Sage is a multinational software company headquartered in Newcastle-upon-Tyne, in the north of England. It is the third largest global supplier of enterprise software, behind Oracle and SAP, and the largest supplier to small businesses. We caught up with Juha Harkonen, VP Ecosystem and Marketplace Strategy, to find out more about Sage’s approach.
How long have you had a digital marketplace and what was the main business driver for setting it up?
The partner marketplaces have evolved over time. They started as static listings catalogues and have now evolved to integrated full service transactional marketplaces with licensing, provisioning, and billing capabilities. At the heart of these marketplaces is a catalogue of offerings that extend the capabilities and value of our core accounting solutions. These can be brought to our customers through segment and geographically curated store fronts, through in product experiences, our sales teams or through our value-added resellers. The main drivers for marketplaces are the transformation of customer buying patterns, ambition to grow, and the need to drive efficiencies.
What impact has the marketplace had on traditional sales?
What is traditional sales? A customer talking to a seller, testing product, and submitting a purchase order? This sales model has not gone away, but it is just now facilitated through a digital commercial platform. Also, especially small and medium sized customers, increasingly do discovery online and make product decisions without consulting sellers, which is reflective of the consumerization of B2B buying. This is where the digital marketplaces can connect with and serve higher volumes of customers, delivering greater value to our customers and drive more economic opportunity for our value adding partner ecosystem. Customers have the ability consolidate purchases, get a better control over their software estates, and potentially benefit from volume discounting.
How does the marketplace tie in with your partner program structure, goals, and partner development funds?
The marketplace is an extension of our partner engagement framework. Partners are interested in three core things: economic opportunity, enablement support and opportunities to differentiate through innovation. Marketplace and our partner revenue share opportunities speak directly to the partner expectation of economic opportunity. The engagement framework provides joint innovation and enablement support. Marketplaces generate transactional revenues that allow us to invest back into mutual growth through co-development.
How do you measure the effectiveness of your marketplace?
We monitor monthly active visitors, engagement, lead share, and outcomes as measures of effective marketplace conversion. We also measure partner and customer net promoter score to get a deeper understanding of their experience.
Does the marketplace create any channel conflicts?
It certainly should not. We often mix marketplace with sales channel. Marketplace is the commercial engine that powers different direct and indirect channels like in product, storefront, inside sales, direct sellers, and the value-added seller channel. What may cause channel conflicts is when vendors do not have transparent segmentation strategy. For me transparency and trust are core to a robust and thriving ecosystem.
How do you research and improve the user experience of the marketplace?
The telemetry-led insights into usage patterns gives us a constant feedback loop. As well as quantitative telemetry, we also do qualitative listening through focus groups. We are constantly improving the user experience, with a focus simplification. I am very much a believer in less is more in many ways, as long as why, what and how you offer it is relevant to your audience.
How do you support discoverability in the marketplace?
Well first our marketplace is not one big storefront or catalogue. We have segmented storefronts by solution and geography to increase relevance to the buyers. We also offer search capabilities so that the customers can find the right value extension for them using natural language queries. And lastly, we categorize the value extensions by customer outcome to help customers reduce the scope of search to a smaller subset of offerings, if they do not know exactly what they are looking for.
How do you promote the marketplace to customers?
We do not actively promote the marketplace, as it is just a means to an end. For Sage, the true heroes are the partner value extensions. And how they help our customers transform the way they think and work so their organizations can thrive.