Lenovo Sets Its Sights on SMBs
The new head of SMB welcomes resellers “with open arms,”† offering 1980s-era margins and an easy engagement with the PC maker.
By Cecilia Galvinalvin
With a focus on SMBs,†Lenovo has rolled out some tantalizing program components along with products and pricing to give resellers more hardware options. To learn more, Executive Editor Cecilia Galvinalvin spoke with Jay McBain, Lenovo’s director of SMB.
CHANNELPRO-SMB: What can resellers now expect from Lenovo?
McBAIN:†Our legacy is that we have always built bulletproof products that have traditionally been sold to larger enterprises, governments, and midmarket customers. We will take that history and build out a strong value proposition for our SMB channel.
There are about 70,000 VARs, consultants, ISVs, and others who will either sell or influence the purchase of a PC. And we have many of them signed up. A lot of those channel partners help us sell into large enterprises and governments, but I don’t think we’ve helped them enough in terms of the product, pricing, and promotion to sell to small and midsize clients. So the first thing is to reach out and give them those key bullets to work with.
The second major initiative is to recruit partners that sell to SMBs who perhaps haven’t worked closely with Lenovo in the past. So we’ve hired a third-party firm to recruit for us, with a different set of incentives to show these new resellers the products and pricing we’re now very strong in that we may not have been in the past.
CHANNELPRO-SMB: What incentives, specifically?
McBAIN:†To sell into small and medium businesses we have to think differently. So rather than coming to market with 200 different SKUs and 30 different programs, we have to figure out a way to have everything fit on one piece of paper—to have very few SKUs that are strong, and also to have incentives behind them that are easy to understand and execute.
One example is what we are calling our target program. Very simply, as a new reseller, if you sell $500 worth of Lenovo products, we will pay you 20 percent back in margin. If you sell $1,000, again, we are going to send you a check for 20 percent on the back end. We probably haven’t seen those kinds of margins since the late ’80s in the PC market.
So sell $500, we’ll send you $100; sell $1,000 and we’ll send you $200; sell $5,000, we’ll send you $400; sell 10,000, we’ll send you $600. You don’t have to end-user report to us. You just have to sell. Our distributors will let us know who buys.†
We’ve also changed our method for registering with Lenovo. In the past, you would have to demonstrate that you have a Web site, that you are in the business, and you would have to provide a lot of background information on your company. We have now made it much easier—you fill out a form that should take you two minutes. We’re really welcoming people with open arms.
CHANNELPRO-SMB: The products you mentioned—what have you recently introduced for this market?
McBAIN:†We have created a portfolio of products that starts with the netbook, in a $300 price cell, and a new set of notebook products called the Lenovo G530 that fills in the price cells from $300 to $350 to $400 to $450 to $500.
In the past, sometimes we would take another product and slim it down by processor or memory or hard disk to move it into a price cell. The G530 is a 15-inch-wide series of notebooks [designed] into these price cells with the right configurations. On the desktop side, starting at $300 and moving up in $50 increments, is the A58 lineup of Lenovo ThinkCentre products, and we have the M58 product that is very close to our M Series that we sell to larger enterprises.
For many of the resellers we are recruiting, PCs aren’t their number one business. So one of the values we can deliver is that if a customer wants a couple of notebooks and desktops, maybe a workstation for their engineer, and a server or couple of servers on a rack to pull it all together, the reseller can work off one price sheet and doesn’t have to find a desktop from one vendor, a laptop from another, and then go to a third vendor to get a server.†
