SAP vs Salesforce : Which Utilizes Its Marketing Spend More Efficiently?
SAP (NYSE:SAP) and Salesforce (NYSE:CRM) are both giants in the enterprise software domain. Salesforce, the dominant player in the CRM domain, has seen impressive growth in each of the past few years, primarily driven by new customer additions and diversification of offerings. SAP is also a leader in the CRM space, in addition to the Enterprise Resource Planning and Supply Chain Management fields.
Given the business models and product offerings of the two companies, sales and marketing is crucial for their top lines, as it plays an instrumental role in bringing new clients. Both the companies allocate a significant amount to their sales and marketing activities, as shown by the table below.
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SAP generates more revenue for each dollar that it spends on its marketing costs, though much of that is due to the fact that it offers bundled packages to customers. On the other hand, Salesforce is a comparatively newer company, and see rapid year-on-year growth. Accordingly, it needs to spend heavily in sales and marketing activities in order to generate interest and grow its customer base. Salesforce has managed to see improvement in its revenue per sales and marketing dollar spent, while the same figure for SAP has declined.