Competing with Computer Repair Pricing from Office Depot’s Tech Depot

Do you have a stake in an independent computer repair business? And are you concerned with staying competitive with the repair pricing from retail giants such as Office Depot, Staples, and Best Buy?

In this post, we’ll look at how Office Depot’s Tech Depot Services markets and positions its PC repair services -- and what this means for independently owned computer repair stores.

Tech Depot Services and Its “Freebies”

Tech Depot is marketed as the technology division of Office Depot, an NYSE-traded company with over 1,600 stores worldwide, annual sales in excess of $10B, and approximately 38,000 employees.

While the Tech Depot brand itself offers an impressive selection of technology products, through both its in-stock and virtual inventory, here we’re looking at its services, which are broadly grouped into:

• Computer set up

• Computer fixes

• Computer support

The main Tech Depot Services web page Titled “Set Up, Fix, and Get Support for Your Computer at the Tech Depot” gives up about one-quarter of its above-the-fold real estate for very extensive Office Depot full website navigation.

Just below the super-sized navigation is a large graphic heralding, “24/7 Tech Service! Anytime! Anywhere!”

Next, you’ll find three small call-to-action (CTA) banners for:

• Free PC Tune Up

• Free PC Support Agent

• Free Data Back Up Online

The first two banners (“Free PC Tune Up” and “Free PC Support Agent”), although they carry different AdID tracking links, lead to the same landing page for the “Tech Depot Services PC Support Agent Now Includes Free PC Tune Up!”

 

From there, you’ll find a “Customers” download option and an “Associates” download option. Either option downloads a different piece of software, approximately 7MB, that presumably handles some basic PC optimization and gets your PC ready to connect with a Tech Depot support technician.

As an aside: The dual meanings of “agent” – meaning either a piece of software or a support technician – threw me for a loop at first. For a less technical consumer or small business owner, the likely personas for Tech Depot Services, testing some different copywriting variations may increase the desired download conversions. But from the AdID tracking links seen on the main Tech Depot Services page, A/B or multivariate testing is likely already on its front burner.

The third option (“Free Data Back Up Online”) leads to a page for “Data Backup by Tech Depot Services.” On this page, the headline promises that you can “Back up your files quickly and securely.” Although Tech Depot Services Data Backup offers a free 30-day trial, for some reason, that price wasn’t available on either the sign-up page or FAQs. If Tech Depot is trying to compete with consumer backup market leaders like Mozy and Carbonite, it really should practice the same kind of pricing transparency as can be readily found on the home pages of both Mozy and Carbonite.

So, in a nutshell, the three Tech Depot Services freebies are, in fact, really two freebies:

• a piece of software, optimized for fee-based online/remote support, with some free basic utilities included

• a 30-day trial of a presumably fee-based online data backup service – with its pricing structure not readily available

As you scroll further down the page, I found a non-clickable banner in ALL CAPS proclaiming, “We Fix Computers Next Day Guaranteed!”

Since the banner wasn’t clickable and there were no asterisks, a reasonable consumer could assume:

• “next day” is seven days a week, as the graphic just above promises 24/7 tech service

• if a computer isn’t fixed by the next day, there is no cost – but this is not the case

On further examination, at the bottom of the page, there is a huge disclosure problem hiding in 7-point Arial text, recolored as gray – likely done to hurt color contrast and reduce the readability of the text.

So from my standpoint, Tech Depot Services has a big disclosure problem with its “Next Day Guarantee” as the guarantee is only backed up by a $25 Office Depot Gift Card -- and that still has a lot of exclusions.

Office Depot should update its banner that advertises, “We Fix Computers Next Day Guaranteed!” to read something like, “We Fix Computers Next Day Guaranteed… Or You’ll Get a $25 Office Depot Gift Card! (Restrictions Apply).”

I’ve always had great respect for Office Depot as a retail leader and this disconnect with its guarantee needs to be addressed.

Computer Setup Pricing

The first category of Tech Depot Services is “We Set Up Computers.”

Computer setup is further divided into:

• computers

• networks

• software

Within these three categories, most services are offered in one or more of the following locations:

• in-store

• online/remote

• in-home

For in-store computer setup-related services, prices range from $29.99 to create recovery disks or install a piece of software, to $119.99 for the “Ultimate Protection and Optimization” – which seems to include, but isn’t explicitly mentioned, some McAfee security-related software.

In the middle of the computer setup price range, you’ll find services more typically provided by independently-owned computer repair businesses, such as:

• wireless printer installation for $49.99

• operating system installation for $99.99

It’s important to note that all prices so far are for in-store services.

If you require computer se up-related services in-home, as you might imagine, prices are significantly higher.

With in-house service, prices start at $129.99 for either:

• one device network install (if you require a second device, plan on a total of $159.99), or

• software installation (single application; if you need a software suite installed, plan on a total of $159.99)

For in-home installation service, the Complete PC Install Service price is $199.99, while the Ultimate PC Install Service price is $299.99 – which again, seems to include, but isn’t explicitly mentioned, some McAfee security-related software.

So perhaps the most notable finding of interest to owners of independently-owned computer repair businesses: for computer set up services, for a newly-purchased PC, Office Depot charges anywhere from roughly $200 to $300 – depending on what’s included.

Again, it’s worth pointing out that Tech Depot Services makes available a few online/remote options related to computer setup. These services range in price from $49.99 to $89.99. However, these services aren’t likely to be in demand with independently-owned computer repair shops.

Computer Repair Pricing

The next category of Tech Depot Services is “We Fix Computers.”

Based on the revenue concentration in most small PC-related businesses, this is the computer repair pricing information likely to be most relevant.

Unlike Tech Depot Services’ computer setup pricing, there is no category distinction between computers, networks, and software for computer repair pricing.

Most computer repair services are offered in one or more of the following locations:

• in-store

• online/remote

• in-home

In-store computer repair pricing starts at $49.99 for a PC Premium Tune Up and goes all the way up to $499.99 for an LCD/Screen Laptop Repair.

In between these extremes, you’ll find a handful of in-store options that would be especially relevant to owners of independently-owned computer repair shops:

• a Software Diagnostic and Repair Service priced at $149.99

• a fixed-price Laptop Repair (Hardware) – presumably for non-screen repairs – priced at $299.99

• a fixed-priced Desktop Repair (Hardware) priced at $349.99

Before we look at the online/remote and in-house computer repair pricing, I want to highlight how Tech Depot Services' in-store pricing compares to the pricing of most independently-owned computer repair businesses:

1. Independently-owned PC repair shops typically charge considerably less for diagnostic service

2. Independently-owned PC repair shops generally apply the cost of the diagnostic to any follow-up work that’s done resulting from what’s found during the diagnostic. (Tech Depot Services pricing page doesn’t mention anywhere that it offers a similar incentive.)

3. Independently-owned PC repair shops usually estimate the cost of laptop repairs and desktop repairs based on what actually needs fixing – rather than offering a single price where every single hardware repair is essentially priced the same.

4. Since both Office Depot and independently-owned PC repair shops sell a lot of desktops that are priced well under $500 (excluding the monitor) – and even some laptops at or below that price point, it’s hard to imagine many buyers at these $299.99 to $499.99 price points. And on top of that, consider that nearly all desktops and laptops come with a minimum of a one-year manufacturer’s warranty. So the only buyers potentially needing out-of-warranty computer repairs would need to decide whether to justify repairing hardware that’s likely already at least 33% to 50% through its anticipated lifetime.

Now the computer repair pricing for Tech Depot Services done online/remotely is pretty straightforward:

• $69.99 for a PC Premium Tune Up ($20.00 more than having it done in-store)

• $169.99 for Software Diagnostic and Repair Service (again, $20.00 more than having it done in-store)

In-home computer repair pricing for Tech Depot Services is also very simple. And unlike the in-store and online/remote options, there are no available upsell options for anti-virus software:

• $149.99 for Hardware Install and Upgrade Service

• $249.99 for Software Diagnostic and Repair Service

So how does this in-home pricing stack up against what competing, independent computer repair businesses would charge?

While $149.99 for in-home hardware installation may seem comparable, it really doesn’t tell the whole story.

Let’s say, for example, that a hard drive fails on a desktop PC.

Once the consumer has purchased the hard drive (let’s estimate that at $100 to keep this example simple), there’d be a $149.99 charge to install the new, empty hard drive while in-home. Then assuming recovery disks are available (not necessarily a good assumption!), there’d be additional charges of at least $159.99 for software suite installation. Moreover, though, because there’s no pricing listed for restoring recovery disks to a new, empty hard drive, it’s impossible to really ascertain what this computer repair would cost based on the Tech Depot Services website.

So this is an area where the independently-owned computer repair business could really craft a compelling advantage.

Computer Support Pricing

The third and final category of Tech Depot Services is “We Support Computers.”

Computer support is further divided into:

• subscriptions

• data

Within these three categories, services are offered in one or more of the following locations:

• in-store

• online/remote

• in-home

An Annual Service Card for Tech Depot Service Support runs $150.00. Paying by the month for this subscription is $14.99 – working out to roughly $180.00 for the year. So paying annually saves about $30.00.

While it’s a little bit of a stretch, this support subscription is kind of akin to a B2C version of managed services for computer support – something that Verizon has flirted with in its partnership with Geek Squad.

Within the Data section of “We Support Computers,” you’ll find in-store pricing for Data Transfer or Data Backup Up to 10GB:

• Data Transfer OR Data Backup priced at $49.99 (available in-home for $179.99)

• Data Backup priced at $29.99

So once again, revisiting the earlier in-home PC repair scenario, where an empty hard drive is installed into an out-of-warranty system with a failed hard drive, if data migration is required, tack on roughly $180 – bringing the total labor cost to roughly $490 (plus the estimated $100 cost of the replacement hard drive hardware). Ouch! And if you have more than 10GB of data to transfer, well, let’s not even go there!

The Bottom Line

There’s no doubt about it: the tremendous brand-name clout of Office Depot will attract a lot of PC repair businesses to Tech Depot Services.

In previous posts, we’ve looked at a variety of related issues, including:

• Is the Main Street Computer Shop a Dying Tradition?

• How Computer Support Services Can Sell Against “Best Buy for Business"

• How a Computer Consulting Business Can Take on National Competitors

But throughout this article, you’ve seen a number of areas where the independently-owned computer repair business has some definite pricing opportunities and marketing advantages.

Perhaps the biggest issue: Unless I’ve totally missed something, all on-site service is listed as “in-home,” as opposed to in-office. What does this mean? Tech Depot Services are clearly targeting the B2C space and home-based business space.

It’s hard to imagine even relatively tiny small businesses, with, for example, 10 to 25 computer users, finding a service that’s primarily focused on desktop PC repairs compelling.

So at the end of the day, studying the computer repair pricing from Tech Depot Services not only uncovers market opportunities, it drives home that Office Depot has no intention of positioning its computer repair services as an outsourced Virtual IT department for SMB clients any time soon.

 

What’s been your experience with Office Depot’s Tech Depot Services? What do you like about its computer repair pricing? Where do you think it most needs improvement? And how does it compare to your experience with independently-owned computer repair providers? Please let us know your thoughts in the Comments section below.

(And comments from Office Depot employees on this article are certainly welcome as long as (a) your name, job title, and store location are disclosed, and (b) you’re authorized to speak on behalf of Office Depot.) 

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