As a 100% indirect IT business, Lenovo takes extra care to ensure that it stays relevant to its growing channel of reseller partners.
“Lenovo has been channel-centric from day one,” says Abrie van Staden, channel lead for Lenovo SA. “As such we rely heavily on distributors to get our products to resellers, and to help them sell to the end user customer.”
The channel operation has recently added data centre group products to its responsibilities, alongside the traditional professional computing group.
Professional computing distributors are Pinnacle, Mustek, Axiz, Rectron and Tarsus; while data centre products are distributed First Distribution, Mustek, Axiz and Pinnacle.
There are a handful of Gold Direct partners for both sets of offerings, operating in a two-tier partner model, but most of the resellers fall under the three-tier distribution model.
These three-tier partners are grouped as either Gold, Premium or Accredited resellers, Van Staden explains.
About 300 Gold partners are managed by the channel team, and a further 400 Premium resellers are managed through a new call centre initiative.
“So we are confident that we are touching these 700 partners, doing account management, explaining Lenovo’s value proposition, and conducting monthly and quarterly business reviews.
“We are committed to positioning the products that we sell via these partners – the PC and data centre products and solutions.”
There is no doubting the success of the model, Van Staden says: Lenovo currently enjoys a 26% market share in South Africa consumer market and has been the top vendor for eight consecutive quarters, according to IDC FY16/17 Q3 results.
This is particularly impressive in light of the 4,5% market share the company held just 10 years ago.
“Having 25% plus market share and being a profitable organisation was our vision and we are fulfilling it. But now that we’ve caught the bus, we have to hang on to it,” he adds.
“Going forward, we need to maintain this share and look to growing it.”
To do this, the company recognises that it has to start focusing on the thousands of resellers currently sitting in the Accredited tier of the partner programme, and help them to grow their own businesses by growing their Lenovo portfolios.
But having an effective engagement with these smaller organisations, all of them absorbed in the day-to-day running of their businesses, is not an easy ask.
“Personally, I have done a lot of research about how to communicate with resellers, even doing my MBA thesis on the subject,” Van Staden says.
“Among the things I have learnt is that a regular e-mail to the reseller doesn’t work. Communication has always been one-sided, and that means it’s not communication at all.
“We need to create a platform that allows people to communicate back to us, to create a dialogue – then you can call it communication.”
During 2016, Van Staden and his team built an app to test his theories. The app offered a forum for Lenovo and resellers to engage with one another.
“We also added some other cool stuff to keep it relevant,” Van Staden says. “For instance, we added gamification, allowing the reseller to skill up his avatar ad do battle with other resellers.”
The experiment was successful, and showed the team that different platforms work well for different segments of the market.
This led to a Project X, new development, launched this month (April 2017) that seeks to engage the approximately 2 000 resellers not being managed through the traditional platforms.
“At the moment we do communicate with the managed channel, but we don’t communicate effectively with the unmanaged channel. This is where Project X comes in,” Van Staden explains.
The app will be relaunched in the Project X space, along with a number of other initiatives designed to attract and engage this valuable untapped market.
“We have got some very interesting offerings lined up for Project X partners. One of these will be financing options, which have never been available to these resellers, but will help them to conclude bigger and more valuable deals.”
Because the unmanaged partners all operate through the distributors, Project X is being launched as a distribution-focused initiative. “The distributors are already transacting with these partners, and now they have someone at Lenovo helping them.”
The initial launch via the distributors was on 1 April, and further value-adds will be announced at intervals.
Van Staden believes that Project X will help Lenovo to better understand what the smaller resellers need to become more successful. “I think we have come up with a great solution for engaging these partners and helping them to grow the SME market.”
He adds that Project X is a South African initiative, conceived and built by the local channel team – it’s not simply the local adaptation of a global model. As such, it has been designed to speak directly to the specific requirements of South African partners.
“Project X will let us communicate with the unmanaged partners that we don’t yet have a relationship yet, and will help them to be more successful,” Van Staden says.
He adds that channel partners need just five things from a vendor, and being able to provide them will almost inevitably result in a successful engagement.
“Partners need to know what happens if something goes wrong,” Van Staden says. “Our account managers ensure we are in touch with the channel so they are aware of what to do in any circumstances.”
The next imperative is consistency. “A vendor needs to be consistent with their programmes and action. If you aren’t, people are confused and stop trusting you. At Lenovo, we have done a good job of being consistent and predictable. We don’t do things that upset the apple cart, and we don’t go direct.”
Communication is also key, Van Staden says, and has to be done well using a variety of different methods.
“The rebate programme must evolve, and must be lucrative for the partners,” he adds. “If you have a rebate programme that worked in 2016, that’s not good enough anymore – you have to look at what is relevant in 2017. You can’t cut and paste a rebate programme.”
Marketing can’t be under-estimated either, Van Staden says. “Our resellers want us to help them sell products. To do this we have to create demand, and give them the tools to sell. This includes the right level of training.”
Doing these five thing successfully has helped Lenovo to grow its market share in the South African market, and Van Staden believes staying true to its commitment will help the company grow its resellers presence and its place in the market.
“What we have done in the channel over the last three years really stands out,” he says. “I am really super proud of what we have done in the last two to three years. We have been engaged in the channel and this had helped us to grow.
“Just three years ago, Lenovo wasn’t that well known, but we have done great job ensuring that a lot more people got to know the brand – and the channel has been key to creating thee demand and growing the brand.”
The team at Lenovo SA has one big advantage over most other vendors, and that is its ability to quickly implement and execute new ideas.
“This makes us a fierce competitor. If something is not working, we can quickly move in another direction. We are fortunate that we are able to make decisions locally. There is no red tape and that makes us very nimble.”
Project X is a case in point, Van Staden says. “I learnt in Kenya that copy-and-paste initiatives don’t work. You have to have local flavour. And you have to change things frequently – two years is the maximum shelf life for a channel project.”
The Lenovo SA channel team
The channel team at Lenovo SA engages with about 700 managed partners as well as owning relationships with the distributors.
The team consists of one distributor account manager, two product managers, three channel sales representative, two call centre staff and two Lenovo partner executives.
It is responsible for the channel in South Africa, while the SADC team looks after partners outside the borders.
Lenovo and its distributors offer specialised training courses and certification, while all of Lenovo’s staff members are able to provide other training and skills development.
All resellers also have access to a partner portal, which gives them access to all the tools they need.
The channel operation supports all the product groups within the company, maintaining all the distributor and reseller relationships and ensuring there is collaboration across the organisation.