Sage levels playing field for subscription sales

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Sage North America channel chief Donald Deshaies

By Robert Dutt

Sage North America has announced changes to its partner program, boosting partner margins on subscription sales, and flattening a complex tier structure.

The program changes are designed to reflect changing customer buying patterns, and changing priorities for both the vendor and its channel partners, said Donald Deshaies, vice president of channel management for Sage.

Perhaps the biggest change, in the face of the move towards the cloud, is revamped partner margins for its subscription offerings. Sage introduced the pricing model two years ago, with the offer paying partners 35 per cent of the value of a subscription’s first year, and then 20 per cent of each renewal year. However, this proved not as profitable for partners as selling perpetual licenses. And with more customer interested in the subscription model, something had to give.

“Customer are doing more with subscriptions, and we’re trying to find ways to properly pay partners on that. We want our partners to benefit regardless of how customers choose to purchase,” Deshaies said.

The new structure will see partners get a first-year payment that will be the same margin as a license sale, while subsequent years get bumped up to 25 per cent.

At the same time, it’s simplifying the overall tier structure of its partner programs from 12 tiered groups of partners of different types to two categories – one specific for construction and real estate, and one for mainstream partners. The company is also calculating partner advancement through its tiers more proactively. Partner earn tier credits for dollars sold and special incentives, such as targeted products and markets in promos. Such credits will still be calculated on a rolling 12 month schedule, but now partner will be able to move up the company’s partner ranks on a weekly rather than monthly basis.

As part of that change, Sage is doing away with the requirement that solution providers include a certain percentage of new-to-Sage customers in their mix to reach peak points. In the past, the company rewarded more heavily on new customers than it did on current customers, which meant that partners focused on building existing customers saw margins lapse behind those who focused on new customers. Under the new program, a dollar of Sage sold is a dollar of Sage sold, regardless of the nature of the customer.

“It gives them the same growth and acceleration components to bump their margin level several points immediately, in some cases,” Deshaies said.

The company is also looking to drive cross selling across the company’s product line, introducing a 2x margin accelerator for cross sales, as well as providing partner tier credits

The program changes come into effect July 1.

Sage also announced that its Advisor Dashboard Web site for partners, first displayed at the company’s Sage Summit event last July, will come online by the end of the month.

Advisor Dashboard mixes CRM capabilities with the insight Sage has into its customers – what components they own, how and how often they use them, and how their usage compares to similar companies – and makes all of that data available to solution providers.

“We making the data Sage uses to help customers available to our partners. It’s about sharing more information about the overall customer journey and experience with partners,” Deshaies said.

This story was originally published in Channelbuzz on April 24  at  http://www.channelbuzz.ca/2014/04/sage-levels-playing-field-subscription-sales-9407/

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