“It was basic marketing 101,” says Amanda Jobbins, chief marketing officer at Sage Group, the only software company in the FTSE 100. She is referring to the way she had to educate her colleagues on the company’s executive committee of what her role encompasses.
Jobbins is Sage’s first CMO, and has been in the post for just over a year. She joined from a senior role at Cisco, with a brief to create a global brand identity and positioning and “make sure the entire organisation was immersed in what it means to be a brand-led company”, she says.
The executive committee, including the chief executive, chief financial officer and human resources director, realised the business needed a top-flight marketer, but they were not entirely clear on what the job should involve.
“The team had already made the leap of deciding that they wanted a CMO, so I had to come in and do what I needed to. I questioned them on a lot of strategic issues. “For instance, ‘if you are serious about the US market, why are we not considering redirecting funds from one geography to another?’. Entering the US will be proportionately more expensive than maintaining our share in the UK, where we already have great brand awareness, for example. They had not really thought about issues like that so it was basic marketing 101.”
While it may not seem to be the most inspirational brand, Sage has broad reach, with more than 6 million business customers using its accounting software globally, and 13,300 staff in 23 offices. First half revenues to March 2013 were £708m, showing growth of 3 per cent year on year. Full year results were due as Marketing Week went to press.
Before joining Sage, Jobbins had been living in San Francisco for 10 years and did not have much knowledge of the company. “It’s not a well-known brand but I started talking to the management team and got a feel for the aspirations of the company and realised it was kind of a golden opportunity. “I’ve worked for a lot of big names before and I could have come [back to the UK] and done so again but what was fun about Sage was getting to build it from the ground up.”
The business had grown by acquiring software market leaders, such as US developer Peachtree in 1998 and South African company Softline in 2003. But until this year, those subsidiaries’ products were known under their original names rather than being Sage-branded. After the previous focus on this strategy of acquisition, the priority has evolved into improving Sage’s organic growth with its customers, which are mainly small companies.
“When [the executive committee] decided to put the CMO role in place, it was because of the recognition that to drive more growth it was going to have to bring together the entire organisation to leverage its scale.” Her first major move to make that dent was to rename products and websites that were not Sage-randed and to roll out a new logo and visual identity. Jobbins’s second task has been to look at pricing, helping to move the business into the cloud and having customers subscribe to its services each year, rather than buying a one-off licence.
“The move to subscription is a huge opportunity because it changes the nature of our relationship with the customer and increases their lifetime value to us three-, four- or five-fold.”
But unlike media and marketing software developer Adobe, which changed to a subscription model virtually overnight, to the annoyance of many customers, Sage has not forced people to switch immediately. Pricing strategy is a key part of how Jobbins’s performance is measured overall.
“It is significant because there’s a lot of money on the table that I have to generate for the company so that we hit our growth target,” she says.
She had to get the company’s operating companies around the world into line on price, as they had been working out their own strategies independently of each other. “They had never done any deep thinking about why they had set prices at a certain level or had in place any kind of annual price increases. Just basic stuff. “So we’re looking at whether we can change people’s usage rather than [the number of] users, looking at the move to subscription and our discount strategy, making sure we are more rigorous.”
Each operating company within the group has targets but it has not been easy to help the heads of each to revisit their pricing strategies. Jobbins describes it as “hand- to-hand combat” with some and has encouraged leaders to consider principles such as raising prices each year as a premium brand, especially if their company is the market leader in that region.
“You want to get what your product is worth. If you go into a shop and buy a watch, there’s a price point below which you start being suspicious or one above which you think it’s not good value. If you are not paying enough for an item, you tend not to value it. “It is quite psychological and it is testing the teams in the countries. We are asking them to think about who we [as a company] are.”
Sage will roll out a brand marketing campaign in its top six regions – the UK, France, Germany, Spain, Brazil and the US – focusing on the idea that its products can give customers freedom and confidence to run their businesses day-to-day.
Sage’s research has shown that what people want from their provider of bookkeeping and payroll software is something easy-to-use and secure, a service that gives them control, and to have someone at the end of the phone who can help them. Feeding this into the development of the campaign means the creative will focus on seeing things from a customer’s perspective. “It’s not ‘look at us, we’re great’, we want to look at our customers and make them the hero,” says Jobbins.
Finding the budget, which is “in the millions”, for the marketing campaign was difficult. Rather than there being a central amount allocated, Jobbins had to convince the heads of the operating companies in each of its top regions to pay for it.
“I had to get the money off them and pool it, so that was quite a significant win. They did have a marketing budget at the operating company level [by region] but they thought of it as primarily a demand-generation budget and there had been some severe inefficiencies in the way they had spent it. A big part of my role was about educating people about what marketing can do if they leverage the scale they have.”
The campaign will use targeted print elements but will heavily rely on digital media, which Sage hopes will also help it to sell direct online. Sage’s digital strategy has three phases: optimise, which involves sorting out its websites; monetise, in other words selling directly online; and socialise, which is encouraging customers to share their data and provide insight to others.
The business has a lot of data on its customers and the problems they face are often similar. Sage is working out how it can help clients to compare their performance against others in their sector, which in turn would help them run their businesses more efficiently. “If we can benchmark their data, for example their cashflow position against another company of a similar size and in the same stage of its life cycle, then we can say to them ‘have you thought about this?’, so that is proactive advice. We could potentially charge for that.”
The business model for the potential new service is being considered as it depends on whether there is demand for it. However, Jobbins speculates that this service-and-advice element may become central to what Sage does.
“It depends on where the market is at the time, because that might then be the product. We’re not sure what that commercial model will look like.”
Jobbins is also looking to work more closely with independent software vendors (ISVs) and resellers to help market its products. An ISV might write its own extension of Sage’s software that it knows a particular sector needs, for example, and she wants to create an ‘ecosystem’ of them. “[Then we can] take care of them and give them tools so they can write those applications and by virtue of that they extend your market significantly.”
The aim is also to work closely with resellers around the world. “We need to do more effective joint marketing with them, but that’s in the future. The marketing organisation at Sage is at the first stage of its five-year journey.”
￼When Amanda Jobbins joined Sage Group as its first chief marketing officer, she had to educate the business in the art and science of marketing.
We went around the business and ran a series of ‘brand emerging’ workshops. I did the brand evangelism thing, talking about what a brand is and why it matters. As part of the session on ‘what is a brand’ I explained that it is not about a dictatorship. Interacting with a brand is just like interacting with a person. They act in one way in one forum and another way in a different forum.
We also used storytelling to talk about customers our staff had helped or businesses that they had grown. We build confidence for our customers but a big part of that is building confidence for our employees, because if they don’t believe it, they can’t deliver it.
In good company
I said to chief executive Guy Berruyer that if we are to change the perception of our company, we’ve got to change the company we keep. If we want to be seen as a fast- moving technology player, then let’s make sure that people know we are teaming up with organisations such as Microsoft and Google. We have cemented our relationships with them. Google recommends our Sage One software to its Google Docs customers and we also use Microsoft’s cloud platform, for example. From a marketing perspective, it is important for me to elevate those alliances and ‘PR them’, which we have been doing this year.
Global marketing team
I haven’t hired many people. I have a person who looks after customer experience and digital marketing, a global brand campaign director, a global pricing director and someone on market intelligence.
The company has marketing teams in each of our 23 countries, so part of my role is to orchestrate them into a lean, mean fighting machine. I have a blueprint for what the team should look like in future. As well as a pricing head, it should have a head of global strategic product marketing and a head of global strategic alliances and partners.
Sage has a good heritage in terms of caring about the customer experience and the company as a whole takes 38,000 calls from customers daily. But when I came on board it was apparent that we didn’t have a common checking method across the globe.
Every operating company was measuring things in its own way, not at the same time of year and using different reporting tools.
So I have brought in a customer experience and net promoter score (NPS) expert and given her the task of harmonising NPS tracking of customers likely to recommend Sage. We want to share that with the board and use it in a meaningful way.