Lenovo’s focus on channels is driven by the need to develop a core channel partner ecosystem in India, similar to that of Lenovo’s highly successful model in China. The company considers channel partners as partners in profit and works towards fortifying its channel relationship and nurtures it as a long-lasting, mutually beneficial bond.
The company believes that the marketing strategy will always have to be tailored according to the strength or channel structure in that market. It also believes that channel is the key route to marketing. Enhancing store presence and visibility leads to an effective implementation of marketing strategy. And to marketing through the partners is also another way to reach out to customers.
Lenovo has broadly divided its channel set up into three divisions-relational business, SMB, and consumer/home business. Each of these divisions have a separate channel head. Relational business is headed by Rajesh Dixit, SMB by Sharad Verma, and consumer/home business by Dinesh Nair. Each of these heads is responsible for its respective division’s workforce to a large extent-including appointments, target assignments, relation building, channel execution, delivery, rebates, and programs.
The channel head for relational business is responsible for overall contribution from the channel team through indirect business to be in line with the channel strategy. Under the channel head, there are regional channel managers who are responsible for nurturing and retaining Lenovo’s top partners based on their performances. They also take care of streamlining business efficiencies and are responsible for enhancing the overall indirect process. Their key function is to ensure profit through channels and play a critical role in channel expansion to generate more business, thereby increasing marketshare. “Lenovo is keen on increasing its marketshare through channel expansion to ensure all our products are available and accessible to consumers in remote regions as well. To keep up with our goal of increasing our marketshare in the large enterprise space, we have a specific model called LE Think Large to cater large enterprise accounts in India,” said Rajesh Dixit, director, relational business, ThinkClassic Product Group and Channel, Lenovo India.
The channel head for SMB is responsible for managing all the channels or verticals which include the SMB Regional Distributors (SRD), VARs (Value Added Resellers) and retail. Then, there are national distribution managers who are responsible for managing tier-1 distributors in terms of their target setting, productivity, execution, and delivery. Further, there are regional channel managers who are responsible for doing a sell-through from distributors to the verticals in their regions. Besides, the company has also appointed Feet-On-Street (FOS) unit, which is responsible for selling partners’ stock to customers. The FOS unit reports to regional channel managers but comes under the payroll of a third-party.
“Lenovo’s go-to-market strategy is designed to have product wise exclusive distributors. For our ThinkPad products, we have 3 national distributors and 1 regional distributor in Delhi and NCR. We also have an exclusive distributor (Elcom) for our premium range of products in this region. Our X&T premium range of series in ThinkPad is distributed nationally by Rashi Peripherals and Neoteric except in Delhi and NCR. Apart from these, our SRDs, VARs and retail channel partners sell our entire range of products,” pointed out Sharad Verma, national sales manager-SMB & HSB, Lenovo India.
The channel head for consumer/home business is responsible for effective delivery and results of the retail strategy. His key role is to make important decisions related to stores and incentive programs to drive good business and meet targets. Under the channel head are the national distribution managers who are responsible for managing the tier-1 distributors in terms of their target setting, productivity, execution, and delivery. Then, there are regional channel managers who are responsible for doing a sell-through from beginning to end through the distributors to verticals in their regions. Here also, Lenovo has appointed FOS unit as an extended arm of its sales force, responsible for management of tier-2 and 3 business partners. They focus on increasing the company’s sales and customer sell-out from the specific set of business partners. They report to the regional channel managers but come under the payroll of a thirdparty.
“Our go-to-market strategy is about focusing on the retail channel best suited to address the regional market. The key focus is reaching out to consumers through our exclusive stores and achieve penetration in tier-4 to tier-7 markets. We are also planning to fortify our partnerships with key multi brand outlets to position Lenovo as a key brand,” said Dinesh Nair, GM-retail & HSB, Lenovo India.
“We have a strong focus on multi brand retail as well. Lenovo multi brand and large format retail help in ensuring that the Lenovo brand is an important part of their offerings. Apart from these, we have over 2,500 tier-3 business partners across the country who buy products from regional distributors, who are a combination of storefronts, resellers and VARs, who cater to consumers in areas which are primarily not addressed by other direct formats,” added Nair.
The partner rating, certification, and accreditation model is not applicable to the relational business. However, in SMB, partners are rated as gold or silver based on their targets achieved. As far as consumer/home business is concerned, it has different rating programs for its partners based on targets they achieve. This includes gold, silver, and platinum. It also has a special rating system called the Super Brand Elite Council for its premium partners.
In order to enable its channel base and ensure that they are fully conversant with the products, the relational business invests in training them in both technical and non-technical areas. These specific training modules are organized for its channel partners on an ongoing basis across various tier-1 and 2 cities regularly. It also organizes several ‘Think Ready’ trainings across the country. “We are working on a solution to provide online training. We consistently undertake training and support initiatives for the benefit of our partners, thus earning us the reputation of being one of the most channel-friendly companies in India today,” asserted Dixit.
In SMB and consumer/home business, Lenovo consistently facilitates face-to-face interactions between all partners and sales representatives for monthly updates on product features, prices, schemes, and emerging purchase trends for mutual profitability. On a quarterly basis, its product managers along with Intel and Microsoft partners visit every region and train its partners. They also give them a live product demonstration and answer all their queries. This is the company’s certified master class training program.
The company has also tied up with Reliance Digital on a quarterly basis across major metros in India to train all their channel partners and the shop floor staff about Lenovo products and how to use key sales skills that consistently win business. Additionally, it educates them about its products’ roadmap for their deeper understanding. The regional channel managers train all its local sales representatives.
Further, Lenovo organizes workshops and events, where it invites partners to an exotic location and trains them about the products, features, benefits, and enterprise trends.
Lenovo’s incentive schemes are always tailored to tie up with the business objectives of the company and it differs from vertical to vertical. It has a unique incentive program called the product mix. The company believes that for a business to be profitable, it is important that partners should arrive at a clear mix in terms of product lines that benefit the business. There is a very clear and distinct performance bonus which is linked to the product mix. This not only helps in benefiting the company as the product mix is healthy, but also the partners in terms of more turnover and profit.
In relational business, Lenovo provides several incentive schemes in desktops, laptops and software and peripherals in power with the business strategies and channel execution.
In SMB, the company encourages its partners with a lot of on-going incentive schemes on a monthly and quarterly basis. This scheme includes the back end rebates called the minimum order quantity which is offered to partners based on the quantity they buy.
“On a monthly and quarterly basis, Lenovo’s incentive scheme varies and largely depends on the market situation. This year Lenovo introduced some mega programs for its partners. In JFM 2011, in the Skipper Club program, it awarded Cricket World cup final tickets to the partners who achieved the highest slab. In March, it also launched the Magic March storm. Here, partners could win themselves a trip to the Bahamas and the likes. The company also run incentive programs for partners’ sales force to encourage them to get more business for Lenovo,” highlighted Verma.
“From a channel partner’s perspective, Lenovo is one of the most profitable brands to work with. Our policies are robust; pricing is stable with a much defined channel structure and processes in place backed by the industry’s best claims management team. The important part is that all schemes are documented, backed by clear company communication and there are tight controls in place to ensure that all the transactions are transparent,” concluded Nair.
The company is planning to expand its channel partner base in 2011. This would help Lenovo to offer its products in remote location in India. This will involve significant penetration into the interiors of India; build a solid retail and distribution channel that can address its needs to reach every nook and corner of the country. Its immediate aim is to significantly enhance exclusive retail channel capacity and have 1,000 retail touch points for Lenovo by March, 2012.