Business

Best Buy Hits 1M Subscribers for $199 Total Tech Support Program

Best Buy passes 1 million members for annual $199 Total Tech Support service in less than one year. BBY stock price skyrockets 17%.

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5 Comments
Posted by Joseph Kolchinsky on February 28, 2019

The future is now!  The vast majority of this industry’s clients are willing to pay monthly for high-quality, reliable, 24/7 remote support.

Keywords: high quality and reliable.

We are seeing the same success with all our partners.  We’ve processed over $1mm in annual recurring revenue for our partners so far.

Posted by iKnowTech on March 1, 2019

$199/yr. for UNLIMITED Geek Squad Tech Support.  What they don’t state is how much are people actually using this service?  If the user is requesting more than 1 onsite service visit a year, or more than 3 hours of phone/remote support in a year, then this is a loss leader at best.    In my experience the people that look to buy these types of UNLIMITED plans are also the most needy, and they will milk it for everything its worth.  They see this as a great value, because they are probably used to paying way more than that in annual costs to a local tech provider for help with their computers and other technology needs. 

Email problem with my AOL account, call the Geek Squad.  Need to reset the Clock on the Oven, I bet the Geek Squad can help, why look up the instructions, I have a subscription for that. 

If you’re as big as the Geek Squad, you can afford to take on that sort of risk, and probably get enough volume to presumably make it profitable in the end.

My average customer spends way more than $199/yr with me on Tech related support, so would it be in my best interest to just slash my pricing and give them an all you can eat and take advantage of me plan for less than what I would make on a single 2 hour onsite trip?  I don’t think so. 

I’m all for recurring revenue, in places where it doesn’t require my time to make it!

Posted by Joseph Kolchinsky on March 1, 2019

@iKnowTech - the TotalTech membership is for “unlimited remote, online, and in-store support”.  They are banking on “breakage”, which means the vast majority of people will not use the service while a few use it heavily.  At $17/month it’s an easy transaction to forget about (and that’s what Best Buy is hoping for).

However, listening to the earnings call the CEO went into detail on how they will be working to create more value so that people who don’t call often still renew the membership.

Best Buy is innovating…and they’re moving ahead as a result.  We as an industry could benefit from pausing just long enough to understand their perspective, learn from their progress, and internalize it productively for our businesses.

Posted by iKnowTech on March 1, 2019

That’s an easier pill to swallow if it doesn’t include any onsite services, and I’m sure at the volume that Best Buy is doing they probably have a good balance of heavy users vs people that buy the service when they need it the first time, then sort of forget about it and rarely use it.  I’m sure they also pay bottom dollar for their labor force and outsource a lot of tech support overseas. 

Maybe it works for a big company like Best Buy, but really makes no sense for a smaller local businesses.  I wouldn’t want to offer a service like this to an existing customer that averages more than a couple of billable hours of my time in a year.  I definitely can’t see why I would want to advertise a program like this for potential new clients, as it would just attract the type of clients I have no interest in, people looking for bottom dollar cost service. 

At the end of the day, how Best Buy operates I’m sure has very little relevance on how a majority of the CE Pro subscribers operate.  Probably most CE Pro subscribers see these these sort of programs from major cooperation’s as threat to to their businesses, and frankly rightly so.

Its one thing to make recurring revenue on selling monitoring, or cloud services, its quite another to sell low cost subscriptions to your skilled labor force.

Posted by Joseph Kolchinsky on March 1, 2019

@iKnowTech - it sounds like you have a far better service experience than what Best Buy delivers - so why try to compete by charging the same amount?  What if I told you your clients would pay $100/month or more for unlimited, 24/7, high-quality tech support?  And then they would pay hourly for all your in-home support?

Here at OneVision we partner with integrators to manage their service departments and drive profitability through high-quality service.  We are seeing an average membership fee of $100/month across the country for high-quality, instant access to 24/7 remote tech support.  The client then pays per hour for any on-site support.  We’ve processed over $1 million in recurring revenue for our partners.

This industry has immense potential - to capitalize on it we have to see the value of our role, learn to do it sustainably, and then charge appropriately.  It’s exciting to watch this unfold for the integrators who are innovating in service.

5 Comments
Posted by Joseph Kolchinsky on March 1, 2019

@iKnowTech - it sounds like you have a far better service experience than what Best Buy delivers - so why try to compete by charging the same amount?  What if I told you your clients would pay $100/month or more for unlimited, 24/7, high-quality tech support?  And then they would pay hourly for all your in-home support?

Here at OneVision we partner with integrators to manage their service departments and drive profitability through high-quality service.  We are seeing an average membership fee of $100/month across the country for high-quality, instant access to 24/7 remote tech support.  The client then pays per hour for any on-site support.  We’ve processed over $1 million in recurring revenue for our partners.

This industry has immense potential - to capitalize on it we have to see the value of our role, learn to do it sustainably, and then charge appropriately.  It’s exciting to watch this unfold for the integrators who are innovating in service.

Posted by iKnowTech on March 1, 2019

That’s an easier pill to swallow if it doesn’t include any onsite services, and I’m sure at the volume that Best Buy is doing they probably have a good balance of heavy users vs people that buy the service when they need it the first time, then sort of forget about it and rarely use it.  I’m sure they also pay bottom dollar for their labor force and outsource a lot of tech support overseas. 

Maybe it works for a big company like Best Buy, but really makes no sense for a smaller local businesses.  I wouldn’t want to offer a service like this to an existing customer that averages more than a couple of billable hours of my time in a year.  I definitely can’t see why I would want to advertise a program like this for potential new clients, as it would just attract the type of clients I have no interest in, people looking for bottom dollar cost service. 

At the end of the day, how Best Buy operates I’m sure has very little relevance on how a majority of the CE Pro subscribers operate.  Probably most CE Pro subscribers see these these sort of programs from major cooperation’s as threat to to their businesses, and frankly rightly so.

Its one thing to make recurring revenue on selling monitoring, or cloud services, its quite another to sell low cost subscriptions to your skilled labor force.

Posted by Joseph Kolchinsky on March 1, 2019

@iKnowTech - the TotalTech membership is for “unlimited remote, online, and in-store support”.  They are banking on “breakage”, which means the vast majority of people will not use the service while a few use it heavily.  At $17/month it’s an easy transaction to forget about (and that’s what Best Buy is hoping for).

However, listening to the earnings call the CEO went into detail on how they will be working to create more value so that people who don’t call often still renew the membership.

Best Buy is innovating…and they’re moving ahead as a result.  We as an industry could benefit from pausing just long enough to understand their perspective, learn from their progress, and internalize it productively for our businesses.

Posted by iKnowTech on March 1, 2019

$199/yr. for UNLIMITED Geek Squad Tech Support.  What they don’t state is how much are people actually using this service?  If the user is requesting more than 1 onsite service visit a year, or more than 3 hours of phone/remote support in a year, then this is a loss leader at best.    In my experience the people that look to buy these types of UNLIMITED plans are also the most needy, and they will milk it for everything its worth.  They see this as a great value, because they are probably used to paying way more than that in annual costs to a local tech provider for help with their computers and other technology needs. 

Email problem with my AOL account, call the Geek Squad.  Need to reset the Clock on the Oven, I bet the Geek Squad can help, why look up the instructions, I have a subscription for that. 

If you’re as big as the Geek Squad, you can afford to take on that sort of risk, and probably get enough volume to presumably make it profitable in the end.

My average customer spends way more than $199/yr with me on Tech related support, so would it be in my best interest to just slash my pricing and give them an all you can eat and take advantage of me plan for less than what I would make on a single 2 hour onsite trip?  I don’t think so. 

I’m all for recurring revenue, in places where it doesn’t require my time to make it!

Posted by Joseph Kolchinsky on February 28, 2019

The future is now!  The vast majority of this industry’s clients are willing to pay monthly for high-quality, reliable, 24/7 remote support.

Keywords: high quality and reliable.

We are seeing the same success with all our partners.  We’ve processed over $1mm in annual recurring revenue for our partners so far.