THE TECH REPAIR INDUSTRY IS HUGE - But... No One Knows Much About It. Sad But True!

The TECH REPAIR INDUSTRY is huge! I mean really, really big. Billions of dollars in revenue flow thru thousands of tech repair shops and independent tech repair people all over the country. But MOST people don't even know that tech repair is a thing! Sad 😞but true!

You see, when my company started repairing cell phones as part of our AT&T retail business in 2006 every single customer would say, "I never knew anyone who fixed phones". Then when I opened my first standalone repair shop in 2010 almost everyone who came into our shop would say, "I never knew anyone who fixed phones". Well of course, that made sense, because we were one of the first companies to offer on the spot immediate cell phone repair in the country. The thing that really surprised me was that for ten years we still had a lot of people coming in and saying the same thing!?

INDEPENDENT RESEARCH

Before I sold my repair business in 2016 I decided to do some research. I went out to different locations around the Washington DC Metropolitan area, where I live, and I asked people a simple question, "If you broke your phone what would you do" and then "where would you go?"

I was really surprised by the answers I was getting so I moved to different locations around the city and into the suburbs. I even asked tourists that were visiting DC from all over the country. In all I asked about 1,000 people this important question (that I was surprised no one had ever asked before) and here is what I found out:

Almost 75% of the people I asked said they would go back to the place they bought it. Less than 10% said they would get it fixed then of that 10%, less than 1% could name a repair shop by name (two of the locations where I asked people this question were on the same block where there was a nationally known repair company location). A good number of those 10% that knew about repair also said that the carrier store would do a repair. An interesting number that I found was that 13% of respondents simply said they would just go buy a new device. What???!!

People don't know about tech repair! Those of us in the industry for a long time have done a horrible job of communicating about our industry. Horrible!!

"Not true WiGoMan because us folks in the repair biz is smart" said every repair shop owner ever. "We'z got a complex marketing plan to solve that there problem."

I know, I know you "market" to carrier stores near you by having "donut parties", buying them pizza or maybe you just straight up bribe them with a few dollars -- which is very popular in malls BTW.

Here's the problem, first of all referring customers to third party repair is against EVERY carrier store policy across the country. So none of them can 'officially' do it but some still do, right? Your buddy at the AT&T store has your back and he's sending you customers right? Well... Kinda. 

When you drop off donuts, home baked cookies, pizza's or a bag of cash they love you and, yea they'll send you some business from time to time. But when you're not around they don't even know you exist.

How do I know, once again research - data doesn't lie friends! In 2017 I was doing research for a repair company trying to break the 'Trade Route' (more on that later) of consumers going back to the place they bought their device when it was broken. I visited hundreds of carrier locations (AT&T, T-Mobile, Sprint & Verizon) in the Mid-Atlantic region - no Apple stores because they have a VERY strict policy on third party repair (go figure, huh?).

Here is what I learned, first of all carrier stores see on average 12 broken devices a day -- some as many as 50-60 a day in high volume stores. Building awareness is critical here but how much awareness have you built and is it working?

The first question I ask when I enter a carrier store incognito is, "I have a broken phone. Do you know where I can get it fixed?" Almost 0% say 'no' when I first ask the question but every once in a while I get someone (always in a mall location) who will point me to the repair kiosk in front of the store. More often than not they go into a sales pitch, followed by denial of repair, followed sometimes by the suggestion of committing fraud (opening up a new account just to get a phone then cancelling it after their commission charge-back period is over). Repair is NEVER the first option and usually the last one after I am about to leave (as in, "hey buddy here's a business card for a guy I know").

At that point I lose my disguise of a customer that might be a potential sale for them to help them meet quota that month (my costume being a dude with a broken cell phone in hand) and we talk about what they really think about tech repair. Here is what I found out: 

• A little more than 50% think repair is a bad option (wouldn't recommend it)
• Less than 30% could name a repair company by name
• Of the 30% about 21% named UBREAKIFIX (most jumbled the name)
• Of the 30% about 7% named ZAGG
• Of the 30% about 2% named Cellaris
• Less than 2% knew about on-demand repair but MOST thought it was a great idea.
• Biggest complaint for those who do refer to repair shops is not knowing the prices and/or availability for repair and having difficulty contacting them.
• A good number thought repair was a great idea and were considering opening their own repair shop (seriously lots of unhappy people with their job here but could see the clear potential)!

I have repeated this survey over the last three years and the numbers have not changed very much, except the rise in people knowing about on-demand repair which has seen a slight increase.

Okay, let's back up for a minute and ask an important question; Why do people feel the need to go back to the place they bought their device from in the first place? Herein lies the biggest issue that the tech repair industry faces.

The Trade Route

According to Wikipedia a trade route is, "A logistical network identified as a series of pathways and stoppages used for the commercial transport of cargo." In other words it's usually a way of doing things that people get used to and it's really, really tough to break that pattern. The cell phone industry has an established 'Trade Route' that has been around for decades. They have trained their customer to come to them for EVERYTHING. You can go back even farther and you'll see that the Bell System started it all by building an even stronger Trade Route. Simply because they were the only way to get phone service or get it fixed in the entire country for almost 100 years!! Judge Greene, whom old-time Bell/AT&T employees despise, broke that up in 1982. 

Cool history lesson there Mr. WiGoMan but what does all of this mean?

A lot, actually. Trade routes are hard to break, but not impossible (see Uber, Lyft, Amazon, etc.). Changing the pattern of how people deal with their broken tech is a hard task! Getting customers away from their long established habit of going back to the place they bought the device is going to be almost impossible UNLESS we all work together.

Listen this isn't some kind of of kumbaya moment here but the reality is no one company that is currently in tech repair is big enough to battle the titans. No One! And there are some pretty big titans working AGAINST the tech repair industry. The biggest titan is Apple ($265.5B in revenue), who is not only the biggest TECH company in the world but actually one of the biggest companies in the world and their LOVE for the repair industry is well documented. In fact here is a recent news headline:

Apple Is Still Trying to Sue the Owner of an Independent iPhone Repair Shop

This particular case even brought the tech repair industries mild mannered unofficial leader of independent tech repair shops everywhere, Louis Rossmann (Big fan BTW), into the case. Which, of course, he posted on his YouTube channel recently.

Apple is not alone as a corporate titan against the tech repair industry; AT&T ($170B in revenue), Verizon ($130B in revenue), Asurion ($6.2B in revenue) and others all have a vested interest in stopping the Right to Repair movement and crushing the independent tech repair industry. They all want to continue controlling the trade route of how you buy your phone and what you do with it when it breaks!

WOW, WiGoMan. You're Bumming Me Out Here! Can't we go back to that Kumbaya thing?

Understood, so if you need this song right now take it. If you need it TAKE IT!

Despite the success of the overall tech repair industry the vast majority of people STILL DON'T KNOW THEY CAN GET THEIR PHONE FIXED. That's a problem. Messaging in the tech repair industry sucks! Plain and simple.

I know what you're thinking, WiGoMan, our company does $50-60 million in total revenue or we've got hundreds of locations... Which is GREAT! Good job congratulations! I support you all big and small. I think many of you have done a tremendous job. But guess who is on the forefront of the customers mind (hint, it's not you)? The retailers are way ahead of you (Apple, Best Buy, Carrier stores, etc.). This is where customers go when they break their stuff, it's a fact. Then the insurance companies -- many estimate the attach rate for customers is around 40-50% of phone sales. At long last if the 'trade route' can't help the customer they MIGHT come to you.

The good news is that as the 'last option' for many customers the tech repair industry is an estimated $4 billion industry (I think it's actually a lot bigger, but more on that in a future post) and has a lot of potential in front of it for MAJOR growth (Again, I'll share more on that in a later post). The bad news is people still don't know that much about you and I'm not so sure that will change anytime soon unless something changes.

You know, I have met with and talked with many people in the tech repair industry over the years. I attended trade shows, spent a good amount of time researching the industry and here is what I can tell you about it. Most people in the industry are opportunists and not innovators. These people simply saw an opportunity and have tried to meet it with varying success. They have gone after the low hanging fruit by replacing Apple screens (pun intended) and some have grown to becoming substantial businesses (Again, congratulations you have done well!). But no one has disrupted the repair industry or created anything someone else cannot duplicate easily. Which means it's ripe for the picking (or crushing) if things don't change or if no one does anything different!

In 1984 a few cellular industry folks (carriers, handset makers, retailers, etc.) decided to form an association to work together to promote a fledgling group of companies. That, at the time, had less than a 5% market penetration rate. Nobody knew the advantages of owning a cell phone and the industry had a very uncertain future. Fast forward to 35 years later, CTIA has helped develop this ragtag industry into a powerhouse full of titans with more than 400 million US wireless subscribers (more than 100% market penetration!). You can find this data and more on the CTIA website. 

You know what you won't find on the CTIA website A.SINGLE. MENTION. ABOUT. SUPPORTING. REPAIR!! You will, on the other-hand, find to date 41 letters of opposition to repair.

ORGANIZE OR DIE!

Please follow my blog, comment and follow me on twitter @RobBobLink