SugarCRM Shifts Focus to the Mid-Market

LONDON -- SugarCRM has transitioned into a company focused on customer results, CEO Craig Charlton told analysts and the press at the SugarCRM 2023 Analyst Summit in London today. The summit was a follow-on event to Wednesday's 2023 Connected conference.

The change in focus has led to a 94 percent renewal rate among customers, with 95 percent of customers saying that SugarCRM is critical to their businesses, Charlton added.

SugarCRM is focused on mid-market businesses, according to Charlton. "Enterprise businesses are brand-name obsessed. No one gets fired if [a brand name CRM] fails."

Smaller firms, which had been a focus of SugarCRM, make up a difficult market because CRM systems need to change as business priorities change.Rretention of those businesses is a challenge, he added.

The mid-market, by contrast, recognizes the ongoing need and priority for a CRM system, while not being brand-obsessed like enterprise businesses are, Charlton explained. "They care more about the value than the brand. They are always looking to drive growth. There is a huge opportunity in that market for us."

Mid-market businesses are looking for actionable insights and guidance on how to do things better, Charlton added. These organizations also want flexibility with solutions that can shift to meet thieir changing needs, a value that SugarCRM delivers.

"We have an incredibly flexible platform that enables you to model the application to enshrine what makes you unique in everything you do," Charlton said.

SugarCRM has also transitioned from a point solution facing financial challenges five years ago to an end-to-end solution today thanks to 16 acquisitions. These have included W-Systems, Node, Salesfusion, and Collabspot.

"Today, we are very profitable."

The company is still pursuing other partnerships, including a couple to be announced in the couple of weeks, said Clint Oram, SugarCRM's co-founder and chief strategy officer.

As a privately held company, SugarCRM doesn't disclose financial results. However, Charlton did disclose that the company will continue to focus on the mid-market and on the manufacturing and distribution business, where SugarCRM has had the best success and retention rates.

Twenty-five percent of SugarCRM's customers and a third of its revenue come from those two verticals. Though manufacturing and distribution will be the focus, the company will not exit other verticals.

"We're trying to build connections with customers and be their trusted advisor and to help find avenues for them to be more successful," said Claire Dorrian, SugarCRM chief marketing officer. "Building momentum establishing connections in the in the accounts, remains a core part of what we're thinking about."

Dorrian added that when they purchase CRM platforms, mid-market companies are focused on not only the expected outcomes but also the buying experience, the core capabilities of the system, and how they can prioritize implementation.

Dorrian added that the company has been working with many European customers to bring generative AI within the SugarCRM platform.

New Generative AI Capabilities Unveiled

"We're very excited about the opportunities with generative AI," Charlton said.

He and other Sugar executives showcased the platform's new generative AI capabilities. The technology can act as a digital assistant, freeing up time and resources, enabling employees to focus on higher-value activities.

SugarCRM's new AI advancements include the following:

• Generative AI for Sales, for composing personalized emails and sales copy, ready-made call scripts, and sales proposals with real-time customer intelligence.
• Generative AI for Marketing, which creates personalized marketing campaigns, landing pages and emails, automatic translation, and improved segmentation.
• Generative AI for Customer Service, for summarizing case history and service tickets, creating personalized user guides and product documentation, and enabling agents and customers to find answers and resolve issues.

"Most businesses are looking to AI to transform experiences and drive greater productivity. Today's generative AI announcement is the latest evidence of our commitment to make AI accessible to all and to maximize usability for a next-level CRM user experience," Charlton said.

"The generative AI revolution is here, and midmarket sales, marketers and customer service pros can't afford to be left out of the equation," Charlton added. "With Sugar, organizations can unleash the potential of generative AI to automate, accelerate and optimize marketing, sales and customer service."

Sugar's new generative AI capabilities are currently available to customers participating in a closed pilot program. The company has yet to announce when those capabilities will be available for other customers.

Generative AI will help manufacturers serving other manufacturers (e.g., valve manufacturers) be able to quickly handle requests, such as invoice queries, supporting humans in real time Christian Wettre, senior vice president and general manager of SugarCRM's Sugar Platform, said in an interview with DestinationCRM.

"They're dealing with enormous amounts of data, and they need to be able to pull up information in real time," Wettre added. "That's what their customers expect."

Those queries need to examine large amounts of data very quickly, a capability for which generative AI is designed, Wettre said. "We help them look through all of that information with less stress."

Though other CRM vendors offer their own generative AI capabilities, what sets SugarCRM apart, according to Wettre, is the flexibility or capabilities of the platform.

While some large CRM vendors offer most of the same capabilities, the platforms dictate how customers will use it rather than enabling the customer to use the platform in the way that works best for the business, according to Wettre. Smaller CRM vendors have platforms with fewer capabilities.