Who Do You Love?By T.C. Doyle | Posted 2006-04-04 Email Print
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Vendors tend to confuse loyalty with fidelity, which explains why so many are obsessed with wringing as much from partners as they can.There's a reason why you may be feeling like a hand-towel these days; seems every vendor on the planet is obsessed with wringing every drop of contribution possible from your company. They have to, you know, lest those multi-billion dollar mergers and acquisitions look foolish in hindsight.
Four years after buying Compaq Computer Corp. after a prolonged proxy battle, HP is still trying to justify the move. Chances are you may be feeling the brunt of the latest twist to that attempt, a new plan to lavish its greatest rewards on those companies that push the broadest spectrum of HP products possible. To induce partners to cross-sell and up-sell customers, HP has launched Attach Plus, a rebate program set to go live May 1.
Ostensibly, Attach Plus is clever idea to reward those that routinely drive sales of multiple products within the HP product portfolio to the tune of $1 million per year. Sell more, get more. Simple, easy-to-take tablet form. No wonder key HP partners almost universally praise the plan, which is a direct byproduct of HP CEO Mark Hurd's personal philosophy that HP should reward those that honor HP.
Fidelity, on the other hand, is something altogether different. That's what you give to a spouse, the Red Sox or the song on the radio the night of your first kiss. What do those three things have in common? Well, for starters, none of them can be bought. (Note: I said Red Sox, not White Sox, which everyone knows can be bought, or at least once were.)
Despite this universal truth, vendors try over and over to buy your fidelity with financial incentives. (Ask any monitor vendor if its sales though distribution increase when it launches a SPIF promotion. Trust me, they do. But they also go right back down when financial incentives go away, as they inevitably do in commodity product sales.)
Truth be told, vendors merely rent fidelity to a brand or product when they try to buy it. The more they pay, the longer they delude themselves that their efforts will establish equity with a set of companies. Sooner or later, however, all renters learn that's not the way fidelity works.
True fidelity is found in a mutually, beneficial relationship that lasts for a long period of time. The key to that is recognition: those vendors that recognize that value can come in many forms other than cross-sales and up-sales capabilities are the ones I find that enjoy loyalty if not true fidelity from partner allies.
Driving partners to sell more of your portfolio by tossing a few dollars their way may temporarily help to increase your partner satisfaction scores in the latest magazine survey or sales of given products. But they won't create the kind of loyalists that they have in Boston or in many households across the land.
Next time a vendor you're fond of tries to "rent" your loyalty or fidelity, ask yourself if it recognizes your true value. Does it acknowledge your unrivaled technical excellence, your ability to crack top customer accounts or the superior level of customer service you provide? If not, then ask yourself if you gave away your virtue to a company that longs to control your behavior with a few dollars. If the answer is yes, then don't hesitate to move on when the time comes. Once you realize you're not as close as you thought, it won't be that hard.
T.C. Doyle is the director of intelligence at Amazon Consulting, a Silicon Valley think-tank and consultancy that specializes in IT alliances and partnerships. The author of more than 1,000 technology news articles, columns, features and profiles, he can be reached at firstname.lastname@example.org.