HP Inc. plans to revamp the HP Partner First Program this spring to reflect extensive transformation underway at the company.
The updated HP channel partner program, which is slated to launch in or around May, will formalize changes in HP’s focus on outcome- and data-driven customer strategies, according to HP chief commercial officer Christoph Schell. More than 80% of the company’s revenue is derived from HP channel partners.
The new partner program comes as HP is fighting off a takeover attempt by rival Xerox.
“There is a lot of noise about HP right now in the marketplace,” Schell said. “I think for me it is important that our partners understand that we are a technology company. We will always lead with technology. We want to innovate. We want to make sure that our customers have the best possible experience with our brand and with our partner network. For HP, this goes way beyond hardware-centric engagement. We are using our hardware strength to build a sustainable impact that we have with our customers.”
Schell said HP has prioritized a move to a model of outcome-based engagements with customers, as opposed to transactional relationships, which means changing HP’s entire value proposition.
“I think gone are the times when our customers want to [only] transact with us on a hardware device. They [now] want us to have skin in the game. They want us to be flexible. They want us to make them successful,” he said.
The shift will have a material impact on how HP goes to market through its channel partners. Outcome-based engagements require a more consultative, services-led approach, as well as a longer sales cycle, Schell said. HP channel partners will also need to engage a wider variety of stakeholders within a commercial account.
“You are still engaged with the CIO department … but you are now touching fundamental projects that are often managed by a CEO, by a COO. Think about, for example, workplace transformation,” Schell said.
Under the new sales approach, selling a printer or PC is “just one chapter in the overall value proposition,” he added. “[There] is a tremendous opportunity for our partners to sell their stacks of services and to sell other products that are complementary to HP in that offering.”
To help HP channel partners make the transition to outcome-based customer engagements, the vendors is building out its channel resources, such as training and certifications available through HP University.
“It is a big change,” he said.
Data and ‘segment of one’ strategies
A second critical area of focus is on how HP uses data that is shared by customers and HP partners to enhance customer experience and generate customized offerings. Schell believes the new data-driven approach will represent “a massive change” in the way HP pursues the PC and printer markets.
“We want to treat each individual customer as its own segment. We want to be able to predict what the customer would like us to provide for them,” Schell said.
Christoph SchellChief commercial officer, HP Inc.
He said a customer that opts-in to share data with HP would enable the company to identify the customer’s PC and printer usage patterns and make predictions on their needs through a 12-month period. Instant Ink, an ink cartridge shipping and recycling subscription service, is an example of this strategy in action. Instant Ink subscriptions offer flexible pricing depending on the amount of printing a consumer or commercial customer requires on a monthly basis. Bolstered by data, HP could further personalize Instant Ink to predict a customer’s needs and suggest products and services ahead of time.
“We are trying to make the relationship that [customers] have with HP and with our partners a one-stop shop. We want to personalize the experience. We want to help [customers] tackle [their] needs … through the year. And I think this is where data can really help,” Schell said.
He stressed that HP’s data collection practices would be aboveboard and voluntary for end users. “[Customers] obviously have to opt in. … The same is true for our partners: You will have to opt-in as well.”
More consistent global framework
In November 2019, HP redesigned its approach to global channel coverage, which the vendor had previously segmented into three broad regions: the Americas, EMEA, and Asia Pacific and Japan (APJ).
The old approach exposed inconsistencies in customer experience and HP’s operating model, Schell said. HP now organizes the globe into 10 markets that report into one worldwide structure. The new framework also seeks to standardize HP channel partner programs and pricing for some of its product categories, Schell said.
About three months into the new setup, work on the project continues, but Schell said HP has seen “a lot of positives.”
“The feedback that I am getting from partners is that they … see the benefits. They see us engaging with them more consistently,” Schell said. “It is easier for them to carry a value proposition that HP has from one market into another because we are striving for consistency.”
Schell noted that the new framework also provides HP with tighter management of some of its product categories, such as ink and toner.