Awards case study: Global loyalty programme helps Lenovo retain newly acquired customers
Following the acquisition of a new server division, Lenovo worked with Motivforce Marketing & Incentives to employ a channel loyalty marketing programme for retaining international customers and increasing its revenue
Lenovo is a Chinese multinational computer technology company with headquarters in Beijing and North Carolina, USA. It is the world's largest PC vendor by unit sales and fourth largest smartphone company. Lenovo has a global turnover of US$46 billion and 58,000 employees worldwide. The company operates in over 60 countries, selling to customers in over 160 countries. In 2014, IBM sold its System X86 server division to Lenovo, including its international business partner (BP) distribution channel.
IBM’s business partners in 60 countries were encouraged to switch to Lenovo’s BP distribution channel for selling System X86 servers as of 01.01 2015. Lenovo is known as a leading manufacturer of PCs and smartphones, but had limited experience in the server market. These BPs had been loyal to IBM – a quintessentially American brand - for sales of System X server products for many years and they were unaccustomed to doing business with a hungry Asian company like Lenovo, let alone one which was unknown for manufacturing and selling servers.
The potential for their scepticism of Lenovo’s credibility was significant. These BPs are also still resellers of IBM’s high value server products in their respective markets, as well as associated products from coalition partners (eg. SAP, Q Logic) plus numerous other suppliers (HP, Dell, Oracle, etc). The challenge for Lenovo was to migrate these System X86 sellers across from IBM to Lenovo; to convince these resellers to remain in the distribution channel; and avoid them defecting to an alternative vendor of entry level servers.
Designing and delivering an innovative channel loyalty marketing programme was critical to successfully meeting Lenovo’s objectives of:
- Migrating IBM System X86 resellers in 60 countries worldwide to Lenovo and convincing them to stay in the distribution channel under the Lenovo brand.
- Ensure the ongoing loyalty of these resellers to Lenovo and grow Lenovo’s presence in the entry level server market.
Motivforce developed the Lenovo LEAP (Lenovo Expert Achievers Programme) structured around two components - Learn and earn which awarded participants with points for completing educational modules online; and 'Sell and earn' which rewarded participants for selling eligible Lenovo server products. The programme was translated and delivered in 60 countries.
In addition to the overall objectives, Lenovo set the following targets for the 2015 LEAP programme:
- Achieve 10,000 completed education modules by LEAP participants.
- Achieve revenue of US$170M of sales of eligible products by LEAP participants.
- Achieve 500 reseller firms participating in the programme.
Media, channels and techniques used
The LEAP programme was delivered via a user-friendly portal and structured around two key components:
1. Learn and earn - Servers are complex products requiring specific selling skills and expertise. This component provided incentives for educational and learning behaviour. Throughout the course of the year, educational modules were released. LEAP participants were awarded points for completing a range of online key learning and core capability modules no matter what their skill level:
- Quick learn modules – Each one takes 15-20 minutes and provides a high-level overview of Lenovo products.
- Skills enhancement courses – Training takes 1-2 hours and equips participants with skills that can give them a competitive edge.
- Custom guided education roadmaps – Participants complete an assessment test. Based on their answers, a customised road map is presented outlining education requirements.
- Certifications – The highest accreditation BPs can achieve, placing sellers and their company at a distinct advantage to grow potential revenue and gain market share.
2. Sell and earn - This component of the programme motivated the participants to sell Lenovo server products and solutions. The online LEAP portal allowed individuals to capture their sales figures, which were then tabulated and points were awarded for sales of eligible products.
In addition to the 'learn and earn' and 'sell and earn' components, participant engagement and the success of the LEAP program was also driven by:
- The LEAP portal - Provided a tool to help participants boost their technical knowledge and selling skills.
- eDM communications - Participants received targeted comms announcing new course modules, account statements, and eligible product promotions.
- Lenovo Expert Technical Sales ‘LETS’ repository - Pre-sales technical information to help participants sell Lenovo products and solutions.
- Live chat and request generator - Connected participants to a team of multilingual experts for help with proposals, bids, advice and technical knowhow.
- Bespoke Analytics - Detailed reporting for each individual showing educational progression and sales efficacy.
- Social Badging - Social recognition platform that issued ‘badges’ which participants can share on their personal social media sites (Facebook, LinkedIn, etc).
The logistics cannot be underestimated – 5000 participants, 700 firms in 60 countries involving eight languages. Despite these challenges, LEAP’s results were outstanding. The LEAP programme not only encouraged the former IBM BP channel to migrate and remain loyal to Lenovo, it more than doubled the active user base and achieved significant revenue for Lenovo – 40% over target. The number of educational modules completed by LEAP participants was a phenomenal 200% over target. The most emphatic measure of the programme’s success was the sales efficacy of LEAP participants, who sold seven times more Lenovo products than non-participants in 2015.
“We regard the 2015 LEAP program as a phenomenal success, particularly as it exceeded our most optimistic expectations in what was a turbulent year with the divestiture of the X86 business from IBM to Lenovo. We were presented with the tasks of building a new channel loyalty program from scratch whilst enticing traditional and long term IBM resellers to switch alliances to Lenovo.
"Further we had to build a programme that educated participants on our new products and Lenovo’s mode of business and as well as having the loyalty tools and motivation to generate a superior sales performance." Garth McKinney, Lenovo EBG channel marketing and enablement.