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Geek Squad Case Study
“As long as there’s innovation there is going to be new kinds of chaos,” explains Robert Stephens,
founder of the technology support company Geek Squad. The chaos Stephens is referring to is the
difficulty we have all experienced trying to keep up with the many changes in our environment,
particularly those related to computers, technology, software, communication, and entertainment.
Generally, consumers have found it difficult to install, operate, and use many of the electronic products
available today. “It takes time to read the manuals,” Stephens says. “I’m going to save you that time
because I stay home on Saturday nights and read them for you!” THE COMPANY The Geek Squad story
begins when Stephens, a native of Chicago, passed up an Art Institute scholarship to pursue a degree in
computer science. While Stephens was a computer science student he took a job fixing computers for a
research laboratory, and he also started consulting. He could repair televisions, computers, and a variety
of other items, although he decided to focus on computers. His experiences as a consultant led him to
realize that most people needed help with technology and that they saw value in a service whose
employees would show up at a specified time, be friendly, use understandable language, and solve the
problem. So, with just $200, Stephens formed Geek Squad in 1994. Geek Squad set out to provide timely
and effective help with all computing needs regardless of the make, model, or place of purchase. Geek
Squad employees were called “agents” and wore uniforms consisting of black pants or skirts, black
shoes, white shirts, black clip-on ties, a badge, and a black jacket with a Geek Squad logo to create a
“humble” attitude that was not threatening to customers. Agents drove black-and-white Volkswagen
Beetles, or Geekmobiles, with a logo on the door, and charged fixed prices for services, regardless of
how much time was required to provide the service. The “house call” services ranged from installing
networks, to debugging a computer, to setting up an entertainment system, and cost from $100 to
$300. “We’re like ‘Dragnet’; we show up at people’s homes and help,” Stephens says. “We’re also like
Ghostbusters and there’s a pseudogovernment feel to it like Men in Black” In 2002, Geek Squad was
purchased by leading consumer electronics retailer Best Buy for about $3 million. Best Buy had observed
very high return rates for most of its complex products. Shoppers would be excited about new products,
purchase them and take them home, get frustrated trying to make them actually work, and then return
them to the store demanding a refund. In fact, Best Buy research revealed that consumers were
beginning to see service as a critical element of the purchase. The partnership was an excellent match.
Best Buy consumers welcomed the help. Stephens became Geek Squad’s chief inspector and a Best Buy
vice president and began putting a Geek Squad “precinct” in every Best Buy store, creating some standalone Geek Squad Stores, and providing 24-hour telephone support. There are now more than 20,000
agents in the United States, Canada, the United Kingdom, and China, and return rates have declined by
25 to 35 percent. Geek Squad service plans are also being sold on eBay and in some Target stores. The
Geek Squad website proclaims that the company is “Serving the Public, Policing Technology and
Protecting the World.” THE CHANGING ENVIRONMENT Many changes in the environment occurred to
create the need for Geek Squad’s services. Future changes are also likely to change the way Geek Squad
operates. An environmental scan helps illustrate the changes. The most obvious changes may be related
to technology. Wireless broadband technology, high-definition televisions, products with Internet
interfaces, and a general trend toward computers, smartphones, entertainment systems, and even
appliances being interconnected are just a few examples of new products and applications for
consumers to learn about. There are also technology-related problems such as viruses, spyware, lost
data, and “crashed” or inoperable computers. New technologies have also created a demand for new
types of maintenance such as password management, operating system updates, disk cleanup, and
“defragging.” Page 89 Another environmental change that contributes to the popularity of Geek Squad
is the change in social factors such as demographics and culture. In the past many electronics
manufacturers and retailers focused primarily on men. Women, however, are becoming increasingly
interested in personal computing and home entertainment and, according to the Consumer Electronics
Association, are likely to outspend men in the near future. Best Buy’s consumer research indicates that
women expect personal service during the purchase as well as during the installation after the
purchase—exactly the service Geek Squad is designed to provide. Our culture is also embracing the
Geek Squad concept. For example, in the recently discontinued television series Chuck (2007–2012), one
of the characters worked for the “Nerd Herd” at “Buy More” and drove a car like a Geekmobile on
service calls! Competition, economics, and the regulatory environment have also had a big influence on
Geek Squad. As discount stores such as Walmart and PC makers such as Dell began to compete with
Best Buy, new services such as inhome installation were needed to create value for customers. Now, just
as change in competition created an opportunity for Geek Squad, it is also leading to another level of
competition as Staples has introduced EasyTech services and Office Depot has introduced Tech Depot
services. The economic situation for electronics continues to improve as prices decline and demand
increases. Consumers purchased 2 million 3D TVs in 2010, and sales of all consumer electronics
exceeded $180 billion. Finally, the regulatory environment continues to change with respect to the
electronic transfer of copyrighted materials such as music and movies and software. Geek Squad must
monitor the changes to ensure that its services comply with relevant laws. THE FUTURE FOR GEEK
SQUAD The combination of many positive environmental factors helps explain the extraordinary success
of Geek Squad. Today, it repairs more than 3,000 PCs a day and generates more than $2 billion in
revenue. Because Geek Squad services have a high profit margin they contribute to the overall
performance of Best Buy, and they help generate traffic in the store and create store loyalty. To
continue to grow, however, Geek Squad will need to continue to scan the environment and try new
approaches to creating customer value. One possible new approach is to create new partnerships. Geek
Squad and Ford, for example, have developed a partnership to help consumers install in-car
communication systems. In the future, Best Buy will offer 240-volt home charging stations for Ford’s
electric vehicle, the Focus. Geek Squad will offer electrical audits and residential installations for the car
owners. Geek Squad is also using new technology to improve. Agents now use a smartphone to access
updated schedules, log in their hours, and run diagnostics tests on clients’ equipment. Best Buy is also
testing a “Solutions Central” desk, similar to the Genius Bar concept in Apple stores, and staffing it with
Geek Squad agents. Finally, to attract the best possible employees, Geek Squad and Best Buy are trying a
“results-only work environment” that has no fixed schedules and no mandatory meetings. By
encouraging employees to make their own work-life decisions, the Geek Squad hopes to keep morale
and productivity high. Other changes and opportunities are certain to appear soon. However, despite
the success of the Geek Squad and the potential for additional growth, Robert Stephens is modest and
claims, “Geeks may inherit the Earth, but they have no desire to rule it!”
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