Have you ever been to one of those delis with the signed pictures of celebrities all over the wall? Maybe they had a sandwich named after the most prestigious A-lister to dine there?
Those delis would have trouble surviving if they only catered to celebrities, right? But you certainly don’t get a sandwich named after you for a visit.
Well, one of the beauties of ABM is it can be used to treat everyone you do business with — big or small — like a sandwich-worthy VIP.
On today’s #FlipMyFunnel, special guest host Steve Watt catches up with Eric Martin, VP of Account-Based Marketing at SAP, to find out how a giant like SAP is extending their brand of exclusivity to smaller companies.
This #TakeoverTuesdaypost is based on a podcast with special host Steve Watt and guest Eric Martin. If you’d like to listen to the full episode, you can check it out here and below.
Exclusivity is the secret sauce
Steve: Can you give us an understanding of where ABM comes into play for SAP and your role in building that?
Eric: My role is VP of Marketing, specifically for the account-based marketing program in North America. Like a lot of mature enterprise technology companies in this market, we derive a very large percentage of business year after year from a relatively small number of accounts.
At the same time, our portfolio of offerings has grown. It’s really exploded in the last 10 or so years. So, the combination of those two things really made for a great business case here in North America, specifically, it’s a very mature market. There’s a large number of multinational companies that represent a high percentage of revenue for SAP and in North America.
About five years ago, we launched the program and decided that we wanted to market to those companies in a way that made it clear that we understood their business, that we were very familiar with them, that they were friends of ours and we saw new opportunities for them to take advantage of some of the newer offerings from SAP.
And that was the genesis of the program.
In North America, we cover about 50 accounts at a time. I know some of your listeners are taking ABM to a much wider set of accounts.
We are doing more of the one-to-one, one-to-few model across those 50 accounts.
That exclusivity has given us the ability to be more impactful with some accounts at the top of that pyramid.
A 300-company market-of-one
Eric: If you look at where SAP derives revenue currently, and then what are the growth opportunities for SAP, a lot of the growth for SCP is going to be with smaller mid-sized companies.
So companies that don’t own any SAP currently. It’s a place for marketing to play, but a difficult model, you know, when you have a lower win percentage and higher cost of sale and all of the things that make that difficult to pursue
One of the ways that the company has looked to scale and try to take that down in larger chunks is by engaging with private equity companies or venture capital firms and figuring out what’s the value proposition that SAP could bring to the parent organization of, in this case, a private equity firm.
This private equity firm has 306 companies and 63 countries, and they represented maybe 28 different industries. If you think about that composition of accounts, you’d be hard-pressed to say that’s a market of one, right?
There’s no industry commonality. There’s no SAP lifecycle commonality.
Our challenge was: Should we apply ABM? Should we think of treating them as a market-of-one?
We had a couple of things going for us. Very senior leadership in our company had worked with the senior leadership of that PE firm and we signed a master services agreement.
And that meant that across those 306 companies, they now all have the same buying power, even if they were a $5 million startup, they got the same discount when they purchased SAP software that a very large existing company might get.
How do you measure success?
Eric: There are 3 ways we look at our success with the ABM program:
- Revenue and conversion to revenue
- Deal size
Sometimes velocity and deal size can be in conflict. A deal will take longer to close if it’s a larger deal. We’re adding things over time.
And, sometimes, that’s the value of the ABM approach: growing a deal from something that could look transactional to begin with, to something that’s much more strategic or even transformational for some of our large clients.
So, those two things can be in tension, but as long as we are clear account by account what the objectives are, some combination of closed revenue to velocity and deal size are the primary ways that we look at the success of the ABM program.
What does this look like in practice?
Eric: The global account director came to us in April of 2018 and said, here’s the situation. Can you help me?
Like any publicly traded company that has a fiscal year that matches the same calendar year, we now had eight months or less to try to make some revenue with her out of this opportunity.
You need some velocity there because our sales cycles are oftentimes longer than that. So, there was a velocity play and all of this activity being as concentrated — and as targeted — as it was helped with that.
She had a revenue target that she defined as is very aggressive. And she was confident, but she was somewhat anxious about it, too. Anybody would be in that position.
The ultimate success of the program was such that, by the end of that calendar year, we had successfully taken down twice the amount of revenue that she was projected to bring in. We’re talking eight-figures.
It was a very significant amount of revenue. It was twice the amount that she was projected to bring in. And, as a result, she’s been promoted to a vice president, and there’s another global account director that has moved into this role.