On the 1st of October SAP announced that it had entered into an agreement to acquire Emarsys, an ‘omnichannel customer engagement [market] leader’. The recent IPO of Qualtrics discussed in another IgniteSAP article had led some commentators to suggest that SAP was reluctant to pursue the further development of offerings in the overlapping areas of CDP and CX, but this acquisition along with SAP’s ongoing majority share in Qualtrics presents a fairly strong case against that.
Emarsys is a cloud-based platform whose clients include brands such as Samsonite and Nike. It delivers multiple-channel customer-centred marketing using automation to reach the widest possible group of potential customers.
Emarsys, which was founded in Vienna, Austria in 2000, has grown to a relatively modest 800 staff, but with roughly 1500 customers globally and a current annual revenue of $100M. After two rounds of financing, prior to the acquisition agreement Emarsys had raised $55.3M (just over 47M Euros).
Simultaneous personalised marketing across many channels (advertising, personal email, in app, SMS text, web and direct mail) is notoriously time-consuming and Emarsys is a platform that is designed to ease the workload for marketers that would otherwise become unmanageable, due to the number of possible points of contact which require personalisation.
The platform achieves this through data analysis of points of contact with individuals and also divisions based on industry specific market sectors and further segmentation. Automation of multiple marketing channels is then achieved and regulated using AI.
This avoids the classic marketing fault of overextending activity to people who have no need for a product or service, and streamlines the process of moving potential customers toward actionable outcomes. Existing customers are given opportunities to engage with a brand based on previous behaviour, and business impact data provides an overview of which campaigns are working. One Emarsys customer, Gymshark famously reported profits increases from £1.1M in 2016 to £18.6M in 2019. Although this success cannot be traced solely to the use of Emarsys, Gymshark is known for innovative marketing and their use of Emarsys is a good endorsement.
Bob Stutz, president of SAP Customer Experience explained the benefit to SAP of the acquisition:
“Customer engagement technology has evolved tremendously over the past decade, and in that time, Emarsys has emerged as a world-class platform that truly enables personalised, one-to-one digital interactions between brands and customers across all channels… With Emarsys technology, SAP Customer Experience solutions can link commerce signals with the back office and activate the preferred channel of the customer with a relevant and consistently personalised message, allowing customers the freedom to choose their own engagement.”
Identifying a customer’s preferred channel of engagement is essential in order to perpetuate hassle-free communication. This is one of many elements of marketing strategy that can be automated with the platform.
SAP’s intention to integrate the Emarsys customer engagement platform into S/4HANA and the Experience Management technology of SAP and Qualtrics goes beyond the recognition of Emarsys as a successful way to deploy marketing strategies. Customer data platforms can contribute to a profound understanding of the markets themselves, giving valuable insight into what is required of a product or service by the customers, and as such can influence the development of a product or a business over time, and drive substantial growth.
“The success of brands worldwide depends today on their ability to offer a compelling customer journey and to cater to the individual expectations of customers. To meet these expectations, front-office data must be integrated with back-office capabilities and with individual customer feedback. Once the transaction closes, SAP will enable brands to connect every part of their business to the customer, including experience data. We will deliver a portfolio for a ‘commerce anywhere’ strategy allowing for hyper-personalised digital commerce experiences across all channels at any time.” [Christian Klein SAP CEO]
This conceptualises marketing to individuals as a productive two-way conversation (rather than a ‘brand narrative’ to be projected out on the world) and can lead to enhanced value in interactions between customers and businesses. ‘Commerce anywhere’ is the logical progression of basic marketing whereby the number of actions required of a customer in order to buy a product is reduced so that all customer contacts are both advertising and an opportunity for a transaction to occur. This is combined with customer interactions that are tailored to their individual profile beyond normal demographic classifications. A founder and Chief Innovation Officer of Emarsys, Hagai Hartman put it like this:
“Success in today’s market relies on brands delivering personalised experiences powered by a holistic view of each consumer that connects digital engagement data with supply chain data in real time.”
David Raab the founder of the Customer Data Platform Institute, commenting on the acquisition, said:
“SAP has marketing capabilities but isn’t really known for them, and they are more oriented to B2B than B2C — the deal definitely fills a gap for them. I’d love to know the price – it cannot have been cheap.”
SAP’s head of strategy for Customer Experience, Adrian Nash, said that the acquisition was a ‘natural fit’ for SAP customer experience application suite. SAP’s CDP development has accelerated over recent months and due to the coronavirus E-commerce has increased by 50% as commercial premises have been forced to close, causing more online interactions.
The senior vice president of verticals at Emarsys, Alex Timlin said: “CEOs now can see clearly how crucial it [CDP] is to driving digital e-commerce revenue this year when retail businesses were closed. They also see how digital channels in general drive customer loyalty and higher lifetime value over the course of an engagement.”
Although the period of lockdown is temporary the degree to which a business engages with customers digitally is likely to increase over the coming years and CDP, and personalisation of engagements, are becoming more important. In fact the wealth of information provided by modern customer engagement is almost overwhelming unless strategies are in place to facilitate interpretation of this data. As these methods are integrated into S/4HANA the opportunity for mutually beneficial exchange of information at each point of contact, exemplified by Emarsys will not be lost by businesses invested in SAP, who are intent on turning CDPs and CX into precision tools for commerce.