Compaq customer agency program sparks more reseller dread

Compaq customer agency program sparks more reseller dread

Compaq Australia again has its resellers on edge after refusing to rule out the possibility that a strategy similar to the "agency program" recently unveiled in the US could be adopted locally.

In the face of stiff opposition in the small-and-medium enterprise (SME) market from pure clones and the offerings of direct vendors like Dell and Gateway, Compaq in the US has embarked on a new strategy to increase its sales.

In addition to boosting the advertising spend for its DirectPlus online ordering system, Compaq is also extending its reach into reseller accounts.

While promising not to make outbound calls to gain new customers, Compaq intends to take over the relationship with customers from inbound calls even if their name appears on Compaq's database as a reseller customer. Compaq will then pay the reseller a fee for dealing directly with that customer.

"The program is something we are looking at locally, but we will be viewing it in the context of the strong channel structure we have here in Australia," Ben Reeves, Compaq's channel and segment marketing manager, admitted.

"In the US, the program has been driven by the realisation that there are certain markets where Compaq and its channel are not competing, but the Australian channel has done a good job of bundling solutions and services so there's no benefit in adopting it here at the moment.

"However, we will do so if we think it's going to be an enhancement to our existing business model."

That caveat is what has Compaq's Australian channel worried.

"Whenever anyone goes direct, resellers jump, and I'm one of them," Jesse Woo, account representative for Logical Additions, told ARN. "I can accept that Compaq has introduced the program in the US because it needs to protect its market share.

"I also sell clones and have to contend with the Dells and Gateways so I know the frustration Compaq feels, but they need to stand up and say where they're going to go and stick with it because this sort of uncertainty only raises suspicion and to be honest, helps the other vendors like Dell."

Another Compaq reseller, who asked to remain anonymous, said while he understands Compaq in the US is trying to cut costs by having more direct relationships with its customers, the new agency program unfairly exploits the channel.

"When the reseller has done all the work establishing a relationship and pushing the Compaq brand, it's rude for Compaq to come in and take over the customer," the reseller said. "I can see Compaq is trying to reduce costs but it's at the expense of their resellers."

But Richard McAlary, managing director of Net Options Technology Group, is less concerned about Compaq's new initiative.

"The US market is much larger than Australia and the expense of implementing the infrastructure required to support that type of strategy is more applicable to bigger markets," McAlary argues. "So I believe Compaq will continue to rely on its resellers to look after a major proportion of its business.

"Certainly the importance of resellers who do other things apart from moving boxes cannot ever be underestimated."

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