Lenovo Battles HP, Dell, Acer With New SMB Sales Strategy

Lenovo is taking its battle to win share against rivals Hewlett-Packard, Dell and Acer into the sales trenches with a new dedicated team of inside and outside SMB sales reps focused on helping VARs win deals against the competition.

The new coverage model, which went into effect July 1, is a "huge" structural change aimed at driving more business in the SMB channel with partners, said David Bankemper, a distribution sales executive for the China-based computer giant.

"While all of us have talked about this SMB market for the last five to seven years and how important it is, for us getting the dedication there [with the new coverage model] and staying focused on it with people that care about that marketplace is a huge change for us and for our commitment to the channel," he said. "These [Lenovo sales reps] are dealing in this space day in and day out, and they are not worried about the next big deal that is going to pop in their territory."

Bankemper said he did not want to reveal how many of those sales reps are in the field for competitive reasons, but he stressed that it is absolutely a critical differentiator since it marks the first time Lenovo has compensated its sales reps to work with partners to grow SMB sales in the U.S. market. Those sales reps are compensated specifically for sales of Lenovo's 3000 value notebook and desktop models and its Top Seller ThinkPad and ThinkCentre desktop models, said Bankemper.

The new sales coverage model is already starting to pay off in increased sales in the U.S. market, he said.

Another sign that the Lenovo SMB model is taking hold is an expanded agreement with SMB distribution kingpin D&H Distributing. Under the extended pact, the Harrisburg, Pa-based distributor, which has already been wildly successful with the Lenovo 3000 line, has begun distributing the Top Seller line of ThinkPad notebooks. The expanded partnership, which includes distribution of ThinkPad Top Seller models that range in price from $1,049 to $1,599, pits D&H directly against larger rivals Ingram, Tech Data and Synnex, who already are carrying the ThinkPad Top Seller line.

The deal comes as D&H is already generating more than $1 million per month in bread-and-butter SMB sales through 1,000 new VAR partners for the Lenovo 3000 line, smashing expectations of somewhat skeptical Lenovo executives. The big question for the Lenovo team, which had not added a distributor in more than 20 years, was whether D&H could bring incremental sales to the table, said Bankemper. "When we walked into this we were somewhat questionable about what we would see," he said. "D&H just blew us away. Candidly D&H has just led the way in that [Lenovo 3000 value] space."

Eighty-percent of the 1,000 resellers D&H brought to the table are "net new partners that we had never seen, heard of or touched," said Bankemper. D&H will celebrate the one year mark of the Lenovo partnership at its New England regional show on Aug. 14 at the Quincy Marriott Hotel. The event, the longest running of D&H's trade shows, will celebrate its 17th year, bringing together more than 60 vendors -- including Lenovo -- and an estimated 750 VARs. D&H will feature a session titled "Increase Your Revenue with Lenovo Products and Programs" at the Quincy, Mass., show.

NEXT: Why VARs like Lenovo better than HP, Dell and Acer

Jeff Bushey, the owner of SurityNet, a managed service provider in Punta Gorda, Fla., said he has not yet seen the impact of the Lenovo sales coverage changes, but noted that the lower reseller prices on the Lenovo 3000 value line has resulted in higher margins than on HP, Dell or Acer systems. "Lenovo's base price is lower on the 3000 line which gives us more room to make margin," he said.

Bushey, who is in the midst of trying to close a deal for 38 Lenovo desktop systems, said he is not interested in dealing with Dell. "After years of not wanting to deal with us, why would I want to deal with them?" he said.

When it comes to HP, Bushey said he has found the vendor's annual requirements too stringent for a small reseller like SurityNet. As for Acer, he said commercial accounts prefer to deal with a bigger name brand system like Lenovo ThinkPad.

Bushey credited his D&H sales rep for turning his company onto the Lenovo product line. "D&H is a great company to work with," he said. "They got us working with the product, and when we have questions they are instantly available to help us."

Lee Matott, president of Matott Enterprises, which has a 3,000 square foot retail store in Potsdam, NY, said he has also not seen evidence of the new Lenovo coverage model. Matott said he prefers the Lenovo systems from D&H because he has not seen the Lenovo 3000 products in retail stores like Walmart.

"We're always looking over our shoulder trying to position ourselves against the Walmarts of the world the best we can," he said. "We are looking at exclusively selling Lenovo." He said a Super Walmart just opened a mile and a half away, and there was no sign of Lenovo products on the store shelf. He said he likes the Lenovo systems because they command a higher price than the $399 systems offered by some other computer manufacturers.

Matott said he also likes Lenovo because the company still offers models with Microsoft Windows XP Pro rather than Vista. "A lot of people are just too apprehensive about Vista," he said. Matott plans to avoid Dell because the direct marketer has inked a big deal with Walmart and beause of what he called Dell's poor customer service.

As for HP, Matott said he has ordered some products from HP.com because the HP Website has better deals than he can get from distribution partners like D&H. Finally, he said, Acer makes a high quality product but noted that he finds its cumbersome to order parts from the vendor.

Matott said most notebook makers are blasting their products into the mass market, making it critical for retailers and VARs like him to offer superior customer service. "The only thing keeping people like us going is service," he said.

Matott praised D&H for working closely with him to help his store be more successful. He said his business with D&H is up 50 percent over the last year. "We've swung a lot of business over to D&H," he said. "Their reps have been very helpful."