Dell's Channel Chief: 10 Steps We're Taking To Avoid Disaster

Earlier this month, CMP Channel suggested 10 steps Dell needs to take if it hopes to avoid disaster as it builds its new partner program and channel strategy. Greg Davis, Dell's vice president of commercial channels, gave CMP an exclusive point-by-point response to each suggestion. Dell plans to roll out its much anticipated channel program Dec. 5.

1. Top management needs to take the lead role in building and enforcing channel strategy.

"Not only am I'm very engaged and leading the charge, Michael [Dell] is in great support, and my boss, Paul Bell, [senior vice president and president Americas] is a great support in helping to garner the resources and change the process and help us to evolve the culture so we can be successful with the channel," Davis said.

2. Hire a top-level channel executive from outside the company to run the show.

Not in the cards. We weren't holding our breath on this one, although if Michael Dell wanted to score a major coup, he'd lure former Compaq channel exec and Texas native Ross Cooley out of retirement. Davis emphasized that he's become the leading channel advocate within the company and his previous experience with Dell direct sales gives him an edge where he said the fight will be toughest: Transforming the direct culture within Dell to one that allies itself with the channel.

3. Listen to solution providers.

Davis said the new channel program wasn't designed in a vacuum. Dell currently has 15,000 U.S. channel partners, Davis said. The company sought input from solution providers and will continue to do so in the future. We should add a footnote here. The key is not just listening; it's listen, learn and act.

4. Compensate your sales people more for channel sales than for direct business.

Not going to happen. But Davis said that he's done the next best thing. Direct sales people will receive the same compensation for a channel sale as they will for a direct sale. Still, Davis may have to rethink this one. Neutral compensation is great when you're already a channel player. But Dell has a lot of catching up to do and a bonus for using channel partners would be the best way to transform the direct sales culture. Davis did note, however, that within days of announcing the new compensation formula, Dell direct sales people came forward with about 1,000 accounts that they want solution providers to help them go after.

5. Put feet on the street.

Done. Dell currently has about 350 people dedicated to its new channel organization, about 25 percent of which are field sales reps calling on solution providers. "We will see significant growth [in field channel reps] in the coming quarters," Davis said.

Next: Partner Summits, Deal Registration And Money Making In The Offing

6. Hold partner summits.

In progress. Davis said Dell has actively sought input from its existing partners in designing the new channel program and has plans to hold meetings with partners to get more input once the program rolls out.

7. Deal registration is a must.

"I hope we nailed that one," Davis said. Deal registration will be an integral part of Dell's new partner program. The registration program has account size threshold barriers that will start at a specific dollar level and gradually be lowered over time to include smaller SMB transactions. The registration program has specific strategies for accounts where Dell is currently doing no business, where it is already active in an account, and the vast gray area where it has sporadically sold systems to the customer.

Davis said he likely won't fire direct sales reps that don't honor partner-registered deals or that attempt other aberrant behavior designed to switch partner-led business to direct. Rather, he said he'll sit down with the offender and try to understand what went wrong. If the behavior becomes habitual, disciplinary action will likely be taken. "The goal is to build trust," he said. "And to do it in a professional way with the [direct] team and with partners."

8. Partners need to make money too.

"We are focused on that in terms of leveraging our operational efficiency," he said. "And we are going to work hard over the coming quarters to deliver all of our enabled services to and through channels, which will be a great opportunity for our partners." Davis stressed that compensation for Dell's salespeople is the same whether the sale goes direct or through a partner, giving no reason for direct people to undercut partner pricing. Still, watch out here. Many customers don't care about deal registration. Dell needs to make sure large partners that may receive bigger discounts, don't pouch accounts from smaller solution providers.

9. Do all of the above as quickly as possible.

What can Davis say except, after six months, the wait is over. It's coming next week.

10.Top management needs to take the lead role in building and enforcing channel strategy.

Yes. We are being redundant. But unless Dell's top management is committed to this channel push, it will fail. Davis reiterated that top Dell management is on board. We hope Dell is serious about making this channel push work. If it is, good luck rookie and welcome to the major league.