Making sense of Best Buy’s push into the SMB space . . .

Ok, for those of you who are either outside North America or simply have been living under a rock lately, Best Buy is making a move into the SMB solution space.  Specifically, they’re rolling out a Best Buy for Business program, and naturally using their Geek Squad as their troops on the ground.  Since it seems like just about everyone has an opinion on this topic, I figured I might as well dive in myself  ;^)

Now I know that most of us SMB partners have the same initial reaction when someone mentions the Geek Squad – and it usually consists of a bit of a smirk, a shake of the head and a little laugh to ourselves.  But before you shrug this off and discount this whole thing as a non-event, you need to sit back and take this seriously . . .

It is too early to be forecasting doom and gloom, as well as the utter demise of the traditional SMB var.  However, you’d be very naive to think that Best Buy can’t grab a piece of the market solely on their marketing might.  And they are making a solid effort, with their techs going through an intensive 2 week training course on SBS.  Of course, the providers this will affect at first are the part-time one man shops – the ones who have a couple clients that they work with at night and on the weekends.  Not to generalize, but it has been my experience that the majority of these guys have skills on par with your average Geek Squad member.  Basically, Best Buy will be able to capture the price-sensitive portion of the market without much effort.  Will they implement ideal solutions that follow best practices right away?  Probably not.  But depending on how Best Buy manages this will depend on how much of a threat they become.  If they implement their own internal knowledge base, have knowledgeable senior-level techs that support issues can be escalated to, and do simple things like training their techs how to plug into this amazing SBS community we have out here, they could easily move up the stack and start getting more business from the section of the market that isn’t necessarily price sensitive, but isn’t aware of their other options.

I don’t doubt that the Geek Squad will never be as reliable as the SMB var, and will never enjoy the level of trust that we have with our customers.  But just because they can’t be as good as us, doesn’t mean they can’t take business from us.

So, what do you need to do now to ensure you successfully weather whatever storm this might generate?  In all honestly – nothing that you shouldn’t be doing already.  You should be constantly working on your sales effort.  The point here is to not only drum up new business, but to constantly increase your name recognition.  Sure, most of the people you call today probably won’t be interested in your services today . . .  but the more they see your name around town, the more likely they’re going to call when they are interested in your services.  Next, review your SWOT analysis (Strengths, Weaknesses, Opportunities & Threats).  What are your strenghts as a technician?  as a business?  What sets you apart from your competition?  For example, with Best Buy we’re different because first and foremost, we’re service providers.  We’re not looking to sell a PC or a router, or a printer, or whatever.  Also – we’re often hardware agnostic – where the likes of Best Buy will be pushing what they have in stock.  Our biggest strength is that we’re small business owners ourselves – and can relate with our customers.  Regardless – find what sets you apart and determine how you can exploit that.  Then communicate that to your leads – maybe put together a sell sheet on what makes you different than the rest.  You may also look at focusing on a few vertical markets, where you can provide experience & expertise on their needs as well as various LOB apps their industry uses.

So – take a look at your organization and what you need to do to grow your customer base and increase your name recognition, and try to stay one step ahead, and offering services that Geek Squad either doesn’t or can’t offer.  One way you can stay ahead is by making the move to managed services.  The bottom line is the last thing you want to do is sit idly by with your head in the sand thinking that Best Buy isn’t a threat.  Granted, they may not be a big threat to you today – but who knows what the landscape is going to look like in a couple years?  Maybe SBS Longhorn will be super-simple to install & setup.  And what if Best Buy hires more & more truly capable technicians? And what if they make the move in to the managed services realm – maybe even purchasing an MSP software company like Kaseya, Level Platforms or N-Able?  Next thing you know there is a strategic alliance between Best Buy & Dell, where the Geek Squad provides Dell’s onsite installation & warranty services.  Best Buy also becomes a Dell partner – they get better-than-web pricing based on their volume, but they don’t have to stock anything.  They configure and sell Dell stuff on demand, and Dell keeps their direct model by only building machines when they’re ordered . . .   

And we all know that when it comes to SBS sales, Microsoft is focused on one thing, and one thing only – new sales.  There is only a very small percentage of small businesses that currently have a server – and Microsoft is drooling when it looks at the tens of millions of small businesses without a server – a market waiting for them to conquer.  It only makes sense that Microsoft would do a huge co-branding advertising campaign / blitz to drive small businesses to Best Buy, because next to the OEMs, Best Buy is going to be in the best position to push SBS.

So now in our hypothetical scenario, we’re a couple years down the road with Joe the small business owner seeing newspaper, billboard & TV ads about Best Buy for Business.  He also sees Microsoft ads pushing him to either Best Buy or a number of big-box retailers that have put in their own Geek Squad like service offerings.  He can have a Best Buy Business Technology Consultant (BTC) come out to his business, assess his needs and provide a written proposal.  If he wants Dell hardware, the proposal includes a link to a saved cart that the BTC has already configured.  He signs the proposal to accept, pulls up the Dell cart online and plugs in his credit card number.  The Geek Squad finishes the 15 minute OEM installation on the SBS, brings it out and installs it complete with their monitoring software.  Their managed services agreement is automatically billed to Joe’s Best Buy card every month, and they have a handful of data centers across the US where a team of engineers are watching the multitudes of monitored systems.  When something comes up, they either take care of it remotely, or if it requires a visit contact the customer and either have the customer bring the system in (hey, it’s still Best Buy ;^) – or for a higher fee, schedule a Geek Squad member to go out onsite.

You have to admit – it would be a little harder to sell against that offering . . .    and it isn’t much of a stretch of the imagination to see most of that hypothetical situation come to pass. 

So . . .   now about that sales effort of yours . . .      :^)

For some interesting reading on the topic, check out these posts of Vlad’s:

Best Buy for Business to End SMB IT Consultants?
http://www.vladville.com/2006/02/best-buy-for-business-to-end-smb-it.html

Best Buy vs. SMB IT Consulting: Part 2
http://www.vladville.com/2006/03/best-buy-vs-smb-it-consulting-part-2.html

Best Buy now Gold Certified Partner
http://www.vladville.com/2006/03/best-buy-now-gold-certified-partner.html