HP is one of several companies attempting to differentiate itself through sustainability efforts. But since 87% of HP’s revenue is driven through the channel, failing to loop in the channel would limit the company’s progress. So, given that 98% of HP’s partners have opted-in for data sharing under the HP Amplify program, HP can monitor and provide incentives that result in growing participation. That’s tied to the $3.5B in revenue HP attributed to sustainability efforts linked to new sales. HP has over 10K partners that collectively could have a huge material impact on electronic waste containment and other sustainability programs.
This week, let’s talk about how data sharing in the channel can enable a tremendous positive impact on the planet and drive meaningful benefits to both the bottom line and sustainability efforts.
The problems with data sharing
Data sharing with the channel is anything but common in any segment largely due to two things: data incompatibilities between systems and distrust by channel partners with large companies that may use this data to bypass the partners. The first problem should be relatively easy to fix in the tech market because technology should be able to help partners pick compatible systems but often don’t stress this compatibility in their channel. The second problem is an issue if the company has a direct sales force in competition with their channel. When this conflict arises, programs to protect the channel often fall short because the senior executives of direct sales commonly outrank their peers managing the channel.
Benefits of data sharing
Despite these problems, the benefits of data sharing with the channel are pronounced because the central provider can aggregate this data, determine where problems and best practices reside, and then use this information to optimize their channel. This optimization has benefits for both the manufacturer and the channel by increasing sales effectiveness, improving product reliability, better targeting new products for the channel, and eliminating bad practices, often without the need to eliminate underperforming channel partners.
As HP has demonstrated, another benefit is to coordinate cross-channel practices that can have a far larger impact on things like sustainability.
HP’s success
HP’s success is derived from two key practices. First, HP pushes most of its sales through its channel. Only 13% of sales is direct which effectively subordinates the direct sales effort to the channel and protects channel partners from sales conflicts. Second, HP uniquely treats its channel like family. Its channel events (and I’ve attended channel events from most of the OEMs over the years) feel more like family get togethers than your typical channel meeting. In fact, HP’s events remind me more of the direct sales conferences I’ve also attended over the years. HP’s channel partners are treated like, and appear to believe they are, part of HP’s family.
This combination of prioritizing the channel over direct sales and treating the channel very well has created a unique benefit for HP, one that now allows it to effectively drive sustainability efforts through its channel, which significantly increases the benefit and enables the reported $3.5B in additional sales tied to it. Through this tight coupling, HP has converted 20% of its channel, doubling the initial target for sustainability and should easily exceed the target of 50% by 2025. If HP continues that strategy, the target could be closer to 100% by that time.
Wrapping up: Making a difference at scale
Virtually every major technology company has increases sustainability efforts which is driving sales reported in the billions. But HP’s program stands out by aggressively looping in voluntary efforts by its channel for what appears to be the largest reported impact so far. This would not be possible had not HP eliminated most channel conflicts and exhibited behavior that resulted in a relatively high level of trust by its channel. The result is that HP gets access to channel data that its peers do not. This data and channel support can drive cross-company campaigns to make meaningful differences in everything from sales volume to eliminating waste and, using shared best practices, still improve the overall efficiency and profitability of both HP and its channel.
In the end, sustainability efforts must be as broad as possible to have the greatest impact, HP’s unique channel management efforts closely coupled with its data sharing capabilities allows it to accomplish things impossible for companies that don’t have HP’s level of channel support and trust. There is a huge benefit to companies and the planet for treating your channel well.
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