CHALLENGE
When SAP decided to move beyond its traditional customer base of huge enterprises and to target more small- and medium-sized businesses, this presented a big task for the marketing team.

Marketing and sales activities were primarily built on personal relationships between sales reps calling on individual companies and each country having its own methods of generating leads and closing deals. But this relationship-based, local approach wouldn't work well for the SMB market.

“We had to change the marketing approach,” says Edward Brice, VP Marketing Programs and Campaigns, SAP. “Ultimately, we have to drive a significant volume of inquiries, prospects and leads to meet the business targets we have over the next three to five years, and we have to do it with decreasing costs.”

In their quest for more efficient marketing tactics, Brice’s team realized they needed to adopt a standardized global and automated approach. At the same time, though, this top-down strategy couldn’t ignore the different market conditions found in each country. They needed a way for global marketing campaigns to still address prospects’ needs on a local level.


CAMPAIGN
Faced with the two extremes of a totally centralized, global marketing approach and one that was completely planned and executed at the local country level, Brice’s team decided to find balance in the middle.

Their solution was to create regional demand generation hubs that used a global framework to design, implement and track campaigns but left room for key members of local sales and marketing teams to adapt those models to the unique needs of their market.

Here’s how they established a regional marketing hub for Europe that tested the concept and ran a pilot campaign in several countries:

-> Step #1. Standardized campaign model and implementation system

To create a regional marketing hub, Brice and his team first had to develop a global model for lead generation campaign development, implementation and reporting that could be adapted and launched by the regional marketing team.

That model focused on three key areas:

- Content and creative elements. The goal was to have a global team develop 80% of campaign assets and media types that would be used region-wide, leaving room for local teams to develop 20% of the content based on local market factors. The global marketing team established standard program designs and offers that served different objectives.

For example, a standard campaign design was created for targeting SMBs in mature markets, such as the United Kingdom, and another was designed for emerging markets, such as Poland.

- Implementation methods. Moving away from the personal, locally-based nature of SAP’s previous marketing, the regional hub established techniques to deliver more automated, scalable implementation methods, such as Web-based lead generation campaigns and telemarketing follow-up.

- Reporting and analysis. Rather than each country handling its own tracking and reporting systems (often resulting in disparate data collection), the regional hub centralized IT and reporting systems to handle end-to-end tracking of campaigns and analysis of the results.

-> Step #2. New organizational model to staff the regional hub

A regional hub needed the right mix of people to execute global programs that still reflected the business realities of the local market. This meant relocating key marketing and salespeople from around the region into one, central office in Europe.

The team placed the regional marketing hub in Barcelona, where SAP’s telesales operation was based. The move not only made use of an existing office, it helped offset potential disconnects between a regional marketing office and the day-to-day sales activities within each country.

“Once we had sales guys and marketing guys sitting side by side, the speed to adjust to the demands in the field increased dramatically,” Brice says.

The division of marketing duties were divided into:
- Global: The global marketing team in New York identified business opportunities, developed programs and offers, established campaign standards and developed creative elements.
- Regional: The regional marketing hub adapted those programs, planned and designed specific campaigns, and executed campaigns.
- Local: Local sales and marketing teams in the individual countries provided campaign support, particularly in adapting content to resonate with the local audience.

Typical local tasks included:
o Reviewing translations of globally-developed content for relevance and clarity in light of unique words and phrases
o Customizing search engine optimization to reflect typical search terms in local markets
o Proposing specific offers that work well in their markets that could be plugged into a global campaign framework

In addition to campaign-specific communication, the regional hub also conducted regular meetings (in some cases, weekly) with local marketing and sales teams to understand their demand-generation requirements: How many inquiries do they typically need to create X number of leads? How many of those leads turn into prospects? How many of those prospects become sales?

-> Step #3. Trial campaign tests hub effectiveness

Brice’s team needed metrics to support the business case for a regional marketing hub. This meant launching a trial campaign to determine whether the new system could deliver better results in a more efficient manner.

The campaign tested online and offline elements, combining Web response and telemarketing. They also tested different offers intended to encourage response:
- Search and banner advertising sent visitors to a landing page.
- Landing pages and related product pages included an invitation to call and speak directly to an SAP sales rep.
- Offers were split between a hard offer (free consulting services to customers who bought a product) and a soft offer (white paper download).
- Direct mail pieces were sent to existing customers and prospects.

The regional hub provided the content and designed the channel strategy but used local marketing staff in the individual countries to adapt the campaign for their own markets.

Typical changes included:
o Slight tweaks of marketing copy based on local translation needs
o Minor changes to online elements, such as the button ad on landing pages that encouraged visitors to call the telesales team (for example, Spain wanted a photograph of a female sales rep in the icon, while other countries were fine using a man’s photo)

-> Step #4. Regional hub analyzes data from each country

Finally, all metrics were collected at the regional and local level on a new, integrated system that standardized the data sets captured. Then, data from each country was analyzed together to determine campaign-wide results.


RESULTS
The regional hub is delivering on its two primary goals: efficiency and effectiveness. SAP was able to cut the campaign development cycle time in half, and the overall marketing expense to revenue ratio improved 40% to 50%.

Conversion rates for the regional campaign also improved over local efforts, delivering a 33% increase in target to opportunity conversions. “We’ve been bouncing around regional models for some time. I think we’re finally hitting on something with the right approach, the right level of management support and right level of measurement and metrics,” Brice says. “A lot of things are coming into play at the right time, and this looks like a sustainable model going forward.”

While not disclosing specific metric for campaign-specific deals, the pilot campaign is already delivering some interesting insights that will likely influence techniques for regional marketing going forward.

For example, when looking at results for the hard offers vs the soft offer, Brice’s team saw that hard offers generated fewer responses from prospects overall, but those responders were more likely to end up as closed deals. By contrast, soft offers delivered a higher response rate, but more of those responders fell out of the sales cycle and weren’t as likely to lead to sales.


Useful links related to this article

Creative samples from SAP’s regional demand generation hub approach:
http://www.marketingsherpa.com/cs/sap/study.html

MarketBridge, the sales and marketing integration vendor that helped SAP develop its regional marketing hub:
http://www.market-bridge.com

SAP:
http://www.sap.com