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Ashish Sikka, Director SMB, Lenovo India explains the dynamics of the partner ecosystem and how it has benefited Lenovo even during the pandemic
How has been Lenovo’s business performing for SMBs and how is Lenovo enabling these SMBs?
We have announced end to end solutions for SMBs in India which can help them to manage their workforce better and improve their employee productivity. We are focusing on Lenovo smart management, premier support, device as a service, Thinkshield and asset recovery services. Lenovo can also help SMBs and other enterprises in deployment and configuration services as well. We have also launched the ThinkBook Plus which is the first of its kind device basically targeted for doing multitasking, because most of the employees spend hours toggling between various task. ThinkBook Plus is our attempt to help users and employees to improve on the same.
How has Lenovo’s channel grown and what are the highlights of some of Lenovo’s initiatives for the channel fraternity?
We have been working with our channel partners very closely. Channel partners are the backbone of our business in India for overall Lenovo, especially for SMB business. Almost all the business which we do in India in SMB, we do through our channel partners. We keep on working with them and looking at the ways on how we can make it easier for them to do business with us, do business with their customers and at the same time make sure they are profitable in nature. There is uncertainty all around, particularly economic uncertainty. It is about where do you invest money and where you do not invest money in business and we see the same with our customers as well as channel partners. That is where our Lenovo Financial Service offering comes in handy where we offer channel financing to our channel partners, work with them to offer short term leads and long-term leads to their customers.
We have also worked across the board with our tier 1 distributors, tier 2 commercial channel partners and with the larger channel community to try and see how we can help them to solve the customer problems and that way some of the solutions which we have announced recently come in very handy for them also. We have seen channel partners use them very well during the pandemic. We all know how manpower went restricted and people are struggling, and that is where a lot of channel partners have used deployment and configuration services. This was to make sure that when the device reaches their customers it is a plug and play device and the customers also do not lose their productivity and at the same time the channel partners do not put their employees at the risk of pandemic.
Last one year we have seen our channel base grow almost 50%, all thanks to the faith and trust that they have put in us. This also resulted in our highest ever market share in Q1FI 21 where we had 33% plus market share by growing 14.7% on a year on year basis. These are very interesting times for Lenovo and for our channel partners and we are very happy to grow with them.
What are specifically the incentives and relief packages that Lenovo has devised for its partners?
Our incentive program or a rebate structure is actually one of the best in the industry. We do provide very consistent rebate programs to our channel partners. What I have learnt in so many years of doing business is channel partners look forward to two things– one is profitability, but more than profitability they look forward to predictability. The partners want to make sure that if they are investing in business the cash flow is predictable, you know what kind of profit you will be making out of that and you do not want something which gives you one quarter or one year of very exponential profit and another year it certainly goes down.
At the end of the day it does take a toll on the channel partners and their employees. Our program has been very consistent and very linear. What we have also done during the pandemic is we have worked with our channel partners to make sure that their profitability remains in picture, and they are able to serve the customers in a better way. We did work on them to identify the right use which should be calling in the market, we did work with them to try and figure out that what kind of support services we should be giving in the market.
How did you manage the cash flow challenges of the partners in the current situation?
One of the things which we have been propagating with partners and we have seen partners utilise a lot is our Lenovo Financial Services. It is the Lenovo financing arm which we have seen partners use channel financing, we have seen partners take advantage of short term leaves, long term leaves, short term rentals and long term rentals to their customers. Some of the cases where our channel was stuck up we did offer extra credit days and extra credit facilities to them to come over the pandemic situation. We have seen channel respond quite well on the same and that is what lead to our success. We saw ourselves sitting number #1 with a share of 33.7% at a growth of 14.7% year on year basis and that would not have been possible without the support of all the channel partners.
How did Lenovo help the partners remotely service the customers as both partners and customers were working from home?
The pandemic did affect everyone and also it affected our ways of working because at the end of the day we have to follow the Government of India regulation and make sure that our employees are safe because their safety and health is more important than anything else and also abiding by the laws of the country. When we looked at that we also had to come up with some of the innovation which was there and some of them were in progress for a long time.
Our WhatsApp support was something which worked very well for us during this time. We tried and solve as many calls over tele-support or chat support as possible so that our employees or even the customers do not have to step out of their place. Now with the lockdown slowly opening we have opened our service centre wherever allowed and we are following on the hygiene and social distancing norms and at the same time trying to ensure that we give our customers the best in class support. That way we also launched the premier support as our offering to allow our customers and partners get 24/7 support.
What changes in workloads did you see in a predominantly WFH environment and how does that impact commercially in terms of SLAs and payment cycles?
The good part is the pandemic has affected everyone; some businesses more than others but what we have seen both our channel partners and customers being very understanding of the current situation and what is possible to do and what is not possible to do. The SLAs in some part of the country have been impacted more than others. Similarly from the customers and channel partners side, payment cycle is also getting affected but collectively we have all been able to work together to overcome some of these challenges. That is where the entire business partnership between Lenovo channel partners and customers come in where we understand each other and try to help each other as much as possible.
How did you balance between retention of existing customers and acquisition of new customers?
If we look at how we look at attention and acquisition, I think for us customer is important and the customer experience which we give them is important. We also treat our partner as the customers because at the end of the day they are the ones who to bring business to us and they are the ones who make us relevant in the market.
While the consumption of laptops has grown from WFH perspective, how is Lenovo taking care of that from the security and productivity point of view, specially designed for the new normal?
One of the things which we always think about business is that you do not want only your laptop to be good looking, you also want it to be secured, and have all the collaboration tools possible and that is where our Thinkshield offering comes into play. Almost all of all laptops now come with a very simple thing like shutter which allows people to make sure that if they are not using the camera then they can physically shut it off. We have a power on fingerprint button which means you cannot hack the fingerprint pattern very easily. We have our whole host of Thinkshield services which allows for timely update of your operating system, of your BIOS so that you are on the latest piece. We have a tie up with software and services company also to provide the right software which can help in data security to all our customers.
How has been the vertical wise traction for Lenovo during the pandemic and what are your unique differentiators?
Whether we talk about rental program or we talk about device as a service we have seen an increased uptake of that from both our end customers as well as channel partners. Device as a service is a perfect solution for that because it helps ramp up or ramp down as your business is growing and as the economy is growing and that is something which we have seen more and more customers and partners take up during this time. When it comes to how to we differentiate from our immediate competitors, we look at ourselves in the fact that how we can be easier for our customers and our partners to do business with. Obviously we are in a competitive environment and we want to be the best but we do not make offerings keeping competition in mind. We make our offerings keeping our customers experience, our partner experience and how we can make it easier for them to do business with.
What has been the uptake for Lenovo’s business from an education and edtech point of view?
We have seen good growth and momentum on the SMB side. We saw us sitting # 1 in SMB in Q1FI21 with a market share of 33% plus. We have seen our customers and partners appreciate all the offerings what we are giving. We have seen new wedge EdTech startups doing very well. We also see traditional schools and colleges adopting Technology very fast who have children at home or who know people have at home do know that the children also need their own Technology device whether it is in the form of a laptop or desktop or tablet so that they can attend their online classes and at the same time the parent needs their own device so that they can work from home. This obviously is leading to to increase demand of laptop, desktop and tablets. We have seen good growth momentum across the boat.
Which other sectors witnessed significant growth during the pandemic?
Apart from education and EdTech, we have seen E-Commerce do very well and when I talk about e commerce it is not about buying for E-Commerce but apart from two or three which are there we have seen e-commerce across the board take off very well. We have seen SMBs adopt to E-Commerce very well. Most of the SMBs today have an online presence and that is something which is helping them. We have seen E-Commerce, BPO, logistics, telemedicine do very well.
How is Lenovo witnessing the recovery of MSME/SMBs? Do you think digitisation of SMBs picked up during the pandemic?
The difference is that SMB were already in this digital journey, they where are already doing digital adoption. When we talk about Indian SMBs, they want to adopt Technology and it has just got accelerated a bit. Some of the businesses which was maybe not looking at technology has started looking at technology in a new light or how it can help them to do business better and how it can help them to realise better avenues, how it can allow their employees to be more productive.
The other big realisation for SMBs and it is also a mindset change is that the work can happen remotely. Otherwise mostly in SMBs the employees had to come to office and then only the work will happen. as much as it has been a technology mindset change, it has also been a culture mindset change for SMBs. I think in long term that augurs well for SMBs because it brings down the long term cost down in form of real estate, travel and it allows for collaboration, it also allows SMB to hire best-in-class people from across anywhere in the country.
In terms of marketing and marcom initiatives with respect to partner ecosystem, what were the activities Lenovo prioritized during this pandemic?
During this time what was important when we spoke to channel partners was availability of relevant information. Lenovo Pro Connect app is an app which basically connects Lenovo directly to all the channel partners. We focused and concentrated a lot on our app, we made improvements in that, we built up and did changes so that the partners can see all the resources whether it is product, service, escalation matrix in one place. We walked unfocused so that we do not bombard our partners with unwanted information but help them to tide through these tough times because obviously they were facing the same challenges as we were.
How effectively are you addressing the upcountry market with your products and services given the fact that Covid has also affected supply chains of companies including Lenovo?
The supply chain of across the board has got affected and that coupled with the increase in demand as affected across the boat weather it is tier 1 cities tier 2 cities or beyond that. We were able to take corrective actions much faster, get our supply chains up and running. The supply chain across the world is still not fully up and running when we look at the logistics it is broken. It will take some time but we are doing our best effort possible to do that.
What were the challenges faced by Lenovo customers and partners in shifting to a device as a service model?
One of the things which is there in the back of the mind is that is this a true DaaS model or not. We go and educate, we run them through all the things which are there and we make sure that they understand that what is being offered by Lenovo is actually a true dash model available for them and this is the major challenge which we have seen in adoption of DaaS from them.
The other challenge what we have also seen are people forget that when we quote with dash we are offering something end-to-end an organisation talks about they only look at the cost of the device. They forget about the fact that the device has to be supported 24/7, forget about the fact that device at the end of the day has to be in an environmentally friendly way disposed off after the end of life cycle. Those are the cost which organisations do not build when they are buying only a device but as a responsible company when we are putting a device as a service and to make sure that the lock ends are not there for the customer we have to build in all those and that is the other challenge which we face.
What does Lenovo’s channel presence look like in India?
Year on year we have almost double presence at a country level when it comes to reaching out the smaller towns or districts. As far as the north south east west spread is concerned we are equally growing everywhere and the beauty of business is that traditionally the high-end is typically sold in the metro but for us it is spread across. It is because of the hardwork the team has done on the ground and the product features which we provide is widely accepted by our customers. Geographically also we are growing equally. As far as online and offline is concerned we are present in online and we are more focused for the customers who are preferring to have a B2B purchase. We are still 90-95% on channel business and 5% through online.
What has been the impact of the shift towards online from physical channel since the pricing mechanisms were different?
The best thing which we do is we maintain a price parity between offline and online and I think more than anything that is what we owe to our customers. We do not want our customers to be spending time on thinking that are they getting the right price for the product or not. I think what we call it internally is getting the first time right price and that is very important for the peace of mind of the end customer itself. We try and ensure that every channel whether it is online, system integrator frames, whether it is a partners in the small town everyone has its own needs.
Our team has done our detailed research and figured out what product will work in what market and what kind of channel partners will be able to service it better and we try and utilise those. We sell in a tier 1 city like Bombay or Delhi would be very different from what we sell in other places. That’s what makes Lenovo such a good partner to work with channel partners because we provide solutions across the board, it’s not that we are only strong and one single price band or one single screw it’s about how we are able to cater to the broad requirement of the partners and customers across the board.
