National Branding Innitiative (For Comment and Review)

[Mushin]

FOUNDATIONAL STRATIEGIES

Computer Service Industry
National Branding Initiative

Version 1
Draft Copy
Not for Redistribution

Copyright 2009 - 2010
Phillip A. Jones​

THE CURRENT STATE OF COMPUTER SERVICES:

The computer services industry exists in a fragmented state with a many independent companies, many independent technicians and a few national companies. The current leader in the realm of residential computer services is Geek Squad. Their affiliation with Best Buy gives them access to large marketing budgets and an international foot-print. On the flip side there are far more independent technicians and independent service companies that operate on limited budgets yet provide nearly identical services.

Geek Squad wants clients to believe that they provide the best services and that these services can’t be provided by anyone else. Many independent shops and technicians want you to believe that Geek Squad is incompetent and that they rip off their customers with inflated prices. They hire tech minded individuals with a desire and passion to play with and fix technology problems. For the most part the “Agents” that work for Geek Squad are talented individuals that are skilled in what they do. Geek Squad provides an avenue for them to get paid for working on and repairing computers. The pay can range greatly depending on the experience of the “Agent” but the end result of the employer/employee relationship is that the “Agent” makes Geek Squad large amounts of money in exchange for the services that they perform. Often times Geek Squad makes 90% revenue from the services that are performed by the “Agent.” This is particularly true with the infamous “Double Agents” that provide on-site services. It is not uncommon for a “Double Agent” to generate $500 service calls that take only a few hours to complete.

The true success of Geek Squad comes from the fact that they are the leader in branding their services on a national level and they have not compromised their prices. In fact their pricing is “inflated” because they have learned the lesson that customers are willing to pay what they charge. They know that clients are paying for their knowledge rather than for the time that the “Agent” takes to complete the service. Where once the computer service industry was driven by hourly rates, it is now driven by al la carte service fees.

The true genius of this is that customers no longer quantify the service fee to the number of hours it takes to complete the service. If you take the total cost of the service call and translate it to a per hour rate it is not uncommon to see that the client is paying $100 or more per hour that the “Agent” is on site. This is evident with a 2 PC wireless network setup. The allotted time for this service is typically 1.5hrs and the typical fee is $159.00. Assuming no other services are performed and the agent spends the whole time completing the service the client is actually paying $106 per hour for the time the agent is on site. Obviously this is quite profitable, the clients are excited to pay for the solution rather than pay for the time and both parties are happy with the end result.

In contrast the “independents” tend to react with disdain for Geek Squad. Many independents are technicians first and business owners second. They look at the services that they perform as easy and often don’t realize the true value of the service to the client. While some independents are using the al la carte pricing model many are still using the hourly rate method. Either way they lack the marketing budget to compete one on one with the leaders in the Industry and for some this has led to a knee jerk reaction to compete on price alone.

We have already seen that customers are willing to pay for the solution rather than the time but often independents tend to react with lower prices. Although having a lower price point is a valid business strategy their piece of the computer service industry is actually limited by brand or name recognition rather than the cost of the services they perform. This presents a dilemma for independents. How do you compete with a National Brand on a local level and minimal budget?

This is the problem that XXXXXXX was faced with when it was founded.


XX ENTER NAME XX: A NEW SERVICES PHILOSPHY

The founders of XXXXXXX have been on both sides of the fence and the adage that the grass is always greener on the other side is not true in the current realm of computers services. Both price and branding attracts customers. Branding tends to win simply because clients do not know who to call when they have a problem and Geek Squad is the obvious leader when it comes to branding. However, with independents and national chains offering essentially the same services the real winner is actually the entity that reaches the client first and communicates the best value to the client.

If the branding and services are essentially the same the client will pick the service that provides the best value. Often value is confused with price and many independents still make this mistake. Value is a perception based on the clients experience, desires and current state of mind. Price and brand recognition are items that alter the clients perception of the services they are in need of. Geek Squad has mastered the branding but they often fail to communicate value to the client.

XXXXXX was founded to be “advance the computer service industry.” At the core of our philosophy is the mission to unify the computer service industry by creating a common National Brand and service infrastructure under which Computer Service professionals and businesses operate collectively in a for profit enterprise. Revenues generated by each professional or business is retained by respective entity. By operating within the established branding, approved business practices, and by utilizing the collective resources these business professionals and entities are able to maximize their profits through reduced overhead, more effective marketing, shared resources, and strong brand recognition.

Thus XXXXXXXXX solves the problems and frustrations associated with being an independent computer service company or professional. By being structured in such a way that the all parties retain ownership of their business and their client base we have created an environment where members are accountable to their clients and preserve the free market nature that is lost when you have an employee and employer relationship. This strengthens each of our members and provides clients with access to increased access to responsible computer service professionals and businesses.

Currently clients simply don’t know where to turn when they have computer problems. Usually they will call their friends and family, computer manufacturer, or internet provider prior to calling a service company or individual. When they find that none of these options are viable they search for a service company to solve their problems. They are motivated by their frustrations and the key to winning a customer is communicating the best value.

Our members provide the value the client is searching for and are positioned to be the first to reach the client. We do this with (Example Ideas, free diagnostic service, same day service, and 24 hour support. Once we reach the client we are able to provide a true solution that is tailored to the needs of the client and then we have the option to secure that client for life by providing continued service and support through a dedicated technician much like the Medical Field. Quite simply, as a collective we offer more value to the customer than any other service individual or company in the world!

 

[JosephLeo]

A direct attack against Geek Squad is strongly not advised...in fact, I would even refer to them subliminally as "The Geeks", "Big Blue" "GS" or even "The Squad". Also, I'm not sure, but I think they have a trademark on the words "Agent" "Double Agent" etc- so reference to their job titles is also not advised. Instead I would refer to yourself as an alternative to "Brand X"

Other than that it is very inspiring and actually fun to read!

 

[Mushin]

Case Study.

I would be worried about using the brands and trademarks too but Since I am not implying we are Geek Squad there is no problem with using their names and trademarks in writing. Take for example car commercials where a Ford is compared to a Honda. They even use the makes and models which would be the same as using the job titles as stated here.

I should acknowledge their tradmark though.

I don't feel that this is any type of attack. This is an analysis of the industry, competition, and major industry players. It is also takes a critial look at independants and portrays them in a neutral manner.

Now the shocker on this.... I would love it if Geek Squad attempted to attack me on something like this. It would be a marketing coup for me. Imagine the big guys picking on me because of this. It would be a masterpiece of Buzz Marketing. Mark Hughes author of Buzmarketing would call this "Captuing the Media with one of the 5 most written about news stories... The David and Goliath Story."

 

[DonsTechnology]

As much as this 'story' hits home for me, it just doesn't seem right. there is too much wrong with essentially franchising these small companies. and yes, this is franchising them.
Bash me as much as you will, but this sound entirely like a scam. A ploy to make money, not a network of resources. Heck Technibble in its own it that very network of resources. You can ask any question here, computer business related, and are bound to receive a reply.

And believe me as much as you want to leave the geeksquad part in there, it will work against you, no matter how much free publicity you get from it, they will call you out for Libel.

Sorry, but that's just my 2 cents.

 

[basic]

Oh! Here it is....I'm so blind.

 

[GoldenClick]

@Mushin - More power to you on this. I think you really have something here and if you could build a labor force that offers remote support for your technicians then you would really have a selling point for people to join your brand.

 

[basic]

I just want to make sure it's known that franchises exist in the computer repair industry. This is not a new or untraveled path. cmonova is one of these franchisees under Computer Medics.

 

[Mushin]

Yes... Freanchinses do exists and... there are high upfront fees. Additionally a percentage of profits are also taken. The branding idea is similar to a franchise with a few differences. The first being lower costs and the second being no percentage of profits taken. As we have said before a good example of this is ReMax Real Estate. ReMax agents pay a licese fee to brand themself as a Remax Agent. Also anohter example is Nerds on Site.

Yes I am looking for ways to exapand my brand. But the real motivator is trying to change the industry. Essentailly there are two halfs right now. Geek Squad and all of us. There is room in the market for more National Brands. It is just a matter of time before somone comes along with the next bit brand.

Can it be done by a collective of independant agents sharing resources. Sure it can. It can also be done by a large corporation. I contend that I would rather be a part of it than not.

If NOS allowed for physical shops and the ability to hire employees I would probably go that route. The catch would be I don't particularly like company names with Nerds, Geeks etc.. because it looks like a copy cat.

Still what is in a name....

I am not sure why people are so defensive some think that posting an idea like this means it is some type of scam. Notice two things. 1.) I have never made an attempt to sell anything to a member and two I have not tried to recruit anyone, although I have had people offer assistance to get something like this up and running.

@DonsTechnology True this is a different approach... although nothing is up and running the numbers do work even on a small scale. Take some services that we could all use

1.) Phone Services
2.) Web Site
3.) Marketing Materials
4.) Remote Support

This is a very very basic example of pooling of resources but what is a feisable amount to pay for all of these services? What are we paying already?

What if the marketing materials were more effective?
How effective is your remote support if you have it?


say 10 companies paying shifting money that they spend on resources such as phone, web site and remote support to something like this? Maybe they spend $50, $100, $200 on their current features. What is the added value that they get by switching to this? If they are spending $100 already and they can get more for that same $100 dollas would this be smart business move. Probably.

These are all the details that are missing from the concept and why you may want to screme SCAM. But keep in mind this is a concept level discussion and not contract level. Truth is this is a Concept that I am working. It may work and it may not but I came up with some of the concepts because I don't want a franchise that limits me AND takes a percentage. I wanted a franchise that provides the infrastructure to help build my business to as large or small as I want. A platform to get from A to B. I could not find anything suitable for me so I figure if I can build something that would benefit me I am sure it would benefit others in the industry.

 

[basic]

The reason, in my opinion, why major brands like Geek Squad are successful is because there is a central controlling entity that manages all the branches. They unify the uniforms, service procedures, rates, etc. so that the customer would theoretically get the same type of service anywhere they go.

If you create this franchise how much control will you have over the franchisees? If it's almost no control and there is no standardization you can't build a brand because there is no consistency from one franchisee to another. If you enforce these standards then many of the guys here will be turned off to it and your franchise, essentially, becomes another Geek Squad. If you don't have any control and standards and all the franchises are autonomous there would be no real consistency between the different franchises, thus there is no brand. For there to be a strong brand the individual business owners must give up a certain amount of freedom to adhere to the brand's standards.

My feeling is that it has to be an all or nothing type thing. Either you are part of a large "brand" or you are an independent. I think trying to be something in between will most likely not be feasible. This, of course, is only my opinion.

 

[Mushin]

The reason, in my opinion, why major brands like Geek Squad are successful is because there is a central controlling entity that manages all the branches. They unify the uniforms, service procedures, rates, etc. so that the customer would theoretically get the same type of service anywhere they go.

If you create this franchise how much control will you have over the franchisees? If it's almost no control and there is no standardization you can't build a brand because there is no consistency from one franchisee to another. If you enforce these standards then many of the guys here will be turned off to it and your franchise, essentially, becomes another Geek Squad. If you don't have any control and standards and all the franchises are autonomous there would be no real consistency between the different franchises, thus there is no brand. For there to be a strong brand the individual business owners must give up a certain amount of freedom to adhere to the brand's standards.

My feeling is that it has to be an all or nothing type thing. Either you are part of a large "brand" or you are an independent. I think trying to be something in between will most likely not be feasible. This, of course, is only my opinion.

Very good points..... and you are correct the has to be abalance on what control the members are willing to part with (My personal opinion is as little as possible).

First and I think many would agree that there should be a standard as to scopes of work and processes. Second there should be pricing guidlines or services. An operating platform so to speak.

As the brand gets stronger so does the customer recognition. As this goes up so does the brands value to each member. Obviously the right to use the brand and resources could be revoked.

But... The number one thing that seperates this from the Geek Squad example is the ability to make money. A Geek Squad employee is only accountable to the degree that they want a paycheck. This is the case for any employee. At a high level the nature of an employer and employee relationship is as follow: Employees want to do the least amount of work for the most amount of money possible. Employers want to pay an employee the least amount of money possible for the most amount of work.

As a business owner there is an built in level of accountability. The better your perform the more you make. Since you rely on your clients directly for revenue you are inclined to provide the best service possible. This strengthens your buisness and as a member you help strengthen the brand.

What seperates all of us here from employed technicians is the desire to do it better, make more money, provide better service, provide better value etc.. This is a much more solid foundation to build a brand off of than building one off of a bunch of employees. In a sense you own the brand as much as you own your company.

There are hurdles and worries though. Not every company or individual would be a good fit. Image is very important and quality needs to back that image up at all times.

 

[Iconic]

Mushin,

I admire that you are continuing to "attempt" to convince the board members on this idea of a unified tech force under the same branding umbrella, however I think one thing needs to be said.

Most of the members on here are, as you said, either in the early stages of starting out or are in any number of stages in their business as it stands right now. For them, what you are propossing has no value because they have already put all they can into their business and they are vested in it. Not only financially but with their reputations, and ego's. I can admit I am one of them, although I have only been in business for 3 months I have a chip on my shoulders to prove my stability to those customers that I bought from another company, and also to my family and friends.

Now in your case, although it would be a huge boost to get a few already established independents to follow along with you, it is not in your best interest to attempt to convince those that are vested in their own business to take a leap into something that is just as unpredictable and uncertain as their own businesses were on startup. The only way to prove to them that this idea with 1. Succeed and 2. Is Stable, is to establish it and start a steady track record.

Unfortunatly for you the only way to do that is to have a few locations setup and a hammered out system in place. (BTW. That is what you get with franchise, the Branding and A PROVEN SYSTEM) The only way to get that is to find a few independently minded people to agree to take that first leap and "blaze the trail" so to speak.

I think you could possibly have a good idea, it all depends on the details, but the underlying concept has some potential. I agree with volatile that you would have to have some form of unity between all members services and abilities for it to stand any chance though. Unless you are aiming at simply having the brand signify the integrity, honesty and commitment of the independents under it. If that is the case you are better off focusing on implementing some form of "Gold Shield" Association that each business can attempt at marketing in their own areas like ACRBO does at the present.

However if you are aiming at creating a publicly known brand that is synonymous with good service and credibility, then each independent under its banner will have to offer the same core services that customer can depend on no matter which person then have come in to help them. For that reason there has to be some form of regulation that goes along with the brand.

I agree that what you are proposing is not a FRANCHISE for one simple reason. A franchise is a proven system that has no room for deviation or independent decision making. All decisions about the way the business is run, from the products offered to the insurance company used, is decided by one ruling party (typically the original franchiser and the stock holders). What you are proposing has some level of regulation in the form of a unified brand and possible unified services, however you are leaving everything else open. Such as location, additional services, individual business decisions etc, are decided by each independent in manner that they see as being more suited to their individual situations. For that reason I would not call this idea a Franchise but more of a LICENSE to operate under said brand identity.

So now that I bored everyone, I should get to the point. You will have a hard time "recruiting" current business owners to take the leap with you unless they 100% believe in the idea and potential. That being said, the chances are maybe 1 in 50 business owners might listen and possibly 1 out of 10 from those will consider it. The only way to get those numbers higher is to hammer out the details and create something more iron clad in concept and system. From there you may still have problems until there are a few branded independents established with proven success. Sadly the only way to get those branded independents is to either convince existing independents or more likely to succeed, recruit independent minded people that are presently employees and looking to make a leap. To them one leap is no different then another, and the licensed branding concept would be more appealing to them at the beginning then the struggle of going it alone.

I will stop rambling now, but I hope you see my point.

 

[basic]

What seperates all of us here from employed technicians is the desire to do it better, make more money, provide better service, provide better value etc.. This is a much more solid foundation to build a brand off of than building one off of a bunch of employees. In a sense you own the brand as much as you own your company.

I guess, but you are assuming that these businesses are one-man operations. If a franchisee has employees under them they would still experience the same thing you stated. The business owner already makes more money by improving their business. The only thing they will get out of this, is potentially a larger market if the brand becomes known by the public. Again, I see no real difference between this and another franchise company. And to my knowledge, you don't give up a percentage of your profits to the company you get you franchise from. You just pay a yearly (or whatever interval) franchise fee.

You can't equate what Geek Squad does with what you or other franchises intend to do. You also can't try to make comparisons between an employee of a store and a business owner. Geek Squad is one entity. Each precinct does not keep it's money to itself, the money they make belongs to Geek Squad. And any employee in any company, unless they get commission, do not get any more money by working harder.

 

[Mushin]

Good points

Iconic and Volitile

You both make very good points and yes the odds of converting well established local business are low. Please let me assure you that I am not trying to convince anyone to do anything.

What I am doing is trying to iron out all the kinks and bring to light anything new that has not been considered. I want to get real hard constructive feed back from those in the industry. Many of the points mentioned in many of these discussions hhad already been thought of but... a few have not.

Yes I seen the primary market of this being newcomers to the segment but not exclusively.

Yes Licensing is exactly how I invision this but with the added benefit of infrastructure support for those that are for the lack of a better word the "franchise".

Yes this type of system will have to be proven still if the foundation is services and pooling of resources that a business uses anyway then it is a win win for all parties.

I guess, but you are assuming that these businesses are one-man operations. If a franchisee has employees under them they would still experience the same thing you stated. The business owner already makes more money by improving their business. The only thing they will get out of this, is potentially a larger market if the brand becomes known by the public.

I have made no assumptions that these would be one man operations but indeed businesses with employees would be able to take advantage of a larger market. But is not the only thing... larger operations have higher costs. Especially when it comes to phone systems and employees.

So "assuming" something were established like a pool of remote support employees that could be additional labor on demand, well that could be a nice benefit and a way to increase volume. Other ideas being considered is a laptop repair depot service. Reparing a broken DC jack is not all that expensive most of the time. Still it is labor intensive and many don't want to mess with this type of repair. Well volume here is key with regard to labor investments so one shop may do the repairs for all other members. Both make a profit and all are happy.

A Recap...

This is indeed more of a licensing structure than a franchise.
This is a market where the business has to see a value. But then again are there really any markets that are not.
This is a system that has potential but will take effort and dedication.
There is the potential for immediate benefit for all involved either throuh reduce overhead costs or increase access to resources.

Thanks for the very thoughtfull feed back this go around.