Lenovo Debuts New PC Incentives To Enhance Partner Profitability

‘We're going to get even more aggressive programmatically with the partners that are more engaged with us,’ Matthew Zielinski, president of Lenovo’s North America Intelligent Devices Group, tells CRN.

Lenovo’s Intelligent Devices Group is aiming to keep up the momentum with partners through the introduction of new channel incentives geared around selling high-priority PC products and services.

The incentives include new automatic discounts and improved back-end rebates, as well as the ability for some partners to get rebates for specially configured devices, rather than just preconfigured TopSeller products.

[Related: Path To Platinum Incents Lenovo Partners To Reach Higher Ground]

"We're going to continue to pour gasoline on the fire," said Matthew Zielinski, president of Lenovo’s North America Intelligent Devices Group, in an interview with CRN. "We're going to get even more aggressive programmatically with the partners that are more engaged with us."

Zielinski unveiled the new incentives this week at Lenovo's Accelerate 2019 partner conference in Orlando, Fla., which capped a year of transformation in Lenovo's channel that saw an array of new profitability enhancements, particularly for top-tier partners.

The company saw channel sales grow more than 20 percent in the Intelligent Devices Group business during its recent fiscal year, which ended March 31, Zielinski said. Lenovo's share of the U.S. PC market—where it ranks No. 3 behind HP and Dell—reached 15.2 percent for the fourth quarter of 2018, a major jump from 11.7 percent during the same quarter a year earlier, according to research firm Gartner.

Among the new channel investments, Lenovo is instituting a "volume delegation" program that rewards partners and provides faster pricing information, executives said.

For volumes of five units or more, within premium TopSeller and workstation products, partners now receive an automatic 3 percent discount without having to go get pricing from Lenovo, said Rob Cato, vice president and North America channel chief in the company’s Intelligent Devices Group.

The program represents a "significant investment, and a significant leap of faith on our side, to be able to authorize more flexibility up front," Zielinski said.

The program will be available to all Lenovo partners regardless of what tier they’re in, executives said. Lenovo's partner program has four tiers--Authorized, Silver, Gold and Platinum—based on sales volumes.

The other new incentives will be aimed at partners in the higher tiers, continuing Lenovo's effort to support partners in moving up through the levels.

For Gold and Platinum partners, Lenovo will now be providing back-end rebates for "configure-to-order" products, which are built with custom specs based on the customer's needs. In the past, Lenovo typically only offered rebates for preconfigured TopSeller products, Zielinski said.

"You don't have to sell a predefined configuration to get paid," he said. "Lots of [vendors] don't do it that way because it's a more expensive way to build and sell a product. But we're going to put some juice there. It's definitely been an ask [from partners]. I think it could be a potential game-changer."

In addition, for Platinum partners, Lenovo is introducing a new incentive aimed at boosting sales of premium TopSeller devices and workstation, as well as services.

The incentive, dubbed the "trifecta," will provide improved back-end rebates for partners that reach certain sales levels in each of the three areas, Zielinski said. "If you hit all three metrics, there's this pot of gold that is very attractive," he said.

Andy Jones, CEO of MCPc, a Lenovo Platinum partner based in Cleveland, told CRN that the trifecta incentive is a definite improvement for partner profitability.

"We're personally excited about it because the bulk of what we were already doing is in the premium space and the workstation space," Jones said, adding that many channel partners still have more work to do on services.

Cato said the new incentives are also meant as another reason for solution providers to seek to move up to a higher tier within the partner program.

U.S. partners must hit $250,000 in Lenovo sales annually for the Silver tier, $1 million annually for the Gold tier and $10 million annually to reach Platinum. For Canadian partners, the requirements (in Canadian dollars) are $100,000, $500,000 and $2.5 million, respectively.

Cato told CRN that during Lenovo's latest fiscal year, 200 partners moved up to a higher tier within the partner program.