Hewlett-Packard (HP) Co.'s latest push for market share in the small and medium-sized business (SMB) market includes tools and products to help its channel partners sell. But the most effective addition could be the increase of 10% to 20% in the number of inside sales representatives assigned to help HP small-business partners with pricing, program participation, and the many other details that often make up the difference between a...
stale partnership and one that's growing and profitable.
Kelsy Eakin, president of Tulsa, Okla.-based Keltech, can't stop talking about how big a difference HP small-business sales rep Adam Harris made to her company's dealings with HP.
Eakin said she speaks to Harris at least once a week and tells him what projects she's working on. Harris then finds the specific HP small-business programs and resources that can give Eakin information, marketing help or other assistance to help move a negotiation forward. The right program can sometimes make the difference between closing and losing a deal, she said.
"For example, for one customer I'm going to trade in their servers, and I get a few thousand dollars [from HP] that goes against the bottom line for my bid, and that gave me the extra leverage to win the business," Eakin said. "Had it not been for Adam, I would not have known of that program."
Keltech also partners with Lenovo, IBM and Dell Inc., but Eakin said that by giving her company an inside sales representative, HP has advanced its interest and hers by helping Keltech sell more HP products.
"Our HP sales are a lot higher than any other of our manufacturers. It's because HP offers all this help that HP now accounts for half of our business," Eakin said.
"It can take forever to try to find something at HP," according to Cathy Cheesman, customer advocate for East Peoria, Ill.-based Heart Technologies Inc. "The SMB rep helped me find the right pricing for customers, assisted me with HP programs that I might not know about and with configuration questions. He's helped me close deals faster because, for example, information on pricing comes in quicker. My sales representative has cut down 75% of my workload with HP."
High-touch channel support
The increase in personal support for HP small-business channel partners is part of a strategic push into the most active part of the IT market, according to Adrian Jones, vice president and general manager of HP's Americas Solution Partners Organization.
According to IDC there are 8.3 million SMBs in the U.S. that have 1,000 employees or less and represented a total IT spend of approximately $110 billion in 2006. That's the market Jones said HP is going after.
"We are adding around 10% to 15% more people in our inside sales reps area than where we are today, which is a pretty big increase to go after the SMB space," Jones said. "That's millions of dollars more of an investment than we had done last year."
Jones said that HP small-business authorized solution providers who currently don't have an assigned Partner Business Manager or inside sales rep can now contact HP sales support representatives to get individualized help with product introductions, road maps, configurations, information on the PartnerOne program and product promotions.
HP is also enhancing its sales agent model -- the program that compensates partners who work with customers who prefer to buy directly from HP.
For example, channel partners may work with the federal government or other public sector customers even though regulations require those agencies to buy directly from the manufacturer. In such cases partners who don't have assigned HP Partner Business Managers will receive additional sales support to ensure partners get credit for a direct sale they've worked on.
HP has also introduced SMB Expressway, a new online portal that provides HP small-business partners with information on new product introductions, sales and marketing tools and training options.
"There's a lot of information that's on HP's regular online portal that really does not apply to small businesses," Eakin said. "A small business that has customers with 200 end users might not need information on big-blade or high-end storage," Eakin said.
SMB Expressway focuses on information and products relevant to smaller businesses and the needs of the partners that sell to them.
" I can go on that portal and configure a solution for a customer, and that helps me because I don't have a lot of technicians on hand," Eakin said.
Jones said HP has a three-pronged approach to the SMB market. First the company wants to simplify the way its partners conduct business with HP; second, the company wants to invest in sales, training, marketing and other resources to help smaller resellers serving the SMB space; and third, HP is developing products, like its Blade System c3000, a blade server developed for the midmarket.
"You want to get more excitement among your partners, because there are partners on your books but they're not selling much," Raymond Boggs, an SMB analyst at IDC, said. "If you can energize them, if you can sprinkle a little money on them and have them become much more excited about the opportunity, they will benefit and so will HP," he said.
By contrast, Dell, HP's main rival in the PC market, continues to focus on retail partners like recent addition Wal-Mart Stores Inc.
The small-business market continues to grow more sophisticated in its technology demands, and selling through Wal-Mart "is not a serious small-business initiative by any means," Boggs said.