Lenovo Fine-Tunes Partner Strategy as Sales Continue to Defy Gravity

By TC Doyle Comments
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Results from Lenovo’s recently completed fiscal 2014 fourth quarter and year end provide additional proof that Chinese tech giant Lenovo Group is out-performing the market — so much that it can afford to fine tune its channel strategy as it enters into a new fiscal year.

For the year ended March 31, 2014, Lenovo reported net earnings of $817 million on sales of $38.7 billion. The results were up 29 percent and 14 percent over last year, respectively.

In virtually every category in which it competes, including desktop PCs, notebooks, tablets, servers and smartphones, Lenovo grew significantly. In fact, in almost every category, it grew ahead of the rest of the market. In worldwide PCs, for example, Lenovo increased its market share 2.1 percentage points, to 17.7 percent, in 2014. In contrast, the overall industry declined 8 percent during this same period, according to the company.

For the year, Lenovo sold an astounding 64 million phones and tablets, and 55 million PCs.

In the Americas, Lenovo says it grew sales by 18 percent. Chris Frey, vice president of the company's North America channel and SMB sales, told Channel Partners in an interview Wednesday that the company is defying critics by simultaneously growing sales, increasing market share and building its channel ecosystem. In fiscal 2014, the company added 3,200 partners, 1,400 of which resold products on behalf of the company for four quarters in a row.

“We are especially proud of how we are moving at speed and scale, and leveraging partners," he said.

For the third consecutive year, Lenovo partners generated more than 85 percent of the company’s revenue. Why so much channel success? Frey said it was because the company offers a value proposition that is hard to beat.

“Our programs are simple, predictable and consistent," Frey said. In addition, he added that Lenovo is preparing for a time when it will need greater expertise in the field and adding more field resources.

With a great deal of training and enablement completed in 2013 and early 2014, Frey said the company is evolving its channel strategy to the point where it is encouraging partners to go to market in a more independent fashion. While quick to point out that Lenovo will continue to offer world-class education, marketing and technical support, it wants partners to close business with as minimal input from it as possible.

“When partners need us, we will be there," said Frey. “But we recognize that if our partners can recommend and sell our products without waiting for our involvement, they can close business faster. When they have to wait for us, the sales cycle slows."

To that end, Frey said Lenovo will to develop programs and products that don’t require the company's assistance to sell whenever possible in the SMB customer segment.

“Regardless of what anyone in the market says, we are not resting. We are scaling, putting more resources in field and on the phone than ever before. We are doing everything we can to help partners sell at speed," said Frey.

If financial results are any proof, the strategy appears to be resonating with partners.

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