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Vendor values loyalty

October 2, 2006
Vendor values loyalty. Check it out:
(Microscope Via Thomson Dialog NewsEdge)
For a company that has lacked predictability in its move to direct sales and has, by its own admission, has been less than easy to do business with, Hewlett-Packard is once again asking partners to display undying loyalty to the brand.

A year after launching the Preferred Partner Programme (PPP), HP seized the chance at its EMEA reseller Smart Energy conference to warn those not hitting growth targets or undertaking specialisations that their time iwas up (see last week?s MicroScope).



Conversely, the vendor promised resellers that were certifying staff for 2007 and matching or exceeding growth targets, including those for attach rates, that it would show loyalty in return through increased compensation, lead generation, co-marketing activities and go- to- market tools.

The loyalty mantra was best encapsulated by the creation of an elite Gold tier in the PPP, to which HP will invite the top 10ten to 20 per cent of the current 4,800 accredited resellers across EMEA.

Though exact details are to be defined in November, HP will expecwant Gold members to comfortably up-sell and cross-sell, use co?-marketing to drive demand, exploit the Smart Tools suite and have Certified Professionals.

Tom Yeates, sales director for corporate and enterprise at HP?sthe solutions partner organisation (SPO) EMEA at HP, told partnerssaid: ?[We also] expect a large share of your business,? Tom Yeates, sales director for corporate and enterprise at HP?s solutions partner organisation (SPO) EMEA, told partners. ?[Resellers] committed to HP will get increased compensation and joint customer engagement.?

Gold partners will be appointed from June 2007 and all should be up and running at the start of 2008.

Edward Kenny, Computacenter business unit director for end user hardware, said it was a natural progression for PPP.

?We would be very keen to be part of it,? he said., ?Ooverall, HP has talked about loyalty and the Gold [tier] is a way of encapsulating that.?

When asked about HP?s practice of circumventing resellers in certain enterprise markets, he added t: ?The direct business ?is what it is? and insisted there waswe have ?less conflict now than we did in the past.?.

Others were not so sure about the benefits of a Gold level status, voicing and revealed concerns that committing a higher proportion of sales to one vendor would dilute their agnosticism.

Impartiality is not the only concerns resellers have about the Gold PPP, as they have also warned that an additional tier cwould weaken the remaining scheme. B but Sean Gallagher, development and sales programme director for SPO at HP EMEA, didid not expect this outcome, claiming the.

?The objective wais ?not to dilute the programme but to have an internal deck of partners dedicated to HP.?.

However,

But Abdul Terry, marketing director at Equanet, was awaiting more details with some scepticism. ?We are not convinced it has real benefits apart from short- term compensation forto being a Gold partner,? he said..?

Some resellers claimesaid the creation ofcreating a new tier offeringing extra compensation packages increased complexities of the PPP and demonstrated the paradoxical strategy employed by HP. ?It wants a smaller, quality channel with more loyal partners, but with everyone in it,? said one source.

Partner consolidation does appears to be on the radar at HP but the vendor claimed to have given resellers had been given all the opportunities to fall in line during the plast year.

HP?s Gallagher said its remaining partners that remain in 2007 could expect improvements in OPG turnaround times ? which in 2007- which used to take up to four days on average before the Smart Suite was introduced this year ?? and lead generation in 2007.

?[With regards to special] pricing, if we could have fixed this a year ago we would have, but Smart Quote was tougher [to implement] than we thought and we were naive to think we could roll it out quickly,? Gallagher said.

In the UK, HP receives 800 requests a month for quotes, half of which are turned around within four hours, but that percentage needs to increase to be between 80 andto 90 per cent, said Gallagher, adding ?over the next three months you will see turnaround times would get better in the next three monthsgetting better?, he added.

On demand creation, HP is piloting Smart Leads in Italy and Austria and heGallagher said qualifying leads and passing them to the correct partners was ?not as easy as it sounds [but] next year we will roll out the machinery to help with that?. HP is piloting Smart Leads in Italy and Austria.

The Smart Finance leasing programme is also expectedon the way in the next year, which and Gallagher said this would help accelerate sales and as customers ?were not getting stuck on the capital price, it increase the average sales order?.

In the plast year, HP has spent $200m on reseller compensations across EMEA, and partners whichthat show ?loyalty? in 2007 can expect increases in pay for results (PFR) for attach, receiving an extra 15 per cent for hitting 80 per cent of the target and a further 15 per cent for 100 per cent.

There awere fewerless compensation schemes for resellers to manage than 12 months ago, said according to Gallagher, but he is aware that s said. ?[But] I know some of [resellers] don?t like the [PFR] targets so it isand we are ?trying to improve the quality of target setting.?.

Loay Lawrence, commercialsales and marketing director at Vohkus, said attach rate calculation was ?getting easier? but he would like to see more branding of the PPP to users.

Having spent $100m on co?-marketing since last September, with on 10,000 individual campaigns benefiting, HP willwill make more funds available, althoughbut resellers will not be able to use the money as they did in the past.

?It is not your Ggod- given right to receive marketing funds? the more measurable [your campaign] the more money we will invest,? said Gallagher said. HP has employed a marketing agency MCA to customise promotions for large resellers.

For all its faults, HP is at least consistent in wanting to work with fewer committed partners

Copyright 2006 Reed Business Information - UK. All Rights Reserved.


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