Channel programs News
Lenovo's SMB Strategy Targets Dell, HP
Lenovo is preparing to take the battle for the small and midsize business market to turf that's traditionally been held by companies like Hewlett-Packard and Dell.
The computer manufacturer is banking on its strong Think notebook brand recognition and new line of low-cost mobile computing devices to break into and capture a large part of the SMB market while winning over the hearts and minds of resellers in that space. With new products for consumers and reseller partners, Lenovo is reconsidering its sales philosophy, intent on making a serious run at its competitors.
The Lenovo brand already has a strong channel presence with loyal partners and customers at enterprise businesses that recognize the types of products the computer manufacturer has been bringing to market. The Think line of notebooks has seen a solid following from customers and channels throughout North America, said Stephen DiFranco, vice president of consumer and commercial channels for Lenovo.
"The Think line is healthy and we've seen an incredible dedication from resellers who sell the line for us," DiFranco said. "There is some incredible health in the foundation of our channel business."
As the economy continues to soften, DiFranco realizes it would be a mistake for his company to stand pat and not try to expand into the constantly growing SMB segment. Lenovo's strategy to capture that business is aimed directly at partners who do the majority of their business in the midmarket, noting that those are the resellers who often sell to smaller companies as well.
That push toward what has been for Lenovo a mostly untapped market will start by expanding its product line in the United States, mirroring something that Lenovo does worldwide.
A key ingredient to Lenovo's worldwide sales push is the progress the company has made in the retail space, something that can't be ignored as it goes after the midmarket. Earlier this month, Lenovo rolled out six new computer models aimed directly at the consumer space. Three laptops and three notebooks, branded Idea, were unveiled at the Consumer Electronics Show in Las Vegas. The response to the products at the show expanded DiFranco's and Lenovo's confidence that the time was right to make a move in the SMB segment on domestic ground.
Of course, Lenovo had already been operating in the SMB space in China and other countries abroad.
"Lenovo has an SMB group of products in China sold under that label," DiFranco said. "We manage a multibrand layout there and I think that helps resellers understand which group of products are the right ones for customers."
In addition to China, Lenovo manages brands of products aimed at the SMB market in South Asia and Europe as well. The difference between the U.S., and Asian and European markets, however, is that the SMB segment is more clearly defined and more highly dependent on overseas than it is domestically.
Traditionally, vendors like Lenovo and others have targeted larger corporations with aggressive product rollouts and campaigns designed for both the channel and vendor to realize the best possible revenues. DiFranco admits that this strategy has led to the lack of definition in the SMB market in the United States. Still, DiFranco doesn't believe that just because the SMB space has been largely pushed aside by Lenovo in the U.S., that the company and its partners can't replicate what has been a largely successful business practice beyond these shores.
And DiFranco does believe that the SMB market in the U.S. is ready for a push from vendors like Lenovo, as long as the strategy and products his company employs are the right ones. DiFranco even sees that the SMB market is preparing to rebound out of the darkest corners of the current recession.
"This is a rich marketplace that was impacted early in the recession," DiFranco said. "And because they were hit early, I think these resellers are more fortunate than others -- they've been able to adjust to the economic conditions a little better."
Sensing that the time is right and that resellers are looking for new ways to increase their revenue, DiFranco is preparing an aggressive strategy that will redefine the role of partners vis-a-vis their customers, while simultaneously positioning Lenovo as a leader in the market.
Next: Lenovo Refocuses On The Channel
However, wanting to lead in a market and actually leading in a market are two entirely different things. DiFranco realizes this and has already begun to make internal changes that reflect the way Lenovo plans to do business with its customers in the upcoming months.
"This is not our channel yet," said DiFranco, referring to the SMB space. "We have to earn it. One part of making it our own is commanding the respect of an emerging channel business. Another part is putting out good product. The final part is to reorganize our group to address partner needs."
The reorganization of the channel strategy comes in the form of two faces new to Lenovo and one that most partners are likely to be familiar with.
Wes Towns, director, enterprise business, Americas, will continue to focus on the high end part of the channel. Towns will continue to support partners that are working with large enterprises and in the public sector.
Angela Richter, director, consumer business, Americas, joined the company in the middle of last year from Office Depot and has been tasked with bringing the Lenovo brand into consumer stores. Richter will be responsible for placement, promotion and pricing strategy around Lenovo's laptops that are specifically aimed at the consumer.
The newest executive that's being brought onto the Lenovo channel team will be Jay McBain. McBain will start his role as director, small and medium business, Americas, on April 1 and will be focused entirely on the SMB channel.
Towns, Richter and McBain will join DiFranco in making a strong push toward the SMB market by offering products the same way customers are purchasing them, according to DiFranco.
"Reorganizing this way is important for Lenovo because it puts three executives in clusters around the way people buy," DiFranco explained. "Wes, Angela and Jay are all organized to address customer needs."
But for DiFranco, just understanding how end users are purchasing Lenovo's products isn't enough. In addition to his "customer clusters," DiFranco wants to put in place a new underlying philosophy about selling through the channel that will ultimately guide this three-pronged strategy going forward: influence.
"We're going out and finding out who the right influencers and resellers are for us to be focused on in this area," DiFranco said. "We want to keep the channel informed of our progress so we can become known in the space."
Keeping partners informed is an important part of their new strategy, because, as DiFranco puts it, "when you're not known in the space, you're not expected in that space." As this group of influencers and resellers become more aware of the products that are available to the SMB channel, Lenovo, DiFranco hopes, will become more of a household name to partners, akin to the way enterprise resellers regard the Think product line.
With an increased presence with channel partners, Lenovo can start to execute on its plan to go after the SMB laptop space.
"The first thing we need to do is spend even more time understanding where the market is going," DiFranco said.
For DiFranco and, presumably, the rest of his executive channel team, that means pressing the flesh and speaking with the people who spend their time in the trenches day in and day out. That means more time on the phone and in person with distributors and resellers who make it their business to navigate the vast ocean of the SMB market.
Second, Lenovo has to work with product teams to build the specific products that customers are looking to purchase. That may mean some more research or time spent in development, but the overall goal is to deliver a solution that resellers can take to customers and be confident in selling.
"We have to have products that channel partners who focus on the SMB know are geared toward their customer," DiFranco said.
The final leg of DiFranco's strategy dovetails with his idea of developing a community of channel partners that acts as influencers. Resellers hold sway with customers, recommending what products and vendors will best fit their specific needs. That's something DiFranco takes seriously.
"Our opportunity comes from our brand and the Think name," DiFranco said. "But partners aren't completely convinced yet that Lenovo will fit in a small or medium-size business -- there are companies who haven't been selling to these businesses yet who eventually will. Developing that relationship will be a key to our success."