Hewlett-Packard (HP) is to overhaul its salesforce, shifting hundreds of middle managers into direct sales roles, and selling many of its products over the Web.
The move follows widespread criticism from customers who have found it difficult to deal with HP because of its poorly organised channel and direct salesforce.
Paul McGuckin, Gartner research director, said: "These companies can get direct sales contact with Sun and IBM but can't get direct contact with HP. We estimate HP is alienating an estimated 10 to 15 per cent of its customers," he said.
He believes a high percentage of potential or existing customers were frustrated by not getting the attention commensurate with the volume of business they were offering.
Speaking at analyst company Gartner Group's annual US Symposium, HP chief executive, Lew Platt, admitted some customers may have been trapped between the channel, which brings in two thirds of HP's revenue, and direct sales. He said he recognised customers' complaints and this was his response.
"We are certainly in the process of changing our relationship with the channel. Certain products, PCs for instance, just a year ago only sold through the channel and our direct salesforce was disallowed from dealing in those products. From today the direct salesforce is incentivised to talk to customers about those products," he said.
Initially around 200 field management will be repositioned as customer facing sales agents, while HP will also seek to recruit a number more. The company has recently announced a number of redundancies in other parts of the business as it battles against costs and very low earnings.
HP will also begin selling a number or products, including PCs, over the Internet with direct delivery. He said some channel partners would still be able to fulfil orders if customers wanted.
"Whole notion is one of pretty significant change now to deal with the issue. This is a time when it's harder to find orders than in past years, for all vendors. We hope finally to do a lot better job of serving customers in the future," Platt said.
He does not expect consistent 20 per cent plus annual revenue growth, as HP enjoyed in the early 1990s, because of the economic conditions and the difficulty of growing a $43 billion company at that rate every year. He said he hoped it could average 15 per cent growth over time.
"For us to grow at 25 per cent annually we have to grow one Cisco and about one Sun every year," he pointed out.
Platt said that HP would increasingly manufacture and sell Internet appliances, starting with a colour printer next year. Designed for novice users it will receive and print photographs sent over the Internet. HP would also focus heavily on the low end photocopier market with its high end printing technology, further treading on Xerox' toes.
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