HP’s Customer Intimacy

An intimate relationship-that’s what
HP is looking forward to having with its customers in 1999.

Are you a customer of
Hewlett-Packard? Well, you sure would have been bombarded with courtesy calls from HP
executives this new year. In addition there would have been calls from HP’s channel
members, telesales executives, and emails on New Year wishes from the company’s web sales
crew. Now, hold your breath. There is more. As a customer you will also receive birthday
wishes for your family and relatives in the coming year.

Well, this is all under Hewlett-Packard Asia Pacific’s new focus on what it calls Customer
Intimacy-being close to the customer ‘to understand his needs better’. Not that HP is not
close to its customers. But what prompted this restructuring of the marketing setup is the
recent emphasis on service and support that HP is undertaking worldwide. Adrian Koch, VP
and GM, Commercial Channels Organization, Asia Pacific, HP, talking about the performance
of storage products, says, “Because of services revolving around the products, it
helped us grow 60% in a market (Asia Pacific) where the business situation was not very

Addressing the channel members for the HP Information Storage Group, Koch outlined the
major initiatives for the year 1999 concerning the channel. He urged them to shift toward
an end-user centric sales and marketing strategy. Besides fine-tuning traditional channel
model, this strategy includes building ecommerce/telesales capability with the ultimate
aim to provide channel fulfillment to the customer. And what is the objective? In Koch’s
words, “I think we should know the birthday of every customer’s grandmother in Asia

The strategy outlined for 1999:
* End-user centric sales and strategy by closely partnering with the channel.

* More feet on the street for enterprise and corporate customers.

* More focused to understand customer needs.

* Deeper understanding of value providers.

* Closed loop lead management.

* Channel telesales infrastructure.

* Channel centric e-business (supply chain efficiency, e-marketing and e-transaction).

This ambitious strategy has already been rolled out with Web-based sales having started in
Singapore during October 1998 and in Australia in December 1998. Digiland Shopping Center
in Singapore and Harris Technology in Australia, channel partners of HP, are selling
through the Web, as part of the new strategy. In fact, Koch claims HP to be the first
organization to start e-business in the Asia Pacific region, earlier than competitors like
IBM or Compaq.

The strategy’s strength is in the tying in of the telemarketing initiative with the supply
chain and the Web-transaction. In the words of Koch, “The channel centric end-user
telesales strategy will be complementary to the e-business.” And this telemarketing
initiative will be on the end of the channel, while the Web marketing will be the
prerogative of HP, with the actual supply of products being undertaken by the channel
again. As part of putting more feet on the ground, the ISG strength in HP India, for
example, has increased from one to two. Thus, for HP and its customers, 1999 is expected
to be an intimate year.

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