Case Study: Calling All Geeks

After all, he'd been officially open less than 24 hours and didn't have an ad for his new IT services business in the local Yellow Pages. But the would-be customer had called information and knew exactly which name to ask for: Geeks On Call. His friend down in Virginia swore by their expertise and quick response. If there was a "Geek" in the area, he'd be right for the job, the friend advised.

And so it began. Just three months later, Kaufman, the New Jersey territory developer for the fast-growing Geeks On Call franchise, marvels at how quickly his operation has expanded to cover three service areas. "They train the owners to understand that nothing may happen at first," he says. "That's not the way it happened with us. There hasn't been a letup."

Call it lucky timing, but there's something undeniably appealing about Geeks On Call. And it's not just for homeowners and small businesses desperate for help with recalcitrant computers and networks, but also for entrepreneurial sorts who have longed to start their own IT businesses but were leery of going it alone. Local Geeks On Call owners say the franchise model gives them valuable, centralized resources in marketing and advertising, service dispatch, and management and technical training, yet leaves them free to determine hiring, pricing and services for their region. And then there's the brand recognition: All technicians are instantly recognizable when they're out and about. They're required to drive navy or black Chrysler PT Cruisers emblazoned with the organization's bold logo.

"Franchising seeks to find exactly the right balance between those things that can best be done nationally on a central basis and things that are best done on a local basis," says Houghton Hutcheson, owner of five Geeks On Call franchises in the Houston area.

At press time, Hutcheson was starting up two more locations, which were slated to open by last month. A former executive recruiter, Hutcheson was attracted to the notion that he'd be able to leverage his business model off the efforts of others, within the corporate organization and the network of Geeks On Call owners. "Part of the thing that definitely attracted me to the company was they had really thought out this customer-service model which, in my experience, has been ignored," says Kaufman, who operates out of Springfield, N.J.

Because he once was a corporate CIO, Kaufman likes to think of his business from the customer's view. "With my guys, I always use a plumbing analogy because that is something I know nothing about," he says. "With plumbers, I feel very much that I'm at their mercy. They can tell me this and that about the valves, and I'm just out of it. I know I need it. I know I need the help. I've got a leak. And then they present me with a bill, and I'm helpless. If it's $800, I don't know what to do. I can't argue it intelligently. And I think that's the way most people are with technology, especially nontechnical people."

At last count, Geeks On Call had just north of 310 franchises covering 20 states, with its newest territories in Boston, southern New Hampshire and New Jersey. The company is on track to add 175 franchises this year alone, says Walter Ewell, president of Geeks On Call, which has its corporate headquarters and dispatch center in Norfolk, Va.

For IT services businesses, Geeks On Call's national advertising and call dispatch capabilities are a big draw. Residential customers who dial Geeks On Call based on seeing an ad are routed to the dispatch center, which then dispatches the franchisee that can respond most quickly to their problem. Franchise territories are broken up according to a demographic scheme that ensures equal distribution of opportunity among small-business clients. That's where exclusivity creeps in: Franchisees have dibs on service-contract leads or prospects in their territory that arise from their own business-to-business marketing.

Owners can expect to make an initial investment of about $55,000 per franchise, depending on how many locations they open at once (corporate prefers they limit it to three), Ewell says. That includes an initial fee of $25,000 for the national organization, a $15,000 advertising fee and investment in startup inventory.

Owners also can expect to pay for computers and cell phones for technicians and for the PT Cruiser. After the 90-day startup period, owners pay an 11 percent royalty on their business plus $250 per week for the advertising fund. Then there's the cost of personnel. Geeks On Call must be geeky, but their ability to interact with customers is just as important. Field technicians need a minimum A+ or Network+ certification from the Computing Technology Industry Association, and they must pass what Ewell calls the "Geek Test." This consists of an oral exam made up of questions gleaned from actual calls logged by the call center.

Technicians also must attend a three-day orientation class in Virginia, and owners take four days of training.

"A lot of people who look at a business like this think it only matters if they can fix computers," Hutcheson says. "It's equally or more important that they have excellent people skills and selling skills. They are the face of our business out in the marketplace."

One of Hutcheson's most successful technicians is the former assistant manager for a brake-check franchise. "What I loved about him was the fact that he was taking a $99 brake job and turning into a $300 ticket, and the customer was still happy," he says.

Kaufman also screens job candidates carefully, looking for communication skills and technical curiosity. One of his top employees is a former customer-service representative who worked with a large telecommunications company in the retention department, where irate customers are routed as a matter of last resort. Kaufman and other franchisees said they offer compensation packages that include a base salary plus pay for performance incentives.

Geeks On Call was the brainchild of two businessmen who founded a local computer tech support organization serving the Virginia Beach area and tapped local talent who had been working in large call centers. When their business boomed, they realized they needed help and hired Ewell, a franchising expert, as a consultant. The premise was simple: Help increasingly frustrated PC owners get a handle on their technology.

"Lots of people are buying their systems direct," Ewell says. "The customer at the end of the day is dealing with someone at a great distance who may promise a lot of support but doesn't provide it very adequately."

What the PC owner needs is someone on-site to hold their hand—as quickly as possible, Ewell says. "One of the cornerstones is the idea of the local owner. You're always better off with a delivery system where the local owner is involved."

To help local owners rise above word-of-mouth, Geeks On Call provides formidable marketing support, including drive-time radio spots, local TV commercials and local print ads. And of course, there are the PT Cruisers, which act as "rolling billboards" for the franchise. As much as 15 percent of initial inquiries into the call center are from people who have seen Geeks On Call cars on the road. The cars also have a sizable hatch that's sheltered from sunlight and can hold a cargo of memory, network interface cards, wireless routers, modems, hard drives, software and other repair components.

Mark Sakurada, owner of two franchises near Hartford, Conn., says one of his biggest initial challenges with Geeks On Call was figuring out which technology the cars need to carry. "That's been a nightmare because I'm not much of an administrator. But there are systems coming into place to help manage it better. They're handling it pretty well," he says.

Corporate leaves such decisions to the franchisees, according to Ewell. "At the end of the day, it's their business. We just give them the tools they need," he says.

"They take all of the pressure off us," says Warren Brown, a former high-school teacher and computer reseller who owns Geeks On Call franchises in Leesburg and Ashburn, Va. He has been affiliated with Geeks On Call since October 2001 and was the first franchisee outside the company's home base.

Brown, who describes himself as a technology guy, not a businessman, also sought Geeks On Call's expertise on pricing. The organization sets price guidelines on service calls based on the region, though independent owners can set prices themselves. An initial diagnostics call, for example, could run $99. Cleanup jobs usually run one to two hours, and some franchisees say they charge between $149 and $165 for one hour and $265 to $275 for two hours.

Owners are encouraged to sell three types of service contracts: proactive preventive maintenance agreements, which can run as little as $200 for one computer and make customers eligible for discounts; incident-based coverage that spans a specific time period; and managed services, in which the Geeks act as IT advisers—usually in business settings—for about $3,000 annually.

What kind of calls are the Geeks getting? Spyware and other "bad stuff" tied to poor Internet surfing habits are common problems. Other issues include finicky broadband connections and conflicts between wireless routers and network interface cards. Franchisees say they're free to choose the technical approach they use to solve a problem, and although they're not really in the business of reselling equipment, they won't hesitate to recommend and sell a product if it's right for the customer. An increasing number of calls are for new system installations, which bodes well for future maintenance calls.

No matter what degree of contact a Geeks On Call owner has with customers, the corporate organization asks clients to fill out a customer-satisfaction survey so it can hold franchisees accountable to certain service levels. Franchisees also are expected to file weekly financial reports and send a copy of every invoice to headquarters.

For the owners, that seems little to ask in exchange for being affiliated with such a powerful brand. "Companies sometimes spend millions and sometimes hundreds of millions [of dollars] trying to build a brand," Kaufman says. "Everyone kind of knows what a geek is. It does get attention. It evokes a smile, and that's what we're trying to go for."