Saturday, September 4, 2010

This is Not Your Father's Oldsmobile

Jay McBain
Director of Small and Medium Business,

I was surprised and somewhat perplexed when a member of the media said to me at a recent event: "This is not your father's Oldsmobile" when referring to the 5 year anniversary of Lenovo purchasing the IBM PC Company. It seems like every time I get perplexed I turn to my trusted Wikipedia to gain perspective and get the back story that I was missing.

Most people know that the saying was a marketing ploy by Oldsmobile in the late 1980s to change the perception that it was an old persons car. As Oldsmobile shut down operations in 2004, pundits would say the beginning of the end was that fateful marketing campaign which, in fact, cemented in people's minds that it was really an old brand.

When I used to ask people's perception of the IBM brand, I would get things like:

high quality

I polled Channel Partners recently (unscientifically) about Lenovo and I received:

high quality

Scrappy? Really?

I started to look back at the last 18 months and wonder how the perception could have changed. In large part, the company outside of China is still made up predominantly of ex-IBMers, the Think product line is still the mainstay, and the go-to-market strategy is relatively unchanged through the Corporate Channel.

I received an answer from a trusted colleague in the industry:

"Jay, the tone Lenovo has taken in the marketplace is completely different".

Tone? I thought it may have been the fact that we had just given away a Harley Davidson at a major event and I just rode it through the Hotel Conference Center (much to the chagrin of the San Antonio fire marshal who issued me a sternly written letter I might add!). But that wasn't entirely it.

So I looked back and tried to understand tone. What is it? How do you change it? What should your tone be to win in the Channel?

Here is what I came up with:

1. Be simple and consistent - not just saying it in keynotes, but mean it. We reduced 26 programs down to 6 last April and removed all artificial clip levels, tiering, and reporting requirements. This put a Channel partner selling one ThinkPad on the same playing field as someone selling 1,000. It also increased margin ability on PC products to another late 80's phenomenon - 20%!

2. Product portfolio - reducing complexity and ensuring better availability. Last April there was over 1,000 different part numbers available from Lenovo in Distribution - today there is under 150. By making focus models that adhere to the 80/20 rule, stocking was simplified, supply chain corrected itself creating pricing parity with market and we could place more bets. Another automobile industry learning is that the average Oldsmobile had hundreds of options to choose from creating buyer confusion and negative post purchase behavior. The typical Honda, in contrast, may have less than 10.

3. "Batting singles versus home-runs" - Community marketing. Part of our heritage (in marketing circles) was to aim for the fences - choose 2 or 3 big plays and knock it out of the park. The world has changed significantly for the Channel in the last few years with the explosion of vendors, programs and mountains of information. We were small and nimble enough to see the shift in information gathering and decision making to IT peer and community groups.

I wrote a previous lengthy blog on the subject, but joining over 30 communities in the last year (hitting singles) was a big contributor to 50% growth in revenue in SMB. In fact, there is a recent case study and SmartBrief that reviewed this in more detail.

4. Dandelion Marketing - spreading seeds in the Channel. One surprising result of joining 30 community groups was the number of outlets we were gaining to spread our message. There are 30 marketing vehicles ranging from a simple tweet to a massive event and everything in-between including webinars, bi-weekly emails, web portals, podcasts, vodcasts, virtual tradeshows, press, forums, etc. Creating and curating content for 30 communities and 30 marketing vehicles meant 900 stories we had to carry on every day. This explosion in content and delivery grew our message exponentially and ensured that we could communicate in the most preferred method of the specific audience member.

That's when it clicked for me. Once you get your house in order, being visible every day is the key that perhaps others are missing. You can always spend time behind the scenes trying to perfect product, price, sales coverage or operational metrics - but the real action is outside the firewall. Being authentic, well grounded in service and support, and having a world-class product are table stakes in this environment - having the personality, tone and added value communities are looking for is the real answer.

Oh yeah, being scrappy is important too.