Partners Cheer Lenovo Move To Reinstate Chromebook Spiff

The PC maker is reversing course on eliminating a sales incentive rebate on Chromebooks, which have seen surging demand for distance learning during the coronavirus pandemic.

Solution providers Tuesday applauded Lenovo's decision to reinstate a sales incentive rebate on Chromebooks for partners, reversing an initial decision to eliminate the rebate as of April 1.

The company heard concerns about the original decision from numerous partners, particularly those with businesses focused on selling Chromebook devices into the education market, said Rob Cato, vice president of North America channels in Lenovo's Intelligent Devices Group. Demand for student-friendly Chromebooks has been soaring as countless school districts have moved to distance learning amid the COVID-19 pandemic, vendors and solution providers have told CRN.

[Related: Coronavirus Driving ‘Massive’ Surge In Tech Purchases: The Channel Company Research]

Lenovo, based in Hong Kong with U.S. headquarters in Morrisville, N.C., is now retroactively reimplementing the sales incentive rebate, or spiff, on Chromebook devices for partners, Cato told CRN. Partners are being informed starting Tuesday, he said.

Michael Goldstein, president and CEO of LAN Infotech, a Lenovo partner in Fort Lauderdale, Fla., called the move to reverse course on the Chromebook spiff "amazing" and said it is a sign that Lenovo is listening to its partners. "Every voice counts," he said.

At a time of surging demand for Chromebooks, "having that spiff go out to the salespeople is great," Goldstein said. "For our sales guys, it's a very hard time. So this makes it easier for them."

The initial removal of the Chromebook spiff was one of several changes implemented by Lenovo's Intelligent Devices Group in North America on April 1 -- the start of the company's fiscal year -- which included a "stimulus package" meant to help shore up cash flow for solution providers during the uncertain economic environment created by the coronavirus pandemic.

"I have never seen a company as large as Lenovo able to pivot as quickly as Lenovo does. What I mean by that is they created an excellent stimulus package for partners and realized they were removing one big component that affected sellers," said one executive at a solution provider that focuses on the K-12 market, who asked to not be identified. "Within a week they took a large amount of feedback, met internally and changed course immediately to correct the situation. I don't know of many other companies that would do that."

The "great thing" about Lenovo is that "they are a multi-billion dollar company that at times can operate like a localized brick and mortar store," said the K-12 solution provider executive. "You can voice your feedback and they will make changes. They have a great leadership team in place, and situations like this show that."

Another solution provider executive, who also asked to not be identified, told CRN that "Lenovo is listening to partner insights and reacting quickly to address the feedback."

While North American solution providers praised many of Lenovo's April 1 changes, the elimination of the Chromebook spiff took many partners by surprise because it was not communicated to them in advance.

Lenovo had initially removed the Chromebook spiff in part to help enable other measures in the stimulus package, Cato said. The spiff--intended for individual solution provider salespeople--was initially seen as a lower priority than measures meant to help stabilize partner businesses overall, he said.

"Our focus was really at the leadership and ownership level, to make sure that they continued to operate--that they continued to have the cash flow that they needed to support their customers and support their business. I'd say that our focus was a bit less on the individual seller," Cato said. "I think that's where we're learning. I would admit that we're not always going to get it right the first time. And so we're learning from that and listening to the feedback and trying to adjust as we go forward."

Overall, Lenovo’s channel stimulus package was well-received. Lenovo removed all of its target-based programs as of April 1, so that partners are no longer required to hit a certain threshold to earn rebates, improving predictability. In addition, Lenovo has begun providing these earnings to partners every 30 days, instead of every 90 days as in the past.

Cato acknowledged that Lenovo had not provided partners with advance notice about the initial change and pledged that communication will be improved going forward.

"My commitment to the partner community is that we will make sure we communicate well in advance to give them enough notice" on future changes, he said.

Chromebook laptops, which are produced by many PC manufacturers including Lenovo, have long been popular in K-12 education due to their simplicity and affordability. Demand for Lenovo Chromebooks has been "off the charts" in recent weeks and supply has been constrained, though the supply picture is improving, Cato said.

"There's just no way for us to be able to meet all the demand in the immediate near term. But I think over the next two to three quarters we absolutely will be able to to supply all of the product that our customers and our partners are looking for," he said.

When asked about the future of the Chromebook spiff, Cato noted that Lenovo does review its programs every quarter, but said the Chromebook sales incentive rebates will likely be kept in place at least through the current buying season for the public sector.

"We'll evaluate as we go into July. But typically the buying season lasts all the way up until September. So I anticipate that we'll continue to have [the spiff] through the buying season. And we'll look at all of our programs as we go into each quarter, and review and decide what we need to do," Cato said. "But again, the key is that I want to make sure we provide enough forward communication to our partners on any changes that we might make."