CRN Exclusive: Xerox to Move Tens of Thousands of Direct Accounts to Channel Partners

Incoming Xerox North America President Mike Feldman said the company plans to transfer tens of thousands of its directly-served upper mid-market and smaller enterprise accounts to channel partners.

"Today, our large enterprise direct sales force has a lot more business with more accounts than I would like them to be focused on," Feldman told CRN. "We're looking at those accounts that are considered below big, large enterprise and moving those to channel partners."

Xerox also plans to change how it compensates its sales force, Feldman said, moving from a model that incentivizes direct sales to one that is channel-agnostic.

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"Whether the salesperson sells it directly from Xerox or uses a channel partners as they sell into the account, we would like them … to make the same amount of money regardless of the route to market," Feldman said.

Feldman will take over as Xerox's North American leader at the start of 2017, after the company splits off its $7 billion business process outsourcing division - which will be renamed Conduent – from its $11 billion document technology business, which will retain the Xerox brand name.

Customers with 1,000 or more seats are currently classified as large enterprise accounts, Feldman said, and are therefore eligible to be serviced directly by Xerox's salesforce. Going forward, though, only accounts with 5,000 or more seats will be considered large enterprise, Feldman said.

Feldman said Xerox plans to cover the smaller accounts that are part of its large enterprise group today in a more cost-effective way by having them serviced by channel partners.

"The salesperson won't have to really get a vote on that," Feldman said. "We'll redirect our direct salespeople to bigger accounts, and going after new logo, really large accounts."

All told, Feldman said Xerox has tens of thousands of accounts in its U.S. large enterprise organization today that it plans to move to channel partners, and just 2,000 accounts that need a direct interface from the Norwalk, Conn.-based vendor.

"Xerox has a lot to gain by partnering more with our channel in the marketplace," Feldman said. "We want to compete less, and cover more."

Feldman said even those 2,000 large enterprise accounts requiring a direct Xerox interface could be sold through channel partners. Feldman vowed that, under his leadership, Xerox's direct sales organization will partner will channel resellers to support large enterprise customers, which he said is something that hadn't happened previously.

"I think the channel is a huge opportunity for us," Feldman said. "I really believe very much in the channel."

Feldman cautioned that transferring these accounts from direct to channel-led coverage will take time since Xerox needs to ensure that its end users are comfortable with the new model. Even though the transition won't occur right away, Feldman said it's something the company is actively working on.

Xerox-exclusive agents and multi-vendor dealers can provide better customer service and more expedited response times than Xerox's direct sales force, said Troy Tafoya of Fort Collins, Colo.-based Professional Document Solutions (PDS).

"We're in the communities that we serve," said Tafoya, president of Xerox agent PDS. "We can do a much better job than the large enterprise organization was doing because they were so far removed."