This post provides additional background on the Industry and Influencer Relations (IIR) program that I introduced in an earlier post.
Through our research we have found that there are generally three factors of influence that affect any type of decision. In SAP’s case - three factors that affect a decision to purchase business software.
As an example, let’s say that you are the CEO of a $1m apparel company. Your product is fantastic, you have had great success and you want to expand your business. You have created a masterful five year plan to increase your apparel and accessory lines, create partnerships with manufactures and retailers, open up boutique retail stores, create an online retail presence, and increase investments in sales, marketing and of course top talented people.
Part of your plan requires investment in a business software solution to help you plan and optimize resources, manage HR, finance, etc.
So, where do you start? You are generally aware of SAP, Microsoft and Sage as vendors but you have no professional experience with any of them - with the exception of basic use of Microsoft office products.
With your limited awareness of these business software vendors you invest time in research and education to support your decision. You talk to peers in your industry – perhaps through a social network or an industry association; you do an online Google search for information and find research reports and relevant articles in business and trade publications; you may also identify and speak with an analyst or an industry expert for opinion.
The point is that you rely on multiple sources for insight, education and advice to support your decision – often times well before you even speak with a prospective vendor. In each case, you form an opinion based on the reputation of the vendor through others’ experience - where you have none.
Within the IIR team we have done the homework to understand where decision makers of business software solutions go for insight, education and advice to support their decision and how important those sources are in influencing the decision.
This insight is the basis for the design of the IIR team at SAP. We have identified and are actively engaging with the individuals – be they bloggers, academics, analysts, or consultants; virtual communities, associations, partners, and groups that have the highest impact on purchase decisions.
Our engagement model is multi-faceted.
The mission of the IIR team is to enable sales execution and accelerated adoption of SAP’s products and solutions. We do this by generating positive experience of SAP’s brand, products and reputation within strategic business and IT communities of influence that have a $44B influence on business software decisions, annually.
Below is an example of the influencers we engage with:
- IT Influencers: Industry analysts, developer community, consultants, and bloggers
- Customer Communities: User Groups and peer networks
- Universities: Leading business and IT universities (faculty and students)
- Business Influencers: High-profile business academics, gurus, authors, and social networks
- Partners: Top 20 SAP partners
I ran across a good definition of Influencer Relations some time ago which identifies the function as a systematic way to identify, measure and build bridges with influential people who impact customer perception.
By connecting with key influentials and influencer communities, our hope is that this team will deliver greater value to SAP by establishing influencer relations as a new marketing and communication currency for the business:
- As a catalyst to accelerate larger marketing and sales campaigns
- Through industry collaboration – by connecting senior executives with thought leaders for exchange of insight and our own need for education
- To provide coveted 3rd party validation and recognition of our business strategy, products and overall market leadership.
It is important to note is that there are generally three key aspects that characterize an effective influencer program (source AMA):
- The first involves building deeper, lasting relationships between the company and the influencers.
- The second entails finding specific ways to help every influencer become a vocal and active champion of the company.
- The third is to create a lasting dialogue of mutual benefit.
We are in constant interaction with our influencers and communities providing education and working with them as consultants, advisors and net promoters of our business and product strategy. Often times we engage with the intent to exchange valuable insights that ultimately influences each of our views.
We also look for every opportunity to expose our influencers to customers in an effort to channel the positive experience of our customers through the influencer’s interaction with decision makers both directly with prospects (as a service) or indirectly (through a blog, book, research report, or at a conference presentation) to support SAP’s position.
We have explored the business and governance model of each influencer group/community around this circle. Each has a very unique and powerful value proposition that factors quite heavily on their engagement with customers and ultimate impact on purchase decisions. As such, we have established equally unique engagement models to work with and mange the relationships and needs of each group.
We have gone even further to calculate the monetary impact that these influencers have on purchase decisions. This valuation is based on extensive research to understand how decision makers (with budget authority) engage with influencers to support their decision to purchase business software. The figures listed in the chart are based on the influence of SAP’s $75B market opportunity.
Here are a few examples of how we engage:
- IT influencers such as industry analysts and consultants make money by providing research, education and advice in which the demand is generally fueled by confusion in the market ☺ They educate customers and prospects through written research, presentations, 1:1 conversations, and through the media. Their expertise and established credibility in the market with customers, vendors, media and the financial community have established them as market makers. Our estimate is that these influencers have a 10B impact on SAP’s market opportunity of $75B.
Early engagement with these influencers allows bi-directional influence of our strategy. If managed successfully, these influencers will take ownership of our strategy and position. Their ‘ownership’ creates inherent advocacy driven through their own thought leadership platforms allowing them to provide greater insight, education and advice to potential buyers in the market which in the IT industry analyst example - drives business for them. We are creating win-win partnerships.
- Equal to the IT Influencers there are very important individuals, communities and social networks that have significant affect on the agendas of business level leaders in the c-suite such as the CEO, CFO, COO and GMs. These groups of decision makers have very specific needs when it comes to looking at trends in their industry be it retail, banking, or any of the many manufacturing vertical markets. We have identified the people and communities that drive thought leadership and consult with business decision makers at the highest levels. Our engagement model here shares many similarities to the way we engage with IT influencers: early and constant.
- Customer communities and peer groups have the highest influence on purchase decisions, largely based on the credibility of their experience (as customers) using and implementing our solutions.
As previously mentioned, there are 30+ SAP User Groups around the world that represent about 80% of our installed base of customers. One-by-one we are building powerful relationships with these communities which vary in size from the 2000+ companies that make up the Americas User Group, to the 250+ SAP customers that make up our user group in Brazil. What is interesting about the group in Brazil is that this relatively small number of member companies (SAP customers) represents well over 60% of Brazil’s GDP. This is an impressive statistic that underscores the power and influence of community – no matter the size or geography.
Peer groups (in large part) exist because they want to be heard and ensure that their interests are well represented in corporate and development priorities and decisions. They want to show their ability to wield influence and affect policy and engagement. They also gather for the very important purpose of networking and sharing best practices.
Significant challenges quickly come about if a company ignores or mismanages these important groups – that are organized by a shared purpose of influence. The biggest being backlash in media and affects of negative word of mouth that can be viral and destructive if not well managed.
- Partners wield significant influence on customer purchase decisions. As much as we would like, our customers’ IT landscape are not homogeneous. Our customers and prospects work with and rely upon a number of IT vendors to support their success. The Partner Communications program is designed to support SAP’s most strategic partners and partner programs that fuel the highest revenue opportunities within SAP’s ecosystem. Our objective is to gain maximum communication value out of these partnerships by executing joint and integrated (with the partner) communications campaigns to drive thought leadership, awareness, and general education of the joint value – allowing SAP the opportunity to ‘catch draft’ off of our partner’s invaluable brands and activities - and vice versa.
- Universities play a very unique and important role in the ecosystem of influence. They are in fact the most strategic community around this circle. With an understanding of the power that ‘experience’ has in influencing decisions - the purpose of the university alliance program is to build SAP experience into the next generation of business and IT decision makers and leaders - at the core of their pre-professional education. We do this by providing universities with access to SAP systems for teaching and working with them to develop business and IT curriculum. The program generates skilled graduates that help to secure the investments of SAP customers and partners (as they are hired on). These students will also evolve to become important IT and business influencers and thought leaders in their own right - which fuels the circle of influence.
If there is interest, I will provide (with appropriate detail) additional case examples and engagement scenarios associated with our programs.