Channel Chief
“We have evolved new rules of engagement”
 There have been voices of dissatisfaction among APC partners with regard to the company selling directly to customers. Gaurav Burman, Director, Transactional Business, APC India, candidly admits the issues and spoke to K R Nambiar about what his company is doing to resolve them
Can you explain your channel structure in the country?
We have national distributors such as Ingram Micro, Redington and Rashi Peripherals. As of the last quarter, APC has 6,237 partners who have engaged at least once in a quarter with one of our national distributors to transact on an APC product. There are about 1,800-2,000 channel partners who engage more regularly. The transactional channels which predominantly buy less than 5 KVA are divided into A, B and C categories depending on the volumes they purchase. Some of the C-category partners, who buy in excess of 200 units a quarter, also play the role of sub-distributor by catering to thousands of partners who do not have credit facilities from our national distributors.
There are about a dozen partners, mainly the large SIs and OEMs, who engage directly with APC for various reasons from pricing to logistics.
Recently there have been voices of dissatisfaction among your SI partners with your direct selling model and also with the margins on some of the deals. What are you doing about it?
There are historical reasons behind this. As you are aware, APC was acquired by Schneider Electric, which had already acquired MGE in 2003. While APC was largely channel-driven prior to the acquisition, MGE’s business model was mostly direct since it focused only on the 40 KVA and above business. In the last two years we have been through the integration of both business models in the newly aligned APC-MGE India. This has meant that we now do a mix of both direct and indirect business, and some of our partners have seen that their existing accounts are now handled directly. There had to be account realignment for other reasons including competition, demand from enterprise accounts and logistics.
To resolve this we have evolved our own rules of engagement and a named account policy. We have about 140 named accounts with whom we engage directly, and are also working on a model to work with our SI partners to address their claims of lost opportunities. It’s difficult to satisfy all stakeholders, but we are working toward it.
We have also evolved a model to ensure that there is no confusion among partners about who exactly is handling specific accounts. We have come up with a 7-step sales process which helps partners log-in and lock-in opportunities with APC following which we will work exclusively with the partner on the locked-in opportunities.
What new programs are you launching for channels?
We regularly announce, re-configure and re-evaluate our channel sales programs. Most probably, in early June, you will see us launch a new program which introduces slab-based support and rewards. For example, a provider who sells even one UPS a quarter is eligible to receive leads, while someone who does 25 UPS or more gets training, rewards and even retail marketing support for his shop.
We are also working to ensure that our partners who stock and sell grow in the value chain. In June last year we had moved all products between 1.5 KVA and 5 KVA to the stock-and-sell model; this helped many partners to graduate beyond the SOHO business to handle small business accounts. This year we will be training our partners to tackle bigger opportunities.
Are you focusing more on C- and D-class cities these days?
Yes. We presently engage with partners in 270 cities, and plan to grow to around 400 cities by year-end. This is a bit of a challenge because between our national distributors we cater to only about 60-65 locations. To cover more territory we are using a hub-and-spoke model, where, attached to a distributor location, we will have a person who will cover a specific territory and help to grow the business in that region. For example, in Punjab, Rashi Peripherals has branches in Chandigarh, Ludhiana and Amritsar. But APC has a co-funded sales coordinator who will try to develop business in Hoshiarpur and its surroundings. We are looking at hiring, along with Rashi, around 40 such executives across the country this year.
How is your retail strategy evolving?
A couple of years ago we ventured into retail through LFRs and specialty stores. While retail looks promising, it still accounts for a single-digit marketshare of our consumer business. We are now working through an exclusive sub-distribution channel to cater to the retail segment instead of using the national distributors.
Like HP or IBM, are you also creating data center specialists?
Yes. We are training and certifying our SI partners to address the data center market. We presently have 22 certified partners, and the number will grow to 35 by year-end. We offer a mix of direct and partner-based support. We have 62 authorized service providers who support customers across 600 locations. |