HP Practices Tough Loyalty
By John Hennessy
Last week, Hewlett-Packard CEO Mark Hurd warned HP will cut partners it deems not sufficiently loyal to the vendor.
“For the people who want to play with us, we are going to play with them twice as hard,” he said. “To the people that don’t, we are going to get them out of here.”
The “iron fist” Hurd plans to use in teaming with partners includes eliminating market development funds for partners who sell a solution with as much as “35 percent to 40 percent non-HP components.”
Longtime loyal HP partners applauded Hurd’s pledge. Pete Busam, vice president and COO of Decisive Business Systems, a Pennsauken, N.J.-based HP partner, called Hurd’s message a shot across the bow of partners going to market with HP in a spotty manner.
But Ron Cook, president of Connecting Point of Las Vegas, said he may look elsewhere if HP follows through with its loyalty litmus test. “We sell a lot of HP,” he said. “They are a major vendor. But if they do that, sorry, but goodbye. I don’t want to leave, but if they are planning to divorce me, they leave me no choice. I must maintain vendor neutrality.”
John Thompson, vice president and general manager of HP’s Solution Partners Organization Americas, said the company has “no hidden agenda” regarding channel program changes that reward solution provider loyalty. The move to drive higher attach rates is a process rather than an event, he said.
“We have been rolling out programs around loyalty and attachment for quite some time,” Thompson said. “If a partner sells some other products from other vendors, that is part of business. But those partners that pursue us strategically, we will work with strategically. Those partners that pursue HP opportunistically, we will work with opportunistically.”
Moderator’s Comment: Can loyalty be demanded of vendors or customers? What must retailers do to create a sense of loyalty with those parties it does business
HP’s new approach to loyalty with their VARs is just plain wrong. Good VARs deliver solutions that best satisfy the needs of their customers. That’s the
approach that generates additional business for the VAR.
Those solutions will include more HP products when HP products offer the best value and performance.
Rather than demand loyalty as HP’s Hurd has done, HP should work with its VARs to determine why its products are not included more often. What features are needed? What support
By insisting on loyalty rather than practicing loyalty to its VARs, HP is engaging in loyalty abuse. –
John Hennessy – Moderator