Sage Boosts Incentives For Snagging N

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Sage Boosts Incentives For Snagging New Customers

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Sage North America wants to increase software sales to current customers and capture new customers to boost its top line—and it's counting heavily on its channel partners to do it.

Sage is rolling out a number of changes to its Partner Advantage Program, including revamping the thresholds for attaining higher-level Gold or Platinum partner status and offering financial incentives for bringing in new customers. The software vendor has been quietly implementing the changes in recent weeks and made them public this week at the company's Insights partner conference in Nashville, Tenn.

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But Sage North America President and CEO Sue Swenson acknowledged the company still has work to do to improve communications with its 5,000 North American solution provider partners who account for about one-third of the company's sales.

"I believe we have a huge gap here," Swenson said in a meeting with reporters and analysts Tuesday. "We don't do a good job of telling them about the things we're working on. We need to do a better job of communicating because right now it's pretty hit or miss."

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She won't get much argument from one Iowa-based channel partner who said she's been called only twice in 10 years by her Sage account representative. The reseller, who asked that she not be identified, also said she'd be interested in expanding into sales of Sage's Medical Manager application, but can't get a list of old customers in her area that she could service and sell upgrades to.

A recurring theme at Insights is that Sage needs to increase software sales to existing customers and to attract new ones. A big part of that is getting partners to expand beyond the specific Sage applications they carry and sell a broader range of the vendor's product line, as well as aggressively recruit new customers.

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Two weeks ago Sage began overhauling its partner tier program, standardizing the thresholds for attaining Bronze, Silver, Gold and Platinum status. Thresholds differed widely between product lines given that Sage acquired most of them, said Paul Johnson, executive vice president of sales in the newly created Sage Business Solutions division and who has overall responsibility for the company's channel efforts.

While a few thresholds increased, in many cases they were lowered— as much as 25 percent in some, Johnson said. "Quite frankly, it was a challenge for our partners to achieve the higher tiers," he said. He declined to disclose actual dollar thresholds.

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He also acknowledged that some partners that have already achieved top-tier status aren't particularly happy it's easier for other solution providers to move up.

During a presentation Tuesday morning on what Sage is offering resellers of its CRM applications, Executive Vice President Joe Bergera said partner tier thresholds for CRM products declined as much as 30 percent.

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Sage has also been adjusting the margins it pays resellers to bring them in line with, and compete against, margins offered by other vendors. Johnson said margins were increased for "many" products and decreased for "some" others with margins increasing or decreasing as much as 12.5 percent.

In addition, Sage is offering financial incentives in the form of additional marketing co-op funds for bringing in new customers. Under the Partner Reinvestment Initiative, channel partners who bring in more than two new customers through Sept. 30 get $500 in marketing funds for each new customer—a figure that increases to $1,000 for every new customer beyond seven.

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And if a channel partner recruits a customer using a product from a competitor such as Microsoft (NSDQ:MSFT) or Epicor, they receive co-op marketing funds equal to 25 percent of Sage's net gain from the deal. Likewise, channel partners that sign a new customer to a two-year maintenance and support deal get 10 percent of the value of the contract's second year in co-op funds, Johnson said.

Johnson also said he expects to hire within two or three weeks a new executive to oversee channel marketing, partner programs, partner strategy and partner education. Johnson first disclosed creation of the new post, which will report to him, in a letter he sent channel partners Friday following a reorganization of the company's divisions. Johnson said he expected to hire a "seasoned, channel-experienced executive" for the job.