HP Needs to Realize Loyalty Is a Two-way StreetBy Pedro Pereira | Posted 2005-07-20 Email Print
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Partners have heard HP's promises of channel commitment before, but they want to see action. HP's best move would be to eliminate its direct-selling call center in Colorado.
Each time Hewlett-Packard Co. makes a big announcement, company executives try to reassure partners they remain committed to the channel. Each time, partners react with the kind of skepticism that comes from having heard it all before.
Partners say actions haven't always followed the words, which has been a recurring source of frustration.
And that's why many partners, particularly those in the highly contested SMB space, are reserving judgment on what HP's restructuring announcement Tuesday means to them.
The Palo Alto, Calif.-based company is laying off 14,500 people, about 10 percent of its workforce, as part of a major restructuring to better compete in a tough marketplace.
One group that is surviving the restructuring is the one that for some time has proven to be the biggest thorn on the side of VARs that do business in the small and midsize marketplace. That group is the Colorado Springs call center, which is known to contact the customers of VARs and attempt to sell them directly the products those customers buy through the channel.
The center, which has operated as the Customer Solutions Group, as a result of Tuesday's restructuring is now part of the Personal Systems Group. And though it no longer will operate as CSG, it remains in place.
While I do not wish to go on record as calling for anyone's layoff, I believe strongly the Colorado Springs telesales group should cease to exist. At least in its current capacity.
Only a bold, meaningful move such as eliminating this group will finally prove to SMB VARs and integrators that HP is serious about its commitment to channel partners serving that marketplace.
HP should reassign the call center staff to a sales support role for channel partners selling into the SMB space. Call center representatives should be working closely with partners to identify sales opportunities for the brand through the partners.
Rather than competing with partners, these folks should act as a conduit between the partner and the HP resources the partner needs to help close the sale.
HP CEO Mark Hurd said Tuesday the vendor wants to reinforce its focus on channel partners that are loyal to the HP brand. Hurd used the blackjack term "double down" to qualify this pledge.
It's a safe gamble. A bolder play would be to reassign the Colorado Springs call center as previously prescribed. Doing so undoubtedly would do wonders to widen HP's loyalty base, thereby boosting the brand's market share.
It also would unequivocally show HP's loyalty to its SMB partnersthe kind of loyalty that judging from Hurd's statement, HP seems to want back from partners. What I am proposing here is adherence to the ole "do onto others" maxim.
HP seems to want it both ways. The vendor wants loyal channel partners but it also wants to continue selling directly to SMB customers.
For its own good, HP needs to come to the same realization that others already have: Working through the channel is the most efficient and economical way to corner the SMB market. Small businesses want to do business with other small businesses that have a vested interest in meeting their IT needs, not distant call centers primarily interested in making quota.
It's time HP accept this simple fact.
Pedro Pereira is a contributing editor for The Channel Insider. He covered the channel from 1996 to 2001, took a break, and now he's back. He can be reached at email@example.com.