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February 26, 1989

IBM CUTS COMMISSION IT PAYS ITS US SALES REPRESENTATIVES ON REFERRALS TO 80%

By CBR Staff Writer

IBM has cut the commission paid to its US sales representatives for referrals to Industry Remarketers to 80% from 100%, writes Computer Systems News. The decision comes hand-in-hand with plans to triple the number of IBM Authorised Agents during the course of the year. The moves, designed respectively to provide IBM with a true revenue picture and greater geographic and industry-specific coverage, appear to have left all the parties concerned disgruntled. Resellers, who seem to fear that IBM’s commitment to partnering may be declining, are quoted as describing the new measures as troubling. Meanwhile agents uncompensated for sales made in conjunction with resellers – are steeling themselves for vigorous competition widh resellers who currently share the same territory. And even IBM’s US sales and services group chief, George Conrades, conceded that, under the new compensation regime, the job of an IBM sales representative will become tougher. Some resellers maintain that IBM’s one year-old Business Partnership scheme has enhanced relations between IBM’s direct and indirect sales teams. But when reduced compensation rumours originally began to circulate last month (CI No 1,095), commentators both inside and outside IBM seemed to agree that any cuts could have unfortunate repercussions for the firm.

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