by
Kayla Cobb, Reporter
THE CUSTOMER
SAP is a market leader when it comes to enterprise software.
According to Eric Martin, Vice President of Marketing, SAP, "We provide software that helps businesses run their entire operation — everything from back office financials to their HR department to their inventory management and supply chain and the underlying database that it all runs on as well."
The company currently has over 75,000 employees across the world, and its mission is to help the world run better and improve people’s lives, Martin said.
"The way we do that is by helping companies and NGOs and governmental organizations all to operate more efficiently, to save money in the process. And therefore to improve the standard of living and the quality of life of people around the world," he said.
According to Martin, the organization’s ideal customer is a multinational corporation that possesses fairly complicated supply and customer chains. These corporations would benefit from the automation of all of their operations on a single platform.
CHALLENGE
SAP faced a challenge specific to its
large customer base and extensive list of services: 10% of the company’s accounts covered in SAP America were responsible for a third of the revenue in the region, Martin said.
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"We knew that we were touching them regularly through marketing activity, but what we found when we really looked across it was that those marketing touches were not being conducted in a way that was personalized or customized to that account, typically," he said.
Though SAP regularly sent out marketing collateral to its customers, these marketing efforts did not always indicate that the company knew what SAP software was already being run at customer companies. The SAP team wanted to correct this so they could touch their most strategic customers in a way that indicated that they intimately understood customer needs, according to Martin.
This revised and personalized marketing approach was especially essential considering that SAP’s typical customer could be using several of the companies' solutions over the course of many years.
"We have a very broad portfolio of products, and when a customer enters a relationship with SAP, it could be for decades that they’ll want to be working closely with us and coming back and purchasing again and again," he explained.
CAMPAIGN
To better cater to these top accounts, the SAP team implemented an account-based marketing program. The goal of this program was to offer dedicated marketing plans for select accounts.
"We knew that we could get smarter about it and we had a number of conversations with our top sales leadership in which they told us the same thing — that they would love to see us create one-to-one marketing plans for some of these accounts that recognized exactly where they were in the decision cycle," Martin said.
Step #1. Consult experts in the marketplace
Though the implementation of this account-based marketing effort didn’t officially take place until late 2013, the program was actually the result of customer prediction on the part of SAP.
Taking its annual business trends and seasonality into account, SAP saw that the same handful of heavy-investing customers kept returning again and again.
After discovering this, the SAP team knew they needed to find a way to personalize the marketing experience for these select accounts. However, before the team started on the account strategy, they conducted research.
"One of the things that we did was we went and sought some experts in the marketplace on the topic of account-based marketing," Martin said. "We also had some colleagues internally that had run programs like this elsewhere, and they were helpful, too, in putting together the program infrastructure and guidelines."
This approach helped the team analyze SAP’s operations and define the upcoming account-based marketing model, Martin said. It also gave the team a chance to build out what specific steps they would need to take.
Step #2. Create the internal business case
With this expert-approved plan tentatively in place, the SAP team then started creating a business case for higher-level decision makers to approve.
"It was really a redeployment of budget. It had been used for other priorities within the company. And we needed to make a strong enough case so that budget and some headcount could be redeployed through this ABM program," Martin said.
In constructing this business case, the SAP team made good use of SAP’s already impressive marketing reputation.
"We do a very good job here at SAP of tracking marketing activity through [the] pipeline and then all the way to closed revenue. So we can quickly tell by using our CRM software if marketing initiated an engagement with a potential customer or an existing customer that then turned into revenue down the road," he explained.
However, SAP also needed to gain buy-in from its customers. One of the strategies the company employed to accomplish this was to work with select customers to create a marketing plan. Customers have plenty of influence on the creation of this plan, Martin said.
Step #3. Add customers to account-based structure
Once the account-based program was proposed and approved, the team then started narrowing down its selection of customers that would best fit this program. There were several reasons why SAP was selective in choosing those first customers to add to the program.
"We didn't start out with all of the accounts right away because we knew we had to build the infrastructure and build out how we would approach some. So we started initially with five accounts, and now, two years later, there are 55 accounts that are in our program," Martin said.
When selecting accounts, the SAP team considered three factors.
First, the growth potential of each account. For this aspect, SAP looked at an account’s long-term growth potential as opposed to merely looking at the current calendar year, he explained.
Next, the team considered which contacts in the customer organization the SAP sales team would be able to introduce the marketing team to.
Finally, they considered what amount of cooperation Marketing could expect from the sales team.
"So, would they involve us in account-planning sessions? Would they have a regular series of meetings with us in order to ensure that we were course-correcting the marketing plan created for that specific account," Martin explained.
"If we had all three of those things lined up — the growth potential of the account, the access to the customer and then the regular cooperation with our sales team — then they would score high on a worksheet that we had developed. And that indicated that they were the right type of account for ABM," he said.
This dedicated system gave the SAP team a very clear set of expectations that were linked to ABM resources. Martin outlined a sample conversation a SAP marketing team member may have with an ABM-qualified customer:
"Marketing will provide you with a dedicated marketing plan for that account, funding to help execute against this plan and regular communications to your customer that will flow through you on the account team. In return, we need marketing to be included as part of the SAP account team, and we need regular access to a liaison at the customer," he said.
Step #4. Determine and collect customer insights
Martin points to the insights the team learned about its accounts as one of the main reasons for the account-based marketing program’s success.
"One of the things that's incredibly important to run an effective ABM program is to thoroughly understand who the players are within a customer and what kind of decisions they may have in front of them and in their future, and how marketing can support their evaluation and decision-making needs," he explained.
Through these account insights, he added, the team would do deep research across "one of these customers in order to understand more about who decision makers are, what drives their decision making process and how we might get engaged with those conversations."
The SAP team then used these insights and the customer information they learned during their research and business case stages to build out its bill of materials.
"We wanted to expand the bill of materials or the tactics menu that we could use through one-to-one marketing plans," he said.
According to Martin, the current bill of materials is similar to what would be found in many campaigns. There’s a digital component that features SAP’s site, social media elements, newsletters, webcasts, events and direct marketing.
"So when I list that bill of materials it sounds a lot like a traditional marketing tactics' mix. The difference here is that these tactics were then customized to be specific for that customer and were run as part of this individualized marketing plan," he said.
RESULTS
Though this approach only began two years ago, SAP has already seen impressive results from its account-based marketing program. SAP had created $27 million in new pipeline opportunities and progressed $57 million down the pipeline.
From this implementation, Martin and his team have developed a combination of goals that produces the best results.
"What we found is that the accounts in our ABM program usually have a mix of those two primary goals — accelerating existing deal cycles, or expanding the SAP presence within the account. It's not typically only one or only the other but there's some element of each," Martin said.
With such a complex sales cycle, he added, "Oftentimes a current deal cycle will occupy 100% of a very strong sales person's time and that's completely understandable."
With that in mind, one of the values Marketing can provide is to create new conversations and nurture continuing conversations.
"So three, six, 12 months down the road, the sales person then is able to benefit from the interest that we've nurtured over the course of those months."
From this effort, the SAP team has found that some degree of exclusivity is important.
"If you don't maintain exclusivity then what could very well happen is that you water down the program and instead of it being a one-to-one marketing program it winds up looking more like a one-to-few marketing program. If you try to treat everyone as special, then no one is special," he said.
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