Corporate_Strategy_Deep_Diagnostics_3 by Sutherland Global Services

Case Study and Sample Slides US: Technical Support Services Market

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Technical Support Market in the US Client • The client is a leading B2B provider of Pay-for-Support (PFS) services for out-of-scope customer calls with regards to digital support

Project Scope • The client hired SGS to assess the market attractiveness of key Pay-for-Support (PFS) services as the US, the UK and Australia w.r.t. – Market size and potential of PFS market – Supply side analysis including competitive landscape and benchmarking competitor strategies, marketing and advertising impact, operational processes and product price benchmarking – Recommendations for client based on insights gathered

Sutherland’s Solution • Analyzed the potential of the PFS market for consumers and Small and Medium Businesses (SMB) alongside capturing key trends , customer pain points, evaluation criteria for PFS services , impact of ‘free’ start-up services during the purchase of a new computer etc. • In-depth analysis of leading B2B players’ revenues, growth, profitability, target customer segment, strategies w.r.t. PR, advertising, branding, HR, innovation, M&As , expansion plans and pricing for various products • Conducted ‘dummy’ calls to Client and competitors to evaluate each one’s processes i.e. time taken to pick the call, greetings/ welcome message, service options provided, technician’s expertise and courtesy, time taken to resolve the issue, freebies given if any, up-sell attempts and overall value-for-money feel • Analyzed ‘SEO effectiveness’ for Client and competitors by testing link rankings for key search words as well as website benchmarking

• Benefits to the Client • Insights gathered based on competitive study highlighted the huge focus on Search Engine Optimization, PR and branding by all competitors • Operational insights such as linking 25% of salaries to C-sat scores, ensuring that original call executive does not pass the call to another executive though he may invite another expert, branding of support executives as funky, publishing top 5 consumer complaints, fraud alerts, thematic campaigns, sending across the chat transcript were some of the high-level take-aways © 2012 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

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All leading players except for Radialpoint have registered a CAGR (2007-10) in excess of 130% iYogi

Support.com

PlumChoice

Radialpoint

Founded in

• 2007

• 1997

• 2001

• 1997

Revenue, 2010 & CAGR

• $70 mn

• $44 mn

• $42 mn

• $40 mn

• ~130% (2006-10)

• ~155% (2007-10)

• 897% (2007-09)

• 30% (2007-10)

Total Subscribers

• 400,000+

• 200,000+

• 150,000+

• NA

Geography served

• US, Canada, UK, Australia

• US, Canada, UK

• US, Germany (thru Tific)

• US, Canada, UK

Target Customer Segment

• 45+, well-to-do, "later users," i.e. older people having problems accessing the PC and internet

• 30+, middle income, "tech pragmatic," i.e. business pros who are time sensitive

• Businesses selling technology products and services

• Digital Home Owners, affluent people with access to the most complex technology

Tech Employees

• 7,000 ‘yogis’ in India & UK

• 700+ agents US & India; work from home, US- 700+

• 1,000+ technical experts, US

• 500+ employees in Canada/US

Business and Revenue Model

• B2C ;Gets into marketing alliances but no whitelabeling

• B2B2C and B2B (SMBs)

• No white-labeling

• White labeling for select clients

• B2C, B2B (SMBs), B2B2C (only via ISPs)

• No revenue sharing Tie-ups / Clients

• Tie-ups: WalMart.com*(2008-10), Amazon.com & Buy.com (2009 onwards) • Free set-up offered, 30 days warranty for free services rendered post which they promote their services

• Revenue sharing for B2C

• White labeling, revenue sharing; B2C via HiWired

• Clients:

• Symantec

• McAfee(2008 onwards),

• Office Depot & Staples (‘09 onwards)

• OfficeMax (2008-09)

• AT&T, Bell Canada, Cox Communications, BT, Comcast, Sky ,Verizon

• Dell

• Office Max (‘09, shifted from PlumChoice)

• AT&T (‘09 onwards)

• Comcast(‘10 onwards)

• RadioShack through AT&T Connect (’09 onwards)

• Virgin Media (’11 onwards)

Source: SGS Research

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Each player has specific marketing strategy like Google ad-words, active press coverage- IYogi; visibility in tech conferences & research publications- PlumChoice

iYogi

Support.com

PlumChoice

Radialpoint

PR & Marketing

• Launches thematic campaigns • Promote subscription plans by • PlumChoice CEO & Founder Ted • Media presence is relatively with free diagnostic service for offering “free trial” versions Werth named Ernst & Young low the themed issue e.g. ‘Kill through channel partners Entrepreneur of the Year® 2011 • Radial Point finds its presence Slow’ against virus, • Shifting the focus from selling • Given that the co. registered in some digital and electronics • Specific products/ offering for services only to increasing 897% revenue CAGR (2008-10), journals (e.g. CNW, PRWeb, target segments- Hispanics product (PFS related PlumChoice has been named to Business Wire), with mentions software) sales Inc. 500 List Of America's about key happenings like top • Bi-monthly alerts on fraud, Fastest Growing Private management hires, etc. spam etc. ex: pirated s/w Companies in August 2010 • Promotes managed internet • Monthly release on ‘top 5 • Named to CRN's “Most security as its strengths, gives consumer complaints’ innovative MSP list 2010” away Radial Point Security • Active press coverage across (RPS) to all consumers of publications like CNN, FT, Tech clients Crunch, PC World, WP

Branding

• Strong branding of its proud Indian heritage and knowledgeable agents

• It markets itself as a Microsoft • Partners with Park Associate, a certified partner leading research provider; ‘gold’ level sponsor for their events

• Rebranding as Radialpoint (since 2009) using reputed agencies such as Idiom (other clients of Idiom: Intel, HP, Nestle, etc.)

Advertising

• Spent $4 mn (FY09) & $10 mn (FY10) for paid search advertising on Google

• Recent increase in Google • Regularly participates as an key-word search presence exhibitor in Consumer indicates investment in SEO or Electronics Show held in Las Google AdWords Vegas by the Consumer Electronics Association. This show is attended by about 12,000 retail buying organizations

• Comes up with print ads highlighting being awarded as the ‘Best Employer’

• Tracks 300,000 keywords on Google and bids for the most relevant ones • Smart SEO: Individual webpages dedicated to every service & brand

• Always promotes the fact that it has been amongst the top 15 Canadian employers for two consecutive years

Source: SGS Research

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Though iYogi is relatively new to the market, it has a well defined plan of action – launch an IPO, entry into 12 new markets and launch TV ads in the US by FY12

iYogi Future Plans

•

Plans to enter 12 new countries, like China, Mexico, India , Egypt etc.

•

Has begun pilot in Europe for French, German, Spanish and Italian languages; plans to add Mandarin, Japanese and Arabic language support

•

Plans to open a center in Latin America with multi-language support

•

Plans to come up with an IPO by end of FY12

•

Plans to advertise on American TV networks

•

Plans to tie up with local partners for customers to get their PCs repaired on-site

•

Special plans for Hispanic community in the US in the pipeline

•

Plans to tie-up with vendors of mobiles and other devices to bundle its service

•

iYogi planning to start ‘iYogi Technical Certification’ and ‘iYogi SEO certification to train 250,00 people with an aim of recruiting 25,000 in 3 years (2011-2013)

Support.com •

Plan to focus on products (that support digital repair) rather then services as products give them margin of 89% vs. 17% margin for services (share of services in the total revenue 2010: 73%)

•

Special focus on marketing Samsoft products

•

Extend more comprehensive support for products such as iPhone, Blackberry and Android by leveraging on its Mobile Data Access and Back-up Services

•

The company expects to improve its gross margins by enhancing the share of software products

PlumChoice

Radialpoint

•

Intends to further improve and expand its existing SAFElink platform and increase the sales and marketing efforts for the same

•

Intends to bring about major brand and feel revamp (renamed the company from Zero-Knowledge to Radialpoint in 2009)

•

For this purpose, it has raised $25.6 mn in debt and equity funding (May ‘11)

•

Intends to shed the ‘onlyinternet-security’ image and focus on fully ‘managed digital service delivery’ image

Source: SGS Research

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Searches based on key-words like ‘Tech support’, ‘PC repair’ etc. indicate that iYogi followed by Geek Squad invest in SEO Search words used

Computer Repair

Tech Support

Computer Help

PC Repair

Computer Services

Period of search

July

August

July

August

July

August

July

August

July

August

iYogi

Geek Squad

Support.com

PlumChoice

Radialpoint

Note: ‘X’ indicates that the company did not feature in the top-30 search results or the first three pages of Google search results

Key Observations •

There has been a slight change in the SEO application patterns of the websites of some key players, especially Support.com across the last two months

•

Support.com features above the other websites like iYogi.com and GeekSquad.com in most of the tested key words. The remarkable aspect about this is that in July, 2010, Support.com did not feature in any of the tested key words. It has pushed companies like Geek Squad and iYogi down a few notches

Source: SGS Research, Company websites

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Geek Squad vs. iYogi vs. Support.com – Geek Squad scores high on account of high level of autonomy to agents to offer basic services for free

Two services sought: 1.

Geek Squad

iYogi

Using remote access software, agent direct went to Device Manager and activated the webcam

• Agent missed the webcam option in Device Manager

•

Free

•

$139

•

$49.99

•

25 minutes

•

115 minutes

•

15 minutes

Stream music between Windows 7 notebooks

•

Agent guided the customer through the steps to create a Home Group

•

Agent guided the customer through the steps to create a Home Group

•

Agent guided the customer through the steps to create a Home Group

Cost & time taken

•

Free

•

Included in above subscription

•

~$32.99

•

9 minutes

•

10 minutes

•

10 minutes

•

NIL

•

Both agents refused to give their names even after being asked

•

NIL

•

Indian accents were difficult to understand

•

Annual subscription for unlimited queries

•

Agent proactively warned that someone may have purposely deactivated the webcam

Inability to video chat on Skype

Cost & time taken

Key Negatives

Key Positives

Overall Rating

•

Saved $29.99 charged for a hardware repair and $49.99 charged for a software install A

Support.com • Agent correctly reactivated the webcam via Device Manager

• Solved the problem by going to system restore and activating previous day’s settings

B+

Note: This study was conducted in February 2010; prices of plans may have changed as of now; as reviewed by Laptopmag.com in February 2010 Source: Laptopmag.com

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IYogi’s process-oriented approach resulted in increased resolution time whereas specific questions asked by Support.com led to faster diagnosis

Response time

• NA

• Calls was answered within seconds

• Waited more than 20 minutes to talk to the agent

Agent behavior

• Courteous

• Courteous and helpful

• NA

Resolution time excluding response time

• 10 minutes

• 15 minutes

• 10 minutes

Observations

• Customer had to schedule calls an hour in advance

• Agent followed a specific script which ‘dragged’ the whole process

• Agent asked more questions about the problem which helped to diagnose the issue faster

Cost

• $140 for unlimited support on one PC

• $199 for unlimited support on one PC

• Starting @ $10/month for entry-level support such as data backup

•

The Inc. Digital Network team have provided this review based on two PC problems: a blank screen and a missing Microsoft Word Ribbon

Note: This study was conducted in May 2010; prices of plans may have changed as of now; (as reviewed by Inc. Digital Network in May 2010) Source: Inc. Digital Network

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Consumer subscription plans Annual Plan

Three Year Plan $379.99

$299.95

$349.99

$279.99

$249.00 $199.99 $199.99

$169.99

$129.99 NS

• •

•

Annual subscription remote-service plans generally cover nearly all software and remotely solvable issues The pricing is pretty straight forward for players like iYogi, Geek Squad, AT&T and Radialpoint where there is an upfront payment for annual support. PlumChoice has a monthly plan, which has be subscribed for a minimum of 6 months, and costs $24.95/month, adding up to $299.95 for an year The coverage generally remains same across the plans (except some plan provide a free backup/PC tune-up service along with the support plans

•

• •

Some companies have 3-year remote-service plans which cover benefits similar to the one year plan, just that they are extended to a three-year span Dell Service Centre provides such plans for 3 years a 349.99. This plan is actually a discount over three one year plans sold together. Office depot plan can be availed only on systems purchased directly from Office Depot only iYogi gives the 3-year plan as an extension to satisfied customers who just have to pay the difference to upgrade from a one-year to a three-year plan

Source: SGS Primary Research Company websites

*NA – Not Available; NS – No Service