I would not want to be in the freelance tech support business

[I D Shukhov]

Best Buy's Geek Squad advertisement:

* In Store * Online (requires high-speed Internet)  * Over the Phone * Chat

Tech Support includes virus removal, full diagnostics, repair of software and operating system issues and more for up to 3 computing devices.

Includes 1 year of anti-virus/anti-spyware.  For details visit bestbuy.com/techsupport.

(Does not include data backup/recovery.)

$99.99 !  (special deal in today's Best Buy flier)

I didn't go to the site, but how on earth do they do this, profitably, at $33/PC ??

[The Gorn]

I didn't go to the site, but how on earth do they do this, profitably, at $33/PC ??

They simply limit everything.

Probably: no service on any equipment not originally sold by Best Buy (IE, if your router is not one that Best Buy supports, the rate is far higher); absolutely no legacy OS support; absolutely no support of software applications.

Sure they can do this, and it's easy to maintain the profits. You just publish a fake rate and you cherry pick what you will support under that plan.

Best Buy can easily get away with this. It's the small time independent support guy who gets a nervous breakdown trying to support every conceivable brand and age of computer, OS, cable modem, etc.

[I D Shukhov]

I didn't go to the site, but how on earth do they do this, profitably, at $33/PC ??

They simply limit everything.

Probably: no service on any equipment not originally sold by Best Buy (IE, if your router is not one that Best Buy supports, the rate is far higher); absolutely no legacy OS support; absolutely no support of software applications.

Sure they can do this, and it's easy to maintain the profits. You just publish a fake rate and you cherry pick what you will support under that plan.

Best Buy can easily get away with this. It's the small time independent support guy who gets a nervous breakdown trying to support every conceivable brand and age of computer, OS, cable modem, etc.

I guess they'd have to severely limit what they do.  Maybe they spell this out on their site.  One danger they run is pissing off the customer who may hold a grudge and refuse to buy anything at the store in the future.

[TRexx]

BB assumes that most people will never place a service call. If their PC does break, they probably forgot they bought the contract or lost it.

And when people do call, the standard fix is to make a copy of My Documents/Pictures/Videos/Music folder(s), reformat the hard drive and reinstall everything that is covered by the contract.

[Richardk]

It's all of the above.

• Hope you forget about it.
• The $99 price is only for BB stuff. It's $200 for ANY 3 items, if not purchased at BB.
• "How bad can it be" if they can log in remotely?

And I really like this one after listing 9 services:

If Geek Squad is unable to successfully complete one of the services set forth above in store or by logging in remotely to the Customer's computer, Customer may purchase a Geek Squad service to address the issue at a 15% discount from the regular service price.

So if they can't fix it as a covered service, they'll gladly charge you more to attempt a repair, less a 15% discount?

And yes, backup is the customer's responsibility. With multimedia today, who has the time and space to backup PC's at rock-bottom prices?

[Origisaurus]

Like a warranty, a service plan is an insurance scheme.   People get protection against unlikely but potentially costly future events, at a reasonable cost.  And the coverage is limited.  Just like your car warranty or your home-owner’s insurance.


Ideally, the insurer makes no money on premiums vs. payout, but earns money by investing the premiums received.

[Carrie Cobol]

Without revealing too much, it's possible that my company is the "host" for this, meaning that of course the service is outsourced and BB covers very little of the actual cost.  They outsource to several companies, one of which is mine, so I can't tell for sure if this is us.  But you guys are right that they limit it to equipment bought at BB unless you pay extra to warrant other stuff.  And at least with regards to us, it's not scammy, we actually do respond to service calls and don't try to find ways to refuse it like many insurance companies do.  I'm not exactly sure how we do that profitably, other than we bring in more in contract sales than we spend working on claims.  But in addition to call centers located in about 6 or 7 places around the country (OUR country, one of the reasons I like this company!), we also have a work from home program for many call center operators.  The work at home seems to be sort of a pilot program, but from all appearances, it's successful.  And of course that keeps costs way down!

[Richardk]

So not only is the "coverage" limited but I'm guessing that the amount of time spent on the issue is as well?

As the Gorn stated, "we" try to fix everything but if we followed a plan like BB's maybe you can turn a profit?

The only way to make any money, is turn off your brain and have a simple checklist. While this doesn't "feel" right, it's a measurable and repeatable business model.

[The Gorn]

So not only is the "coverage" limited but I'm guessing that the amount of time spent on the issue is as well?

As the Gorn stated, "we" try to fix everything but if we followed a plan like BB's maybe you can turn a profit?

This has been discussed here about a hundred times.

This is a situation where the big business gets by with an inferior level of service - only servicing fairly low probability events involving extremely recent equipment, and covering the easiest possible situations - just by being big.

Best Buy/Geek Squad can cherry pick the work they will perform. Small operator can't. Why? The big company is famous and consumers will accept being jerked around by a powerful big company. It's the small fry that the consumer will push around and expect miracles out of.

IE: Best Buy will quote some outrageous price, say a few hundred dollars with no absolute assurances, for pulling data out of an XP computer and restoring it from viruses. The consumer will object and will remember the flyer they got from the local PC guy for $25/hr.

They will call him and sit on him to charge them only $100 or so to fix the computer and treat him like a criminal if he says that anything was more than was expected.

When I did this kind of work it really wore on me to have prospect after prospect expect me to eat a plate of shit when I would quote them an estimate.

I remember one woman who had a crashed PC and she wanted data from it pulled off and copied to a new PC they were going to buy. I quoted her $200 flat (an insane price) for driving to their 20+ mile distant rural location, picking up the PC, bringing to to my shop, copying all data to DVDs, returning the PC and DVDs, and even restoring the data to the same folders on the new PC. She acted like I was totally ripping her off.

A small operator will be the one expected to absorb the costs of migrating scattered customer data from one PC system to another for a flat fee, or making a shitty Windows 98 or Windows 2000 PC that should be tossed in the landfill work.

A big business can stay in business by doing anything it wants. A small business has to cater intensively to every conceivable edge case, at extremely tiny profit margins.

I don't doubt anything Carrie Cobol is saying but it comes down to a highly optimized service business model which means you only take on easy work from clients who have a lot of money to spend. Small service providers often can't capture those clients because large retailers have already.

[Richardk]

I think you summed it up.

Big business can cherry pick their work, do and charge what they want and customers accept it.

Small providers, in general can't do that. Also there's the image thing where clients with money assume a big name means better service and more know-how. Those that can't or won't spend the money look to the small provider for a "deal".

I'll add that I've seen one small provider actually doing very well, but he's in a large market (able to cherry pick) and his number one solution to most problems is reformat and reinstall. I found it hard to believe that his clients were happy but apparently he's filling a need.
 

[David Randolph]

A better analysis of the whole Best Buy situation is found at
http://www.forbes.com/sites/larrydownes/2012/01/02/why-best-buy-is-going-out-of-business-gradually/

including the comments.

[Carrie Cobol]

Thanks David, that's a great article.  I haven't read the comments yet, but have a couple of my own to add (here).

A few months ago I was working with our BB staff (employed by us but work primarily on the bb account) to design some management reports about sales and warranties.  Most of the reports were column charts.  In addition to the data columns, they also had a trend line.  The height of the columns were explained by the left-hand axis as is normal, and each column was labelled along the bottom axis.  The points on the trend line was described by a right hand axis.  Complex.  But wait...  the left and right axes had completely different scales.  I pointed this out to the manager and he said he knew it was wrong and deceptive but that's the way BB liked their charts.  He said they preferred to pack as much data into one chart as possible.  Apparently they have no clue that by doing that they completely obliterate the meaning of the data.  So yeah, if that's the way the place is managed, I'm not surprised they have no clue if they're profitable or not.

As to the comment in the article about computer systems....  one word for that:  out sourced.  Clarification:  to as many different companies as is apparently possible.  We have to swap files with an off shore company on a daily basis; and by swap I mean in both directions at different times, and I wouldn't be surprised if there are contracts that circle the process flow indefinitely so that we never account for them.  At least they're consistent:  everything needs to be as complicated and obtuse as possible.

[TRexx]

My nephew worked for BB for a few years when he was in college (it was close to school and he could arrange his work schedule around his classes).  Based on the stories he told, this article is spot on.

One of the major problems in his store was "shrinkage".  No matter how many yellow shirted "loss prevention" folks they had, merchandise still managed to make it out the door without being paid for. One of the smarter Geek Squad guys hooked up a web cam over the back door.  Within a week they had nice photos of an employee driving up to the door at 2AM. disabling the alarm system and then loading several boxes into his van.   When they presented this evidence to the store manager, he did absolutely nothing.  The employee in question was one of their top salesman and the manager was afraid of missing his sales quota. 

Management was always harping about increasing sales, especially the high profit service contracts and accessories, but there was absolutely no incentive for the staff to sell more.  They had all kinds of sales contests, but when the top prize is a $12 DVD, why should anyone care?

 

[TechTalk]

...The employee in question was one of their top salesman and the manager was afraid of missing his sales quota.

Either the store manager was in on the scam or he thought this sales person was being underpaid and decided to let the thefts slide as a form of compensation.

Here is my question.  Assuming they found out about this, why didn't the rest of the store employees simply go hog wild and pillage the store?

[TRexx]

Here is my question.  Assuming they found out about this, why didn't the rest of the store employees simply go hog wild and pillage the store?

Because they weren't selling enough to be on the manager's sacred cow list.

It's the same reason my nephew could decide to take off at noon to go snowboarding, or not bother to come in if he had to study for an exam.  He sold so much stuff when he was there that the manager was willing to let him slide.  Eventually he (nephew) realized how little he was getting paid so he quit and got another sales job where he gets commission.