sugarcrm

Businessmodel of SugarCRM

Customer Segments

SugarCRM has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at organizations of all industries and sizes.

Value Proposition

SugarCRM offers four primary value propositions: accessibility, cost reduction, performance, and brand/status.

The company creates accessibility by providing a wide variety of options. Its solution runs anywhere, including private clouds, public clouds, on-demand, or on-premise.

The company reduces costs in a variety of ways. It maintains an “all-in-one” price for a complete set of sales, marketing, and service capabilities. It charges the same amount for on-site and cloud deployment. It charges no hidden fees and does not force clients to obtain upgrades. Lastly, it offers a free trial to customers so they can evaluate its solutions before purchase.

The company demonstrates strong performance through tangible results. Specific positive outcomes for clients include the following:

  • AGFA Healthcare used SugarCRM’s solution to implement its first global CRM platform, resulting in a 139% return on investment and an average annual benefit of $1 million
  • Leapfrog used SugarCRM’s solution to create a central hub for customer data, resulting in a 225% increase in customer purchases and an increase in customer retention from 47% to 57%

  • A Mexican leasing company used SugarCRM’s solution to replace its homegrown financial system, resulting in a 60% increase in application processing efficiency The company has established a strong brand due to its success. Its solutions are used by over two million individuals in more than 120 countries and 26 languages. Its prominent customers include IBM, Mitsubishi, HTC, Sennheiser, and AGFA Healthcare. Lastly, it has won many honors, including:

  • Ranking on the Forbes Cloud 100 list
  • The CRM Product of the Year Award at the 2015 Network Computing Awards
  • The 2015 TMC CRM Excellence Award
  • Recognition as a “Leader” in the Cloud Vendor Benchmark report by Experton Group
  • PC Magazine Business Choice Award in the CRM category ### Channels

SugarCRM’s main channel is its direct sales team. The company promotes its offerings through its website, social media pages, and participation in conferences. It hosts an annual conference called “SugarCon” for the company’s customers, users, and developers.

Customer Relationships

SugarCRM’s customer relationship is primarily of a self-service, automated nature. Customers utilize its products while having limited interaction with employees. The company offers training on its offerings through self-paced online learning courses, video tutorials, and pre-recorded webinars.

Its website features a “Resources” section that includes useful tools such as white papers, analyst reports, eBooks guides, demos, and webinars. The site also provides answers to common questions.

Despite this orientation, there is a personal assistance component in the form of phone and e-mail support, live online training, and live on-site training. Participants can validate their skills through a certification program. There is also a community element in the form of a peer forum.

Key Activities

SugarCRM’s business model entails designing and developing its products for customers.

Key Partners

SugarCRM maintains the following types of partnerships:

  • Resellers - The company works with firms that sell its solutions in order to extend its reach. Specific partners include Faye Business Systems, Brainsell Technologies, Squiz, W-Systems, and iNet Process.
  • System Integrators – The company works with firms that provide integration, consulting, and delivery services for customers‘ SugarCRM projects. Specific partners include IBM, HP Enterprise, and Infosys.
  • Software – The company works with software firms that extend the value of clients‘ deployments by adding tight connectors and integrations to technology applications and solutions. ### Key Resources

SugarCRM’s main resources are its human resources, who include the engineers that design and develop its products, the sales employees that promote them, the training employees that provide instruction, and the customer service employees that provide support.

Lastly, it has relied heavily on funding from outside parties, raising $104.1 million from six investors as of September 2015.

Cost Structure

SugarCRM has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing, a fixed cost.

Other major drivers are in the areas of customer support/operations and administration, both fixed costs.

Revenue Streams

SugarCRM has one revenue stream: revenues it generates from the sale of its products to customers.

Written on October 25, 2017