HP Simplifying Partner First Compensation Model, Slashing Payment Qualifiers By More Than Half

HP Inc. is dramatically simplifying the Partner First sales compensation model with a new streamlined program that cuts by more than half the different payment tiers and qualifiers related to specific products.

"We had partners coming to us saying, 'The way you are structured we need a Ph.D. in HP in order to manage your programs,'" said Thomas Jensen, vice president of worldwide channel sales strategy at HP. "This is why we are making a major change. We have heard what the partners said and are responding."

The new model, which will be unveiled at the Global Partner Conference running Sept. 12 to 14 in Boston, eliminates significant complexity by reducing various compensation qualifiers and "metrics," said Jensen. It goes into effect Nov. 1.

The "massive reduction" in core compensation metrics will be accompanied by back-end automation changes that ensure that partners spend more time in the field selling rather than managing compensation, said Jensen.

[Related: CRN's Coverage Of The HP Global Partner Conference]

"This is going to make it easier for our partners to predict their compensation going forward," he said. "It is going to drive more sales for partners by increasing the ease and speed of doing business with HP.

"The new compensation metrics are just fewer, and more intuitive," said Jensen. "First and foremost, this is going to give partners "We are putting the power back in the field," he said. "We are putting the responsibility on the partner and our partner business managers to drive growth and value in the business, including profitability for both HP and the partner."

The seeds of the new compensation model came from planning that HP did in the midst of the split last November from Hewlett Packard Enterprise.

"We have spent a year working and modeling this to ensure that we did it the right way," said Jensen. "We didn't want to negatively impact our business or our partners' business during the split."

The compensation model had gotten too "detail-oriented" over time as HP added new product categories, creating multiple qualifiers, said Jensen.

In the past, for example, a printing partner may have had different metrics for both PageWide and OfficeJet Pro X, said Jensen. "We are rewarding our partners for driving sales—not managing down to the last SKU or demand generation initiative," he said. The new compensation model, in fact, opens the door for partners to do demand generation activities for specific products under joint business planning or with market development fund activities, said Jensen.