Path To Platinum Incents Lenovo Partners To Reach Higher Ground

Lenovo’s new initiative supports partners in boosting their revenue in Lenovo products so they can ascend through new tiers, where richer incentives await.

In its PC business with Lenovo, solution provider CommQuest is going for gold. Or Platinum, rather.

The Loganville, Ga., company is pushing hard to accelerate its sales of Lenovo PCs to reach the top Platinum tier this year—where the incentives are now richer than at CommQuest’s current Gold status. “I’m eager to get there,” said CEO Mark Sanchez of the Platinum tier.

As part of a broad channel program retooling over the past year, Lenovo split its Intelligent Devices Group partners into four tiers—Authorized, Silver, Gold and Platinum—based on sales volumes. Crucially, partners receive higher incentives such as back-end rebates and MDF as they reach the higher tiers, unlike in the previous Lenovo program.

[RELATED: Rob Cato On Empowering Partners And How Lenovo Is Planning To ‘Out-Hustle’ The Competition]

Lenovo has long been known for offering business-friendly PCs that are strong on performance and durability. Those include the ThinkPad notebook line, as well as growing portfolios in ThinkCentre desktops, ThinkStation workstations and education-focused Chromebook devices.

What has changed in the past year is that Lenovo has “put more money into the channel than we have in the past” through tiered incentives, said Rob Cato, vice president and North America channel chief in the Intelligent Devices Group.

Lenovo has dubbed the effort “Path to Platinum”—and its mission is to support partners in expanding their revenue in Lenovo products. 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.

At Lenovo’s Accelerate partner conference last May, executives said the plan was to invest heavily in solution providers who went above and beyond in their commitment to Lenovo.

And that is just what has happened, Lenovo executives and partners told CRN.

“Along this Path to Platinum we really want to incent and reward those partners that are loyal and growing with us and have given commitment,” said Stacey Goodman, director of North America channel programs for Lenovo’s Intelligent Devices Group. “And we’re reinvesting back into those partners along this path.”

The Path to Platinum approach has generated positive results so far, Cato said. During just the first six months, Lenovo saw 70 partners advance into the higher tiers—moving either from Silver to Gold or from Gold to Platinum. That is two to three times what Lenovo would normally expect to see in that time frame, Cato said.

“This Path to Platinum really resonated because it gave our partners who had been in a certain tier a real reason to go grow their business with Lenovo,” he said.

DHE Computer Systems, a Lenovo Platinum partner, is forecasting 90 percent growth in Lenovo PC sales this year on top of 65 percent growth last year, said Dan Hammack, co-founder and CTO of the Centennial, Colo.-based solution provider. “If you’re all in with Lenovo and you’re pushing to climb the ladder, then you get rewarded. The programs are much more significant now than they ever have been before,” said Hammack.

The Path to Platinum initiative has been among the biggest channel moves by Lenovo during its year of retooling and transformation with partners.

During the final nine months of 2018, Lenovo’s North America Intelligent Devices Group sales through the channel rose roughly 20 percent. SMB sales growth of 50 percent helped substantially to bolster those results. Meanwhile, its market share in the U.S. PC industry hit 15.2 percent for the fourth quarter of 2018, a big jump from 11.7 percent during the same quarter a year earlier, according to Gartner.

“Those results don’t happen unless you’ve got some mojo back and some chemistry back with all of your partners,” said Matthew Zielinski, president of Lenovo’s North America Intelligent Devices Group.

Cato said that strong adoption of the Path to Platinum model has been among the key drivers of the growth.

“It’s really helping to create almost a ‘tier envy,’ if you will,” Cato said. “If I’m a Silver partner today, I want to be a Gold partner. And there’s a reason I want to be a Gold partner.”

Under the tiering system, Silver partners gain access to MDF rebates that vary by product type, while Gold partners are provided with growth incentives and access to Lenovo’s sales incentive program. Platinum partners have the additional ability to receive a multiplier on their target payments if they achieve growth goals in specific portfolio elements, such as workstations, services and premium notebooks.

In some cases, the earnings potential at Platinum could be 25 percent or more above the earnings potential at Gold, if growth and customer targets are met.

For solution provider CommQuest, profit on its sales of Lenovo PCs doubled once Lenovo put its new tier incentives in place and awarded it Gold status, Sanchez said.

At the Gold level, CommQuest can get additional benefits not available at lower tiers, Sanchez noted. Those include easier access to product demo units and the ability to be nominated to serve on an Advisory Council for Lenovo.

Lenovo has been showing that it’s looking “to get a voice from us to get reassurance that these things that are in place are working,” such as through the Advisory Council, Sanchez said.

CommQuest exclusively sells PCs from Lenovo, and the company still has a “good hike” to get from Gold to Platinum in the coming year, he said. But he’s committed to trying.

CommQuest saw $6 million in Lenovo product sales during Lenovo’s latest fiscal year, which ended March 31. That represented 20 percent growth from the prior 12-month period.

Reaching the $10 million threshold for Platinum would require faster growth. But “they’re giving you extra incentives at the Platinum level, which would definitely be beneficial,” Sanchez said. “Now that they have this Authorized through Platinum program, I can make a great deal more.”

Just the act of splitting up partners into different tiers was a smart move for Lenovo, said Pat Lonning, director of strategic partnerships and vendor relations at Electronic Systems Inc. (ESI). The Virginia Beach, Va., solution provider is a Lenovo Gold partner and focuses on public sector customers.

With the partner tiers, Lenovo has “added incentives and added targets. It’s pretty simple to follow and know where you’re standing,” Lonning said. “When we first hit Gold, they came in and gave us our rank of where we stood in public sector. We love that stuff. That’s the stuff that can resonate with your clients. You can really create some buzz around that.”

Lenovo’s push for growth has other benefits for partners that commit to expanding their business with the vendor.

ESI CTO Rich Artese said that because Lenovo is “fighting so hard to grow their business, they are willing to work extremely closely with us.”

“There are vendor partner ‘relationships,’ and then there are true ‘partners.’ Lenovo works very much like a true partner,” Artese said. “They’re willing to sit at the table to help craft the deal.”

Lenovo’s partner program—which was dubbed the Lenovo Partner Engage Program during the year—brought more of a focus on partners’ specialties over the past year as part of the new tiering system, as well. The initiative has involved creating three “Communities” segments—enterprise, SMB and K-12. All 300 of Lenovo’s Platinum and Gold partners are part of at least one of the Communities, and Lenovo now delivers segment-based messages to those partners based on what is most relevant to their businesses.

Lenovo is now “able to funnel just the stuff that’s important to us,” said Peter Scarpella, vice president of operations and marketing at San Diego-based Arey Jones Educational Solutions. The solution provider specializes in serving K-12 customers and is a Lenovo Platinum partner.

In addition, within the different partner tiers, the fact that the incentives are back-end rebates is crucial and has helped to enable more consistent profits for Arey Jones, he said.

“It’s helped us with our profitability because it’s back-end dollars versus front side. Typically, [the profits] get given away on the front side,” Scarpella said.

Ultimately, CommQuest’s Sanchez said he sees the wisdom of Lenovo reinvesting in those who invest in the company. In return for committing to Lenovo, “they’re giving you the lion’s share of the monetary reward,” he said.

In the coming year, Lenovo plans to continue its focus on supporting partner advancements up the tiers, Cato said.

Lenovo will be “really doubling down on the efforts around Path to Platinum” going forward, he said. “We want to make sure that there are more partners that are seeing the opportunity to grow their business with Lenovo.”