Lenovo Boosts Incentives, Adds New Pricing Tool To 'Rebuild Trust' With Partners

Lenovo Channel Chief Rob Cato said that the company is making good on promises to improve conditions for partners in its North American PC and smart devices business.

Following an overhaul to Lenovo's channel compensation program last fall that hurt profitability for many partners, company executives pledged at the Accelerate 2018 conference in May to roll out partner-friendly changes as a way to spark growth in the Lenovo PC business.

[Related: 10 Key Takeaways From Lenovo Accelerate 2018]

In an interview with CRN on Tuesday, Cato offered more details on what shape those changes are taking.

"Lenovo is now in a position to get back to growth and [customer] acquisition," said Cato, who took over as channel chief in April. "Last year, growth and acquiring new customers were not at the forefront of what we were doing. We're now in a position where we want to reward growth and reward our partners for going out and acquiring new customers."

While Cato did not share specific percentages, he said the company is increasing backend rebates and market development funds for partners, while also giving partners improved access to Lenovo sales and support teams.

Importantly, Lenovo is segmenting its commercial business into three partner communities—SMB, large enterprise and K-12—and targeting incentives, support and planning based on those communities.

"There'll be different incentives, higher sales coverage and a better, more-robust support organization to help them grow their business," Cato said. "We're going to put growth incentives in place ... Most of these will be in the form of backend rebates. And we'll have MDF accruals that they will receive to drive additional opportunities in the marketplace."

Lenovo is also promising partners "deeper relationships with our channel sales teams—and not only with our channel sales teams but also with our end-user sales teams," Cato said.

Additionally, on July 1 Lenovo add a new SMB bid tool to its partner portal, as a way to provide faster pricing information for partners, he said. "That SMB bid desk will now speed up the turnaround time for pricing for SMB opportunities, from what used to be days now down to less than 24 hours," Cato said.

Other new tools to more efficiently deliver information to partners, such as product information, are expected to launch in coming months.

Cato noted that deal registration and existing incentive programs for SMB partners are remaining unchanged.

"I do believe [the moves] will increase profitability," Cato said. "I also believe it will give them the excitement back into the Lenovo business, that frankly we needed to have."

Michael Goldstein, president and CEO of LAN Infotech, a Lenovo partner in Fort Lauderdale, Fla., applauded the changes by Lenovo.

"These are great steps to drive channel business," Goldstein said in an email to CRN. "It's not enough to just have great products. Rebates and the pricing tool really help out."

Along with expanding business among Lenovo's existing base of 26,000 partners, Cato said he is hoping to recruit new partners as well—and will be working especially closely with distributors to bring aboard new partners.

Overall, the moves are "the first step in rebuilding that trust," Cato said. "Obviously that is earned over time. I feel very confident, after talking a number of our partners, that we are on the right path ... I really believe that we're going to rebuild that trust over the coming quarters."