Savannah, Ga. — SAP AG (NYSE: SAP) has committed to investing 10 per cent of its small and medium-sized enterprise (SME) revenue in North America in marketing and is overhauling its marketing approach, but the shift to a partner-led marketing model isn’t getting a thumbs-up from all partners at the vendor’s 2011 Channel Partner Summit.
Partners have long complained about SAP’s marketing efforts in the midmarket, and SAP executives have echoed the concern, saying their biggest challenge has been educating customers that SAP isn’t just for large enterprises, but is an SME player as well. Once they get in the door, partners say they can take it from there.
“We’ve been doing a crappy job telling our story to the market,” said Jeff Stiles, SAP’s senior vice-president, solution marketing. “There is a lot of technology innovation coming. We need to simplify how we speak to customers.”
The business software vendor is looking to address those concerns with a complete overhaul of its marketing organization said Kevin Gilroy, senior vice-president of SAP North America. Michele Weber has been brought in as vice-president, North America ecosystem and channels marketing, to lead the changes, which will be backed by a commitment from SAP to devote 10 per cent of its SME revenue in North America to SME marketing.
Among the new programs is revamped virtual agency for self-service turnkey marketing material creation, and SAP is also looking for service providers for a marketing service bureau. Tiers of service will let partners chose the level of assistance they require based on their own marketing expertise. Stiles said partners aren’t leaving market development funds (MDF) on the table; he’s looking to help them leverage those dollars more effectively.
“Partners are telling us they want to hunt their own meat,” said Gilroy. “We want to help them build their own demand engines so they’re not relying on SAP for leads, and our marketing teams are working with them on that.”
Conrad Mandala, SAP’s national vice-president for SME, added with the channel maturing SAP and its partners want to move from SAP feeding leads to a system where partners build their marketing skills to develop their own leads.
“It’s teach me how to fish. It’s a huge transition. The growing partners are putting more senior marketing people in their organizations,” said Mandala. “SAP has tons of resources for them to leverage. The hard part is pulling it out of SAP to leverage it properly. A lot of what we’re doing is programs to help partners leverage our partnering tools more effectively.”
Marketing in the midmarket requires a different approach than enterprise marketing, said Mandala. The “best run companies” signage campaign builds brand recognition, but in the midmarket, while name recognition helps, customers are more interested in the experiences of their peers.
“SME customers want local partner touch and local expertise, and references are more important,” said Mandala. “We’re syndicating content and creating blogs that drive customers in the SME to say I’ve used SAP before, here’s how it worked for me.”
This reference-based, proof-point, industry-specific advertising is what SAP is trying to drive, said Mandala. Social media is also a key piece of the mix.
The new marketing philosophy has generated a mixed response from Canadian partners. Michael Pearson, president of Toronto-based Contax Inc., said he welcomes the shift to a model that will see partners build the capacity to take on lead generation themselves, with support from SAP.
“Partners can do a much better job of marketing than SAP can; we can do better,” said Pearson. “SAP does a good job providing us the resources. It starts with MDF; it provides us opportunities to execute on. It’s incumbent on partners to apply their MDF and use the programs SAP has created.”
Illumiti of Richmond Hill, Ont. also welcomes the shift to partner-led marketing, and COO Dror Orbach said the changes will lead to more effective collaboration between Illumiti and SAP on marketing campaigns.
“SAP needs to market the product, and we need to market our differentiation in the market and our ability to implement the product for our customers,” said Dror Orbach. “It’s a complementary message and it needs to go hand in hand.”
Illumiti president Nir Orbach added the partner has a limited marketing budget it focuses specifically on lead generation; he’d like to see SAP devote more resources to campaigns that specifically raise SAP’s brand awareness with midmarket customers.
“There’s a lot of room for improvement in that area,” said Nir Orbach. “We run into challenges in the sales cycle. Customers feel we’re likely to be too expensive, but that’s not the reality.”
The changes are getting a thumbs-down from Yves Néron, vice-president of sales marketing with Forgestik Inc. in Outremont, Quebec. He would rather see SAP continue to take the lead on lead generation.
“SAP wants us to give us the burden of lead generation, but on our side we want SAP to take it,” said Néron. “Marketing is expensive, and with the size of our market and revenue … we have a much more limited budget (for marketing). I strongly believe SAP should invest more in marketing and lead generation.”
MDF dollars help, but Néron said it’s very hard to earn and there’s just not enough. He’d like to see SAP put more money into midmarket advertising to the business community in Quebec and Ontario, where he said SAP’s brand awareness isn’t high enough. When they do know the brand, it’s an easier sale, but Néron said SAP’s SME message isn’t sinking in.
“They’ve done some ads which I’ve never seen running anywhere which say SAP isn’t too big for me, isn’t too complex for me,” said Néron. “We’ve got to some being the guilty guy. It’s not expensive to install, and it does install fast.”
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