How $2.5 billion Celonis used unconventional marketing tactics like sending 1,500 handwritten letters to win over big customers

Alexander Rinke CEO Celonis

Alex Rinke is cofounder and joint CEO of Celonis, a Munich-based process mining unicorn founded in 2011 and valued at $2.5 billion in late 2019.
'Process mining' is the use of AI and data analytics to assess and optimize business processes, like invoice processing or dealing with customer service queries.
Rinke spoke to BI about how he cofounded Celonis as a student, how it was forced to embrace amusingly unconventional marketing strategies, and who he sees as the firm's biggest rival.
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For all its usefulness to companies small and large, process mining might sound pretty mundane.

In the context of Celonis, a German data startup founded in 2011, 'process mining' is the use of AI and data analytics to assess and optimize firms' business processes, like invoice processing or dealing with customer service queries.

For example, Celonis might use its proprietary software to conduct an AI-based analysis of how a company processes its invoices, point out where the biggest inefficiencies in this process are, and establish how these can be reduced.

"Bastian [Nominacher], Martin [Klenk] and I were a group of three students who discovered this idea of process mining, and then we got an opportunity to apply our skills in a project that the university did with a business," Rinke explained on a call to Business Insider.

"That business wanted to improve their customer service helpline. They were inefficient; they took too long to get back to customers; they spent too many resources on not delivering good quality products.

"We were able to significantly help them. We reduced the time they needed to get back to customers from an average of five days, to getting back to 80% of customers on the same day."

'Godfathers never change'

Buoyed by this initial success, Rinke approached Hasso Platner, the founder of enterprise software giant SAP.

"He was giving a speech very close to where I grew up – I grew up in Berlin," said Rinke. "I heard about this speech and went there.

"He disappeared after the speech to the VIP area and stayed there for three hours or so.

"I waited there until he got out, and said to him: 'You've got to hear about Celonis; you're missing out.' I showed him some screenshots of our work and he looked at them and loved it."

Platner gave the young trio an intro to SAP, something that would contribute to the firm's success.

"When you come with a recommendation from the founder, you have a much better shot at being taken seriously," said Rinke.

In 2016, Celonis announced a reseller agreement with SAP that gave existing SAP customers direct access to its technology.

In November, it raised $290 million in a Series C funding round led by Arena Holdings and investors including Ryan Smith, the founder of customer experience specialist Qualtrics that was bought by SAP for $8 billion a year ago. The firm is valued at $2.5 billion.

Hasso Plattner

Back in those early, bootstrapped days, large customers, let alone large business partners, were a distant dream. Rinke and his cofounders knew Celonis's tools would best fit large firms – and yet, as is the law of the business jungle, large firms are the hardest to impress.

As such, they had to think hard about how to attract big firms' attention. The method they settled on was startlingly low-tech: they sent out 1,500 handwritten letters to every C-suite big shot under the sun.

"We thought, 'Each of them has an office and assistants, so we won't really get far by calling them'," Rinke said.

"So, the idea was that if we hand wrote letters, we would actually get to the senior executives, because if they receive a handwritten letter, it could be their grandmother; it could be somebody really important or a personal emergency or whatever.

"And it worked – people really did open the letters. I mean, you send out 1,500 letters and you win maybe two or three Fortune 500 clients. It's not a huge number percentage-wise, but it's pretty meaningful."

Soon enough, these left-field marketing tactics became something of a specialty.

'Harley Davidsons aren't that expensive – they're just really, really cool'

In one instance, the company offered up a Harley Davidson bike, which starts at about £7,000, just to attract potential customers.

"We did that [sort of thing] more often, actually, and it was quite funny," Rinke continued. "We had the smallest booth at a massive conference – it was maybe 22,000 or 23,000 people – and people were literally queueing up in front of this tiny booth because they could win a Harley Davidson.

"When you think about it, Harley Davidsons aren't that expensive – they're just really, really cool. We got permission from the conference to bring it in, which I didn't expect at all, but once we had permission, it was just so cool."

Celonis soon took off with the speed of a motorbike. Its customers today include Uber, Vodafone, and Cisco, as well as numerous firms from outside tech like L'Oreal.

"I think our set of competitors will evolve," Rinke said. "But, right now, our biggest rival is the status quo. What I mean by that is people doing things manually or just trying to throw RPA (robotic process automation) at processes they don't even understand and haven't analyzed."

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