Buy computer hard drive

As consolidation and competitive pricing initiatives among retailers continues, companies are increasingly on the lookout for new ways to differentiate in this crowded marketplace. The "good product at a good price" equation just isn't enough anymore.

One area that offers opportunity to differentiate is services. In October 2002, Best Buy bought a small residential computer services company in its home market that it hopes will do just that. The Geek Squad makes house calls in Minnesota's Twin Cities, Chicago, Los Angeles and San Francisco. Best Buy hopes to not only gain incremental revenue from the business, but get a boost in customer satisfaction as well.

"Computing has the highest number of consumer disappoints of any category," explained Sean Skelly, vp, strategic planning and business development for Best Buy. "And the consumer wants options."

Two years ago, Best Buy contracted with the Geek Squad, then an independent company in the Twin Cities, to help revamp the chain's in-store computer repair services. Previously, PCs were sent to regional repair facilities, a process that was time consuming and ultimately contributed to a high degree of consumer dissatisfaction. Approximately half of all repairs are now made in all Best Buy stores, but according to Skelly, "The one [service] component we didn't have in this space was in the home."

Enter the Geek Squad. Since its acquisition, Best Buy has been assessing, incorporating and fine-tuning the Minneapolis market before rolling out to the three additional existing markets. Ultimately, the goal is to have Geek Squad offered at all Best Buy stores nationwide.

Geek Squad employees populate Best Buy's in-store service centers but typically wear the traditional blue of Best Buy associates. But when out on a "Beetle roll" (thus called because of the Squad's signature fleet of Volkswagens), the team has a more distinctive "geek" look. Repair services are offered on two price tiers, one for in-store and a higher fee for a home visit.

It's a necessary solution in a changing marketplace. "The computer industry has not been built on customer satisfaction, but rather on what is the quickest and cheapest way to fix something: frequently asked questions posted on a Web site or a number to call," said Skelly. "That works well when you have a reasonably competent consumer." But with PCs predominant in the mainstream population, consumers are less able or willing to install a new hard drive or additional memory.

It's an issue that will only become more pressing, but one that offers opportunities beyond just the ability to differentiate through customer services. "We think this is going to be one of the things that helps not just our consumers hut also our business partners in terms of [fewer] returns, less service [needed from the manufacturer] and fewer products switched back and forth," said Mike Linton, evp and chief marketing officer, during a roundtable session hosted by DSN Retailing Today in January at the Consumer Electronics Show "This is an example of how we're working on solving problems better."

"[PC support] is the lowest-quality service of any of the products sold in a Best Buy store today," said Skelly. "We believe we can build on that significantly."