Stimulating Future CustomersBy Lawrence Walsh | Print
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Michigan solution provider Tech Experts is launching its own economic stimulus program by offering free hosted e-mail to small businesses struggling to survive. While there are no catches or obligations, the program may just cultivate new, loyal customers for when the economy recovers.
Federal Reserve Chairman Ben Bernanke has declared the recession over, and with good reason. Banks and financial services firms are on the mend. Housing starts and existing home sales are climbing. The markets seem stable. And many of the Fortune 500 set are once again declaring profits.
After a year of the worst recession this country has seen in three decades, it appears the economic storm clouds are starting to break. There’s just one pesky indicator that continues to point in the wrong direction: unemployment. And nowhere is the job loss felt more profoundly than in Michigan, which has suffered from the long, slow and painful collapse of the automobile industry. The one-time heavy manufacturing capital of the world has the highest unemployment rate in the country—15.6 percent—and it’s still climbing.
Witness to Michigan’s economic woes is Thomas Fox, president of solution and services provider Tech Experts. Located in Monroe, Mich., the midpoint between the manufacturing centers of Detroit and Toledo, Ohio, Tech Experts has watched its customers suffer catastrophic losses as the heavy iron companies slash jobs and, consequently, IT spending. While the recession is forcing many displaced workers to become entrepreneurs, finding money to invest in basic IT services such as e-mail and Websites is difficult to find.
Fox, known in the channel for his marketing savvy, is taking a page out of the Obama administration’s economic recovery playbook and launching his own stimulus program to help would-be customers. For the next year, Tech Experts is giving small businesses with 10 or fewer employees free hosted SMTP POP3 e-mail and, if desired, a sharply discounted basic Website.
"The national economy may be turning around, but the micro-economy in southeast Michigan has never been worse. Unemployment is above 15 percent, and I have a lot of customers that are hurting," Fox says.
Fox came up with what he’s calling Tech Experts’ "Email Stimulus Program" about four months ago as he watched longtime customers cut back on their IT spending as the local economy spiraled out of control. He witnessed firsthand the interconnectedness of manufacturers, their suppliers and the companies that subsist on their economic activity. When Ford shut down a local car factory, not only were the parts suppliers affected, but so also were all the local restaurants, retail stores and services companies. A local gym that Tech Experts supports lost nearly half of their members when Ford pulled the plug.
By providing free e-mail to new and former customers, Fox hopes to give small businesses a small, albeit, important break as they struggle to find their footing while the economy recovers. He hardly thinks the initiative will have the same impact as "Cash for Clunkers" did for carmakers, but it may be enough to help a displaced autoworker get his construction company or repair shop off the ground.
Providing basic POP3 e-mail isn’t the most expensive service, but the expense of scaling it across dozens of would-be small business customers could add up quickly. Fox is able to extend himself through the stimulus program because of the infrastructure he’s already built for his managed and hosted services. Every managed service requires a certain level of unutilized capacity to buffer against capacity demands. Fox is simply exercising the well-worn managed services principle of the more you serve, the lower your costs become and the higher your profitability will rise. The stimulus program, he believes, will have a minimum impact on his expenses and only slightly dampen profitability.
Fox makes numerous assurances that the service offer is absolutely legit with no hidden fees or catches. But there’s a business development angle to his program. Once the lid is off his initiative, he expects many of the local media outlets to write articles that will get small businesses interested in signing up. Once they’re in the program, he will build a list of prospective customers to convert to higher level services when the free 12-month plan is over. "It gets our feet in the door with folks that aren’t familiar with us," Fox says.
Several IT vendors and manufacturers are offering special rebates, discounts and financing labeled as "stimulus programs." But many of those programs are simply designed to get existing customers to trade in old equipment or buy new machines. Few of them are actually aimed at building expanded and sustained potential customer pools. Fox’s program has the benefit of being both altruistic and, potentially, profitable, since it's cultivating a new set of potential customers that have experience with Tech Experts’ services and delivery capacity. What Fox is betting is that when these businesses get healthy they’ll turn to Tech Experts first instead of shopping around for their IT product and services needs.
"The key to all of this is to keep top-of-mind awareness when their need comes around next time," Fox says.
In the end, the Tech Experts Email Stimulus Program could have two waves of benefit: helping small businesses during these tough times and propelling Tech Experts forward when the economy is recovered. That’s a stimulus plan that keeps on giving.
Lawrence M. Walsh is vice president and group publisher of Channel Insider. Click here to read his blog, Secure Channel, for the latest insights on security technology and policy trends affecting solution providers.