SAP Goes All Out The German software giant updates its image. Will it work?
Jennifer Gilbert 06/12/2001 issue

You're the third largest software company in the world. You've been around for 28 years, creating an assortment of business-automation programs for an impressive roster of corporate clients. But you have a peculiar name, and there are younger corporate managers and purchasing agents who have barely heard of you or, worse yet, regard you as stodgy and unhip. You're losing market share to companies that have done a far better job of selling themselves. What to do?

Hasso Plattner, the co-founder and co-CEO of SAP, decided to embark on an estimated $100 million global advertising initiative, entrust it to a savvy U.S. marketing executive, and move the company's global marketing effort a continent away-from the corporate headquarters in Walldorf, Germany to New York's Greenwich Village.

The new digs, which opened in March, stand at the edge of the dot-com ghost town known as Silicon Alley. Inside a hundred-year-old former printing factory, a buzz of activity fills 35,000 square feet of blond wood floors, frosted glass partitions, and brushed steel railings. And recently named executive vice president and global chief marketing officer, Marty Homlish, is a fount of energy and optimism.

"We had a company that made sensational solutions but had not told its story in a compelling way," says Homlish, a former marketing executive at Sony. When he came aboard at the beginning of last year, Homlish realized that he faced a challenge. "The perception was that we were late and that we were not a major player in the ebusiness space," he says.

A botched launch of its late-to-market ebusiness strategy, mySAP.com, left the company looking like a has-been in the era of Internet-based commerce. The advertising was cryptic and confusing, partly because the product was cryptic and confusing. MySAP.com extended SAP's client/server-based R/3 back-end software to include Web-based front-office applications, attempting to tap into a new market and, at the same time, to sell more wares to its existing customer base of 13,000 companies.

Unfortunately, even according to SAP representatives, mySAP.com was not just one product but many (an electronic marketplace and an assortment of individual applications) arbitrarily grouped under a single name. That misstep left open a window for Oracle and other rivals to gain ground with aggressive advertising.

Under Homlish's leadership, however, SAP has adopted an in-your-face marketing style. By conveying a more cutting-edge image ("It's not your father's SAP," Homlish and his fellow-managers like to say, paraphrasing those hipsters at Oldsmobile), the company hopes to reclaim lost mind- and marketshare. The strategy is to hammer the brand name, and the new image, into the heads of executives whose companies aren't yet SAP customers or which might be due for an upgrade.

Whether Homlish and SAP have found the solution remains to be seen. Historically, SAP took an if-we-build-it-they'll-come approach, in which marketing was an afterthought. The new advertising is "clear, concise and more serious...because we're in a serious business," says Homlish, a 47-year-old marketing veteran. "One of the things I learned at Sony is you have to be consistent in your messaging and tell the world what you're doing. The customer has to know why they should make an investment in your product. If they need a decoder ring to figure out what you're doing, you're not communicating well."

The effort is worthwhile, says Elizabeth Goodgold, CEO of the San Diego-based branding firm, the Nuancing Group. Even a business-software vendor, she reasons, needs to employ consumer-marketing techniques to extend its appeal. Like ordinary consumers, executives who make purchasing decisions are sitting at home watching golf or walking through airports. "The lines have blurred between consumer and businessperson," Goodgold says. "There's no good on-and-off switch."

Brand awareness is essential, she adds, for back-end systems developers whose products are both costly and complicated. "Branding is not logical," says Goodgold. "Sometimes it's the subtle nuances that cause someone to pick one company over the other when making a purchasing decision."

And sometimes it's the not-so-subtle message-the logo plastered to the front of a roaring Formula One racecar, for example. SAP sponsored a Grand Prix Formula One racing event in Indianapolis this year and plans to do so again in 2002. Homlish also means to maintain the company's new emphasis on its history and well-known client base, which includes ExxonMobil, Keebler, and Nestle. In recent ads, the company has jettisoned a series of famously ill-fated taglines (including "city of e" and "mySAP.com. You can. It does") in favor of a more straightforward slogan: "The best-run e-businesses run SAP."

In April, it carried that message to the Internet & e-Business Conference & Exposition in New York, where SAP unveiled its mobile exhibit platform-a 53-foot tractor-trailer that houses an Imax-like movie, several big-screen informational kiosks, and a private conference room. A common exhibition ploy among software and technology companies, the truck was a huge departure for SAP. A year earlier, at the same conference, its low-profile booth was dramatically overshadowed by more conspicuous presentations made by Oracle and other competitors.

The Toughest Pitch

Want to advertise something that's complex, intangible, and difficult to explain? Software, for example? Or consulting services? It can be done. Here are five basic principles to bear in mind, according to James Dettore, president and CEO of the Miami-based Brand Institute.

1. Make the name of the company or product an important element of the advertising. Avoid a name with unfavorable connotations. Make sure the name is pronounceable. "The worst thing is to have people not talk about your product or service because they are intimidated by the name," he says.

2. Bear in mind that no name can say everything about a company. That's where ad campaign creativity comes in to play. "Use the design of the ad to help enforce the vision of the company or the company's product."

3. Pick an effective tagline-this is vital. "The tagline must be brief enough to powerfully enforce what the product is and how it benefits the target audience." Dettore points approvingly to Apple Computer's "Think Different" and Ford Motor's "Quality is Job 1."

4. Choose the medium best suited to the message. If a company has a complex story to tell, television can be ideal. More simple and concise ideas fare better in print publications or on billboards.

5. Don't try to be all things to all people. "It's better to focus on a key selling proposition, such as product, service, or price."

SAP is on the right track, says Dave Boulanger of AMR Research. But the company has a way to go. "Moving global marketing operations to New York was great because the brand message needs to be U.S.-driven," he says. And while the current ads do a better job of promoting the company's dominance in certain vertical market segments, Boulanger would like to see SAP make still more of its history-its biggest and most distinctive asset, in his judgment.

A new round of advertising, to be unveiled this spring, will seek to position SAP in the "New, New Economy," says Michael Baldwin, senior partner and worldwide account director at Ogilvy & Mather, which created the campaign. The idea, he says, is to portray SAP as a company whose products make companies profitable and efficient.

But SAP still needs to find a more effective way to make that case, Baldwin adds. "What we want is a sober respect for the brand, SAP, as the leading ebusiness solution provider," he says. "That's not going to happen overnight." In the meantime, SAP will "consistently do marketing that hammers home that message."

Goodgold sees a need for more drastic changes. The company, in her view, would do well to consider a name change or, at least, a simple English-language meaning for its name. Sponsoring a car race is all very well and good, she argues, but "I talked to someone in Indianapolis who said, 'What the hell is SAP?'" (At least the name is becoming more familiar, and people are wondering what it means, counters Herbert Heitmann, SAP's vice president of global corporate communications.)

SAP's new "New, New Economy" tagline is "old, old, old," adds Goodgold. The company should "get back to fundamentals," she urges. "Change the name, figure out how they are different from everyone else, and then find an image, something that no one else is talking about-the same way that Folger's talks about its mountain-grown aroma." And go easy on the buzzwords, she counsels. "Otherwise, SAP will just blur with their competitors."

 

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