yet, the message didn’t evolve enough to support this change.
After the analysis done by David Roberts and his management team, this is subject to change. One of the words we heard over and over during the analyst summit is “focus”, the other one is “aligned execution”. Both are terms that I strongly associate with Bob Stutz, so I see a formidable alliance of seasoned executives with similar values and passions joining forces now.
Which leads me to the strengthening of Sugar’s transition
David Robert’s vision for SugarCRM can be summarized with “boldly focus on our strengths while not forgetting about our customer base – and be clear about it”. The new Sugar strategy, including an upcoming more specific tag line revolves around it, from a product- and technology view, but encompassing GTM and partner strategy. Stay tuned, I cannot and will not take away the thunder. So, a drumroll here …
My point of view and analysis
The strategy is straightforward and consistent. As said, it builds upon earlier realizations and extends a change that is ongoing for more than a year now.
Its risk, apart from the human aspect (not everyone lets readily go of ingrained habits) lies in not to antagonize the existing customer base outside the sharpened ideal customer profile (ICP). This requires a balance that is hard to maintain. Yet, keeping churn numbers low via word and action is of crucial importance. So, careful balancing and execution is key. I am quite sure that Bob Stutz can and will give great advice, as he has executed this kind of strategic shift multiple times.
One thing that is really refreshing and creating signal in the noise is the notable absence of “agentic AI”. Instead of focusing on buzzwords, SugarCRM looks at AI as a means to achieve business objectives. I regularly advise my clients that AI is a means, not an end. Communicating it as such is far more powerful than jumping on the buzzword train.
The executive team that we met on the analyst day seems fully on board, which is extremely important, as following through do mean some changes, not in the least some more process rigor and some preparational work, which is ongoing.
Given all this, I am excited about 2025 and 2026 and very interested in seeing how Sugar evolves. Repositioning will take a bit, but I see a sweet future for SugarCRM.
Sorry, I could not resist this one.
Comments
Post a Comment