What Banks Can Learn From The Geek Squad

BY KENNETH CLINE AND J. MICHAEL BEIRD

Geek Squad "founder and chief inspector" Robert Stephens shows banks how to innovate and provide a distinctive customer experience.

| SYNOPSIS | Geek Squad CEO Robert Stephens describes in an interview how the lessons he learned building his company can be applied to banking. These lessons include constantly turning out new ideas to improve the customer experience; creating an identifiable corporate culture that reinforces that customer experience; generating marketing and branding resonance through operations rather than public relations; building innovation from the ground up, via small experiments; and collaborating with customers by offering free services, as well as premium paid services.

What can bankers learn from the Geek Squad?

The answer is not immediately obvious. Not many banks are ever likely to dress their employees in Men in Black-like attire, flash law enforcement-style badges at customers and tool around town in Volkswagen Beetles painted like police cars. Nor would many bank employees willingly embrace a "geek" persona, at least not the customer-facing ones.

But listen to Geek Squad "founder and chief inspector" Robert Stephens and you may find there's a lot banks can learn from his company, particularly in the realm of promoting innovation and a vivid customer experience. When Stephens appeared onstage last November at BAI's Retail Delivery Conference & Expo, he described how Geek Squad's unique marketing and branding is integral to the experience it delivers for customers.

Bankers often complain about how they're forced to operate in a commoditized industry. But Stephens faced the same challenge in tech support and still managed to build a company that truly stands out from the crowd. No mistaking those Geekmobiles and that self-described "government chic" attire. The Geek Squad?which was acquired by Best Buy Co. Inc. in 2002?now comprises 12,000 "agents" across the country and is currently venturing into new markets overseas, such as China and the U.K.

In the following interview, Stephens elaborates on how the Geek Style method?if not the mystique?can be applied to banking. As he told the Retail Delivery audience, "If you can do this in computer support, you can do it in any business."

Q: During your presentation last November at BAI's Retail Banking Conference & Expo, you described how the Geek Squad enhances the customer experience by the way it brands and markets itself?the distinctive uniforms, the Geekmobile, etc. Is it possible for banks to do something similar to create a distinctive customer experience?

Related Sidebars Robert Stephens Bio

Stephens: There's so much you can do; you'll never be done. That's why you'd better love this business if you're going to be with it. It's all about the human experience.

What employees wear only matters if everything else is great. Otherwise, it falls flat.

Think of every company not as a company but as a software program?as a system you're buying into. Customers, either consciously or unconsciously, choose companies based on their interface.

When I call my bank, I always get a human on the phone. That's part of the interface.

When I walk into a branch, the signage is done in a certain font, really big lettering. They seem to have done a lot of research on the aging population and adopted their signage to people who have poor eyesight. In fact, if a bank were to get really creative, they could notice you wearing eyeglasses and offer to send you an email saying, "Hey, at no additional charge, we'll send you a little plastic magnifying glass with your credit card so you can scrutinize your restaurant bill." Little things like that are functional, yet distinctive.

I would also encourage banks to look at the simple act of waiting on hold?waiting in line at the branch or waiting in the drive-through. The goal should be to make that experience so amazing that people want to wait longer in line. Can you make it fun to wait in line in the bank on a Friday, when everyone is trying to cash their checks? Can you make the carpet padded so you don't mind standing there for a while?

There are endless ways to innovate. We need cultures inside companies that are constantly turning out these ideas. I guarantee you that your employees and customers have the best clues.

Q: Would the kind of uniforms and branding you have at Geek Squad work in banking?

Stephens: They could, but they don't have to be outrageous. A costume is anything that is consistent, that has an identifiable link to the brand.

For us, the color scheme, the ties and the Geekmobile serve several functions. They're like a litmus test. Nobody likes arrogant tech support people, so we want very humble people. Our uniforms help accomplish that. You can't have an ego wearing our uniform.

Banks can have uniforms that are easily identifiable. They don't have to be expensive. Target, for example, has a very simple and creative uniform. You can pretty much wear anything you want, as long as it includes khaki pants and some kind of a red shirt. You can have a red button down, or a red Polo; it doesn't even have to have the Target logo. That's really interesting.

Q: Are there any inherent risks in the type of branding you do at Geek Squad? If you're creating an image, and you have people who don't fit the image, is that a risk?

Stephens: Absolutely. Your hiring processes are probably the most important contributors to the overall customer experience.

What makes the Geek Squad unique is that we are defined by the employee. Labor is our biggest expense, as it is with most other service businesses, so we define ourselves by our relationship with our employees. The technology will change, but how we deliver service and what people expect from good service, those things won't change.

The customer experience is a product of your employee experience, especially if you're customer-facing. For banks, the branch is just one part of it. That's why online and phone are probably the most important channels, because even if you come to a branch, you might be calling first to get driving directions, or going online to find out about the hours. So, the online and the phone experiences almost should be taken care of first, since they can be more easily controlled.

If you look at call centers as marketing operations and allocate some marketing dollars to improve their operations, then the operation becomes part of public relations. Nobody's expecting any of this from the banking industry, and that's the opportunity. Remember: Marketing is a tax you pay on having an unremarkable brand experience and training is a tax you pay on not having systems that are designed and integrated properly.

For example, we're launching Geek Squad in London early this year. I told the team: "You have no money for public relations?none." I told the marketing team: "You can't do marketing, but I'm going to give you money for creative endeavors. What you're going to do is, you're going to design the call center scripts to make it fun to be on hold."

The reason they have no money for PR is because I expect them to make that experience of being on hold enjoyable. The experience should be so memorable that the press will line up to call us and ask us to come on their TV or radio show and talk about it. Now, that's public relations. Operations become marketing. They become indistinguishable from each other. That's when you know you have accomplished your mission.

Q: How did you come up with that concept of public relations?

Stephens: When I was first running my company, I got called out to WCCO TV, a CBS affiliate here in Minneapolis, to do computer support. As they walked me past the newsroom, I saw a fax machine with press releases piled up all around it. Somebody put a trash can there to catch the overflow. I decided right then that I would never send another freaking press release.

The press is not interested in fake news. They want it authentic. They don't want media handlers. I forbid any of our PR people to ever come with me on an interview. All I use them for, frankly, is scheduling. They're in charge of my calendar. I don't care if I'm in a meeting, I don't care if I'm getting married, I don't care if the president of the United States is downstairs waiting to talk to me, if the press calls, they come first. And local media always gets precedence over national media because there is nothing more effective than local media, whether it's newspapers or radio or TV.

I learned that lesson because I never had money for PR, in the early days.

Q: At the core of the Geek Squad approach there seems to be an innovative spirit, the willingness to try new things. How can banks inject some of that innovative spirit into their own organizations?

Stephens: The motto when thinking about customer service or innovation should be: every company is its own biggest competitor. It's what you're not doing today that holds you back, or holds your people back.

There are innovators in every company. People have different kinds of creativity that unfold over different periods of time. There are some people in your company who are trying to do some really interesting online experiments and probably can't because of the process it takes within companies.

I learned this from not having the resources, as a small company, to do things. So you tend to do them differently. That's a lesson that I'm learning now, even in a large environment like at Best Buy. The best thing that ever happened to me was not having money when I started my company. That starves the organization, which fosters creativity.

A large bank may give up on innovation for many reasons, such as we're government regulated, we can't get things through too quickly or there are Wall Street pressures on a quarter-to-quarter basis. But I would argue that those pressures are the source of the creativity; they are not the limiter.

That's the riddle. We tend to give up too easily and just throw our hands up, saying, "Well, we can't innovate," and then complain. But that's a form of competition because that kind of attitude prevents you from beating your competitors.

I ran into our chief financial officer the other day in an elevator and said, "You know, the finance department is the most important catalyst to creativity in the entire company." He looked at me, like, "Really? Why?" I said, "Because you say 'no' more than you say 'yes.' And saying no frustrates people. But the successful people, the persistent people, will always seek to find a way."

Harvard did a thirty-year study of successful entrepreneurs looking for one trait that made people successful above all else, regardless of economic background, race, gender or whatever. Persistence was the only trait they could commonly find. Persistence, combined with restrictions, is what engenders creativity. Everybody would say they have restrictions in their company and that's good news. If you're not facing barriers, then you're not trying hard enough to innovate.

Leaders can turn that argument around and tell their teams, "Hey, if you're not frustrated, you're not trying hard enough to innovate."

Q: That's counter-intuitive, though, because a lot of large companies probably feel that the way to innovate is to give their people lots of money to do so.

Stephens: That's the quickest way to go bankrupt.

Look at Wikipedia, for example. If you have no editorial controls in place, no barriers, you have anarchy, and no idea can have value over another. That's going to frustrate the real great ideas because if there's no value, we don't value one idea over another.

Typically, people take an "us versus them" attitude in companies, i.e., they assume the corporate behemoth keeps down the individual contributor. But in my model, the corporation is a passive barrier, solely the creative catalyst, letting the ideas compete against each other.

That changes the dynamic. It's easy to blame the faceless monolith, but if you're competing for its resources against a peer, well that's different. You can look at which idea contributes to a better customer experience. If you can't measure that, then it's back to the drawing board.

That criterion creates a Meritocracy; it's one idea versus another. But the ideas should start small. If you ask for a lot of money for a project, you're going to be subject to a lot of restrictions, a lot of barriers. Not spending a lot on a project provides greater creative freedom because there's less risk for the organization.

These days, with more and more innovation being in the form of software and online experiences, software offers the ability to prototype tiny experiments online at a relatively low cost. It's not like rolling out a whole new branch banking system with bricks and mortar. Rather than spending $10 million on a prototype system, you're spending hundreds of dollars on little software features. If you don't think that's possible, look at YouTube and Google, which both started in garages. Dell's online ordering system started out as a little weekend project for somebody and they just built on from there.

Tiny experiments can snowball into great revenue producers, and that's what companies need to do. Software is your process in real time. It offers the ability to design, to experiment, at a really low cost. That's where I think banks are specifically missing out on a coming revolution in software development at low cost and high speed.

To give you an example, my bank has good online features and service. They recently added a nice feature where if my balance falls below a certain threshold, customized by me, they send me a text message. That's very convenient and empowering to me.

But I recently told the head of their online division they're missing one thing, and that's a financial calendar, which enables you to link money and time, based on fixed dates and intervals. For example, I notice that most of my transactions are repeats. Couldn't the bank give me some insight into those spending patterns? Could the system be used to detect fraud or save me money?

But best of all, I'd like to have my bank transactions talk to my calendar and remind me when certain payments are due and to help me plan my cash flow more efficiently. That's where banks can become like Google, which continually adds new features on their maps, such as traffic information, satellite views, three dimensional fly-throughs, point-to-point driving directions via mobile phone, etc.

Banks should continually set a goal of coming up with one new idea a month, one new little service. They don't have to be large, massive undertakings, but simple, tiny stuff.

I recently launched a rapid prototyping program at Best Buy called "Two weeks: $500." Basically, if anybody in the organization has an idea and can give us a prototype in two weeks, we'll give them $500 to develop a simple software feature or function to demonstrate it. The feature can be made accessible on the company network so people can check it out. Then, to take it to the next level, we can add a few more zeros, maybe do a $5,000 prototype. When you get to the $50,000 level, maybe you invite your top customers in to beta test it.

Eventually, you might move to the $5 million implementation, but you start with $500 to force that creativity and de-risk the idea to get it off the ground. You can't even get to the $5,000 level unless you've proven out some kind of working prototype.

Banks could design a financial calendar for their online system in that manner.

Q: And by financial calendar, you mean something that shows you graphically, in a visual sense,what's happening with your money over time?

Stephens: Yes. Imagine looking at a screen and it looks like a calendar. And you see recurring bills, like every month on the 17th the water bill comes in.

Intuit's Quicken already does this. I told my bank to just copy that, to give me a calendar and allow me at any time to synchronize that to my Outlook. Then I can see, hey, my Visa bill is due online today. Each day, I could see how much cash there is my account, represented by a bar chart.

Then, later, the bank could add other features. Like if your daily balances rose over a certain level, they could recommend you move a certain amount into an interest-bearing account and do that automatically for you. The bank could start collaborating with you.

In the future, I can see people bidding on your economic activity, similar to the way in which credit card companies bid for your business now. I think the smart banks are going to collaborate with customers and say, "Hey, how much is your business worth to us so that we give you the best deal?"

For example, right now, I aggregate all of my credit card purchases on one card so I can earn airline miles. While that's better than nothing, I could imagine collaborating with my bank where we both examine my total purchasing activity and the bank helps me shop around my activity to card vendors and the like. What is my total purchasing activity worth? What can my bank do for me?

Q: Does that collaboration include financial backing? Can a bank, as a lender, make a positive difference for an entrepreneur like you?

Stephens: No, unfortunately. The worst thing people can do is take on debt. You need to prove out your idea. If you have the money, you tend to spend it on office equipment and all sorts of luxuries and increase your overhead.

A bank can offer free services, so they're just basically there for the customer. It's like having a towel ready for a marathon runner. You're not trying to get them to focus right now on you.

For example, Google and Yahoo! give away free e-mail with unlimited storage and they scan all your e-mail for viruses. A few unobtrusive ads might appear, but they sign up tens of millions of people. They become a trusted name over time and eventually offer me paid premium services.

I think Microsoft's new Vista program will eventually be free, or some version of it. Google, for example, has free e-mail and then a paid version where you get more space, your own domain name, etc. I predict the basic version of Vista will eventually be free, albeit ad-supported.

In similar fashion, banks could agree to provide you free fraud protection if you share your purchase data with them. It could be a partnership.

Now, what could banks offer small businesses? Reporting information. Cash flow predictive analysis. You write one multi-million dollar analyzer that you provide, for free, to small businesses. But then you also offer paid premium services. And by the way, those premium services are free if you borrow money.

You can build trust by saying, "we feel confident that we are a visionary bank and we're not going to nickel and dime you."