Nerds on Call – From a Spare Room to 15 Locations with Ryan Eldridge

Co-founder and Senior Vice President of Nerds on Call – Ryan Eldridge

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Ryan is a self proclaimed nerd. (And YES we had the geek vs nerd chat!)

Discover how a simple ad launched his business to rapid growth, tips for working with your spouse, and how to deal when your biggest competitor (Geek Squad) is in every Best Buy!

Resources Mentioned on this Podcast:

• Customer Satisfaction is Worthless, Customer Loyalty is Priceless by Jeffery Gitomer

Check out CallNerds.com for more info!

Thanks so much for listening!

Transcript:

Welcome to Eventual Millionaire, I'm Jaime Tardy and today we have Ryan Eldridge on the show. Ryan owns a company called Nerds on Call with his wife, you can check it out at callnerds.com, apparently he's a proud nerd. I call myself a geek, but maybe we'll talk about that later. I'm really excited to have him on the show, Thanks so much for coming on Ryan.

Ryan Eldridge: Hey, Thanks, I'm happy to be here.

Jaime Tardy: Okay, it's so funny because I wasn't going to say this. Geek to me is cooler than a nerd. Do you think a nerd is cooler?

Ryan Eldridge: I don't think nerd is cool at all. I think Geek is definitely cooler. Nerds are definitely smarter. 

Jaime Tardy: Oh!

Ryan Eldridge: If I was going to ask somebody to do my homework in high school, I definitely would of asked the nerd instead of the geek.

Jaime Tardy: *Laughs*

Ryan Eldridge: And that's kind of what we do, we do everybody's homework.

Jaime Tardy: *Laughs* Good! So I don't have too? Sweet. Never mind, I love this show, I don't even care that you insulted me from the beginning. I think this is perfect. So tell me how you started your company, I know that was a few years ago. So what started Nerds on Call?
 
Ryan Eldridge: Well, we kind of started as an accident actually. I had been working in some parts of IT, but officially I ran my own website and owned my own marketing company. I had moved to Northern California, and no one needed the services that I provided in Northern California. One day, my mother in law got a virus. And asked me to come over and remove it from her computer, and I was like.. I have Norton, I can figure this out. I went over and removed the virus, and she said to me.. "This is so great, shouldn't there be someone out there to come to your house to fix this stuff for techno-goofs like me? Kind of like a plumber for your computer." And I said that's a pretty great idea. My wife and I said well let's give this a try, while we're looking for something else to do. Accidents happen. We put a little ad in the newspaper, we said hey nerds on call. There was Geek Squad that existed in Minneapolis, but they weren't national yet. And so we thought, we'll put a little nerds on call, a funny cartoon and say that we can fix your computer, and that ad came out on a Thursday, and by Friday we were booked for three solid weeks from 7 in the morning to 10 at night. I was just going to people's houses and fixing their computers. And that over, and over again. And I was like, this is crazy. There's something here. We quickly hired as many people we could, and over the course of 3-4 months, we blew through our initial investment of $60,000 , we blew through that just setting up office and hiring staff. And from that 3 month on, we've been profitable ever since.

Jaime Tardy: Oh wow, so you went big then? Okay so.. So number one you're a marketing guy, so you put an ad in the paper. So you sort of knew what to expect, or maybe you hadn't seen that crazy amount of feedback. Have you? I mean that seems a little insane that your booked that fast from just one ad?

Ryan Eldridge: You know, we didn't expect it at all. Here's the thing it was mid 2000, like 2003-2004, that we put out our ad.

Jaime Tardy: Hmmm.

Ryan Eldridge: Newspapers weren't the hottest thing on the planet. And so what we did, here's how smart we were? We put my wife's cellphone number on the ad? Because we thought you know, if we're in the middle of Target and we're buying some cereal, we wanna be able take that call. If we make a few hundred bucks a week to make the mortgage, then perfect. Her first cellphone bill was over 3 grand, just simply because people kept
calling. She could never actually put the phone down, she would have the phone in her ear, "Yeah okay, yeah.. I'll make your appointment." Meanwhile, voicemails kept coming in over and over again. And so when she got off the phone, she'd have to call the voicemail and calls kept coming in. It was Redding, California which is where we started. It's a small town of 90,000 and we were booked out like crazy. We had never seen anything like it before.

Jaime Tardy: That's really crazy. I worked at ISP, when I was 16 years old. It wasn't even 2000. We did that. So people would bring their computers to us, and I'd plug it all in, and figure out what's wrong with it, and we'd fix it. So, it already existed, but the only thing that didn't exist was you actually going there. And that was a huge thing. So that didn't even really exist, anywhere.

Ryan Eldridge: No, it was local computer shops. I had maybe a dozen local computer shops in Redding, California at the time. Some were doing really well for themselves. But they didn't really go to you to fix it though. And at the time, desktops-

Jaime Tardy: They were huge!

Ryan Eldridge: Carrying this major desktop in and this little old lady trying to figure out how to plug it all back in. Us coming to them was the lynch pin to the success. Now everybody does it. You can throw a rock
at somebody who does computer repair and comes to your house, which is.. a new evolution of our business. Laptops, tablets, phones, us coming to the house is almost a little inconvenient for a lot of customers

Jaime Tardy: Yeah, that's interesting. Eventually I wanna talk about that. The way technology is changing is insane. So, but tell me about cause you went from oh, my goodness lots of calls to we have to do something more with this. And, really put a ton of work and investment and time to build it really huge. Have you ever built anything that big that quickly before?

Ryan Eldridge: No, no.. I had a marketing company prior to this. I had maybe two or three employees. Prior to that, I worked in retails. It wasn't my own thing, but it was a shoe store chain that sold men's shoes in Southern California, and I was second in command in that company. We had 8.5 million dollar in sales. But it wasn't my own baby. And once I was second in command, the boss had to die, in order for me to go forward. And I knew that was the end of my career there. I'm not gonna get rich working for someone else.
 
Jaime Tardy: So you sort of knew a lot of the systems and the models that needed to happen. And you had your own marketing company, so you knew the marketing side and how it was like to run your own company. It was very synergistic that everything fell in place for you.

Ryan Eldridge: Yeah.. Yeah.

Jaime Tardy: That usually doesn't happen.

Ryan Eldridge: It started when I was a child, I was relatively independent as a child. I graduated high school when I was 14. And I just kept moving forward. It wasn't that I wasn't very smart or anything. I don't want you
to get that. I tested out so I could get out, because high school was just kind of a waste. I wasn't very socially.. you know.. "Heyyy!"

Jaime Tardy: A nerd? Nooo.. *Laughs*

Ryan Eldridge: So I didn't have many friends. So my social circle was relatively small, so being in high school was uncomfortable. And I knew that as soon as I got out, I could do something. And so I started college and stayed there for two years, and then dropped out. And again it felt just like high school. And while I could learn a lot
of great facts about John Adams and stuff, nothing taught me how to make money. And I knew that if I stayed doing those things, that I would stay in that same treadmill that I had seen my parents on, and you know the same story. Work hard, stay in school, do your best, you know... get good grades, get into a good college, and somebody will hire you. I remember having a conversation with my wife who was working for Meryl Lynch at the time, when I told her I was going to start my own marketing company when I was 23, I was going to leave a well paying job, and I was going to start my own company. She was working at Meryl Lynch, and she said don't do it. You don't know what's going to happen. What if the economy isn't good, or what if you can't find customers. Or what if this? All of those unknowns? How are you going to take care of the family if you can't make any money? And I said, I could get laid off tomorrow, and I have no control if I work for somebody else. I have less control if I work for somebody else. And she-something snapped in her when she heard that, the
weird story.. not funny. A few years later, she got laid off from Meryl Lynch, and I was like, see here there's your

Jaime Tardy: *Laughs* See but I mean that's what we were taught, that's what I was taught. You go to school, and get good grades. What was your motivator back then though? Was it the freedom of doing something on your own, because you didn't want to get laid off or was it money? It sounded like it was money, it sounded like it was money there too.

Ryan Eldridge: I'm a greedy little pig. You know, I watch Shark Tank. You ever watch Shark Tank? Jaime Tardy: Oh yeah..
Ryan Eldridge: I love it when the guy calls himself a greedy pig, cause that's how I am. It's not like I want to surround myself with piles of money. I wanna spend it. I wanna buy cool things, and you know go on vacation and stuff. I hate working, I'd love to just live a life of leisure you know. By the time, I'm 90 I'll probably get there.

Jaime Tardy: Okay, that's really interesting. It's funny. We have a lot of people on the show, and a lot of the times they're like I love my work so much, I don't call it work. And you're like, I don't like work, I'd rather do something else. So why?

Ryan Eldridge: The greatest day at work is still not as great as sitting on the beach in Hawaii. That's all I gotta say. That's what I'd rather be doing.

Jaime Tardy: So, why aren't you then? Because you have a company to run?

Ryan Eldridge: Yeah, I'm still working. Yeah, I have a company to run. I have a hundred people who are relying on me to show up to work everyday. So I still have to show up

Jaime Tardy: Hmm.. We should talk

Ryan Eldridge: Laughs
 
Jaime Tardy: So tell me, you start this. Your over three months into this. You're going gang busters, and things are going crazy, it didn't tap out and things kept growing and growing. Like how fast did you grow? Tell me your one year, two?

Ryan Eldridge: I stopped fixing computers, and became a full time manager and developer. So we could start getting customers in, we created our own in-house ticket system to manage customers and contacts and things. After that three month mark, I realized that if I continually work to my maximum production, eventually I'm going to hit my end, where I can't work anymore. There's only 24 hours in the day, and one of those hours I have to sleep. So, we're going to hit a wall. So, we hired in some really, really smart people, and luckily we hired them cheap. They didn't know how smart they were, so we trained them and within the year we opened our second location in another small town named Chico, California. And after we broke through that wall or that ceiling, so to speak with the second location, we quickly opened up multiple locations. So we opened our Sacramento office, just three months after the Chico office, and then we opened our Yuba City store, and then by 2007, we opened four stores in a row ? Backerville, Stockton, Fresno, and Bakersfield. And then once we hit that grade line in California that they call the braze between central California and Southern California. We stopped and thought we could keep going south in the meyer that is the marketing nightmare of Southern California or go forward
and see what's going on in the North West. So we went started moving north. We opened 4 stores in Oregon, and finally one in Tacoma, WA.

Jaime Tardy: Geez. Okay so first, what made you decide that you were going to start that second store? Because the thing is a lot of people are like I have this business and it's going well, so you tweak it. What made you decide expansion?

Ryan Eldridge: We were in a hurry. Because in 2004, we were new. There was nobody doing what we were doing. So we thought somebody is going to eventually figure this out, and they're going to eat our pie before we can get to it. So we thought it's better to move forward as fast as we can, and invest every dollar back in the company, instead of rest on our laurels and hope nobody else figures it out. That was really the impetus that really moved
us forward.

Ryan Eldridge: It is risky. But the nice thing is that we have a specific philosophy. I've heard someone else say it recently. That every dollar brings a friend. Anytime we invest anything, it has to yield more money. A lot of technicians, we call them nerds obviously, a lot of our nerds work on machines that have been donated from other places. So, or we'll cobble together machines for shop computers in the shop, rather than invest in new machines that aren't necessary. A slow machine can still do a back up as well as a fast machine. So you might as well stick with a slow machine. So we're very frugal. My wife is my counterpart. I'm the idea guy.. I always have the great ideas. Her job is to say no.

Jaime Tardy: Like she did the very first time, when she didn't want you to quit.

Ryan Eldridge: It's kind of a funny story, we were moving and expanding so fast. We had opened our Sacramento store, and it was sucking up a lot of resources. The marketing was really expensive, we'd never been in a big city before, and we were still trying to figure it out. We were only a year or two old at the time, and Shane, whose our Vice President but was a general manager at the time said "Boy, we really need to open another store to take the weight off of Sacramento, some place more profitable. A small town that we'd been successful in before. And we saw this little town called Yuba City and Marysville, which are kind of twin cities between Chico and Sacramento. And I said let's open up there, the marketing will be cheap. We'll be able to service a community that has no competitors, let's see what happens. And of course my wife said no, and we did it anyways and didn't tell her.

Jaime Tardy: You didn't tell her at all!?

Ryan Eldridge: No, no.. we were really bad. We hired in staff, we didn't rent an office space. We actually commuted them in from the other stores, and started servicing the community. And once we turned a profit, then we told her.

Jaime Tardy: Then you told her?! See, I told you it worked

Jaime Tardy: Hmm.. That's one good thing, or not good thing with working with your significant other.

Ryan Eldridge: *Laughs*

Jaime Tardy: Wow! Yeah, that's insane. So tell me about that, working with your significant other, I mean is tough! Especially because if you did that to a business partner, they'd probably be pissed, but you wouldn't have to go home with them. And so that makes a big difference. So how do you deal with working with family?

Ryan Eldridge: With Andrea, there's a solid line of what is her and what is mine. When it comes to innovation and ideas, she trusts explicitly with anything that I wanna do. I'll give you an example. In 2007, when the economy was taking a nose dive, we were doing pretty well, pretty well. We had a 100% growth that year and doubled our size, so we were sailing along pretty good. We noticed that the phone calls started going slower, and costing us more money to do marketing. And we knew that something was wrong. We weren't quite sure what
it was. And, so I had come to my wife, and said I had an idea, "What if we increased our training and increased our customer service, rather than spending more money on acquiring new customers?" I had read a book by Jeffrey Ginterburg, called "Customer Satisfaction is Worthless, Customer Loyalty is Priceless". And in the book, he writes like he talks, so literally there's big, bold, he's screams at you throughout the book. It's a little annoying. Mid way through the book he says ?How much money are you spending to acquire new customers?' Well I
know how much it is, it's actually 187.50. It's how much are you spending to retain the customers you already have? And I said nothing! Who pays to keep customers? That's ridiculous! I want new ones. What we found out, after doing research.. It costs us 187.50 for a new customer, and we only make 161.90 off that first transaction.
So we're losing every single time. That's a little weird. We didn't know that until we started looking at it. I spoke to my wife, and sat her down, and told her we're going to try this Jeffrey Ginterbug idea of never saying no to a customer, we're going to say yes to everything. You know a lot of time in computer repair, just like automotive repair, a lot of people don't understand their computer very well. So if we go out and do a bunch of work on someone's machine, and then six days later, their printer stops working... They think it's related. They say well oh, you're the last one to touch it.

Ryan Eldridge: We used to fight that! "Well, you know m'am, we didn't touch your printer. And oh! look it's out of ink, so you need new ink!" And the customers would feel.. eventually they would understand it wasn't our fault. They wouldn't feel good about it. It wasn't a good feeling after their transaction. We said what's the big deal, fix their printer? If they need ink, let's just go buy some ink, and put it in there and make them happy. And stop worrying about it being our fault, or them thinking we're doing bad things. I said if we walk away and say no to customers, they're always going to think badly.

Jaime Tardy: Mmm

Ryan Eldridge: And my wife had said there's no way we can do that. We can't afford to send people out for free calls, there's no way we can do tech support for people for things that aren't related for what they paid us for, we can't do that. And I said well there's a lot of companies that give great customer service who are massively
successful, and they're not taken advantage of by their customers, which is one thing she was worried about that we'd get scammed. "Oh! Free customer repair or free computer repair, how awesome!" And I said people don't
do that. There's not a huge amount of people sitting in our parking lot wanting to take advantage of us. There's a lot of people that just want help. And when they complain or have a problem, it's mostly because they don't understand. So we're just going to say yes to everybody. And she said, no, no we can't do that. And I said Costco can afford it. Nordstorm's can afford it, and how many times have you walked into a place, to return something and you were just outside of their return policy? You had to be a master criminal. You had to think of all kinds of ways to con that 16 year kid out of returning that item that you bought? I said how does that make any sense in our world, when I'm fighting for every dollar? I should make customers feel welcome, and if they want to return something? Why would I say no to that? I'm just going to send it back to the manufacturer anyways?

Jaime Tardy: Yeah

Ryan Eldridge: We came up with this great idea of never say no to a customer. You have to have permission from a manager to say no to a customer. And, once we stated that policy, Wow! We went nuts! That's when we opened up the rest of our stores, so!
 
Jaime Tardy: Really?

Ryan Eldridge: So now customers are insanely loyal, we have 74% retention rate. And satisfaction rates are 97%, you ever hear 97% and you always think about that 3% and wonder why they're not happy. And but when you look at retention rates, it's a lot different. Customers are very fickle, they'll come in and buy something one day, and they go into another store and they're loyal to price.

Jaime Tardy: Hmm

Ryan Eldridge: 74%, every time we get a new customer, we have a 74% chance of retaining them. We have almost unlimited growth cost abilities, and most people don't look at that in retail or any service industries. They never look at retention rates to see when customers come back. We know they come back 1.3 times a year on average.

Jaime Tardy: Mhm

Ryan Eldridge: They spend 20% more every time they come back. Every time! So, why wouldn't we continue to invest in our customer base?

Jaime Tardy: Aha!

Ryan Eldridge: It makes sense

Jaime Tardy: Yes it does!

Ryan Eldridge: Our division of ideas is that she knows that I can come up with innovative ideas and new things, and move forward. And her job literally is to say no to challenge me to come up with a better idea or a cheaper way to do it, or something else. And so when she says no to me, it keeps me motivated. I mean, you said you're a Star Wars fan right?
 
Jaime Tardy: Yes

Ryan Eldridge: So George Lucas came out with the best movie arguably in the world, Star Wars. The reason why he came out with such a great movie is because he had a budget he had to work on, the studio made him not
do everything he wanted to do, he was forced to live in these constraints and he made the greatest movie in the world. Really fantastic, what happened when George Lucas had unlimited budget, could do whatever he wanted, nobody said no.

Jaime Tardy: Jar Jar Binks happened! That's what that happened!
Ryan Eldridge: You get Jar Jar Binks and you get you know underwater fish eating.. George! Seriously! So.. Jaime Tardy: So that's what she does.. It's funny. You know it's funny, my wife said no. My wife said no to every single thing you came up with. But I figured out a way to do it any ways. That's really really funny. That's a great thing for somebody, *laughs* to counteract somebody like you. Let's do this thing, it's totally awesome. Tell me about an idea where she said no, and you think it's a really good idea, and something you came up with and you didn't actually do it? Because it sounds like all the examples you've given me, you've done it any ways whether she said no.

Ryan Eldridge: Yeah, I kind of have a filtering system. I can't think of a time where she said no, and it worked out. It would be kind of like admitting defeat if I think, if I remembered it. But if I remembered it, I'd tell you. I really would.

Jaime Tardy: She's still listening, it's fun!

Ryan Eldridge: The biggest thing is the budgetary. I'm really bad with money. I'm terrible, terrible with money. I'll pay whatever I have to pay, you know. I'll buy the brand new Mac, I don't tell anybody but I tend to pay employees too much. She says no to those things, because she's like what do you need a new i7 macbook for, all you do is cruise the web? Wow! So things like that she keeps me in line, I never win those arguments. So maybe there you go.
 
Jaime Tardy: I find it very funny. Because what you just told me beforehand hen you were starting this, because you said you got the first few employees for really cheap which was really good. And who cares you can back up on a slow machine, but you'll like no, no, no I need the fastest.

Ryan Eldridge: Heck yeah. I mean I drive a Mazda but man in my heart I'm driving a BMW. I'm telling ya!

*Laughs*

Jaime Tardy: Oh, that's amazing.

Ryan Eldridge: Dream big, that's what I say

Jaime Tardy: That's whats perfect. Because she's the money person, Meryl Lynch and all that stuff, and then you have you who goes all crazy. Well you know that's what's funny. That's what I was going to ask you, because some of the information that I learned about your company. The creativity that you came through, especially when
you guys were going down and you decided to do the customer satisfaction or customer loyalty, that's huge! And scary to go balls to the wall! You know what I mean? To go crazy, trying to get this thing to work, which you don't know and your wife doesn't know, whether or not it's going to work. What made you sort of, not blindly because you had some inkling, but what made you blindly go after that, knowing it was the right thing?

Ryan Eldridge: Really, almost everything in our company, we try to put ourselves in our customers shoes. We once hired somebody in our marketing department, and he said what is the most important quality that I can have? Is it my knowledge, or this? No, it's your empathy. That's your most important quality. If you can think how your customer thinks, you'll be more successful. To give you an example, if you go to our website, we have a lot
of cartoons. We call it a Fisher-Price website, there's only a few buttons to press, there's not a lot of stuff to get lost. It's very simple, very easy going. The cartoons are very cute, and funny and very nerd-sque. And we make it look like a comic book, and the idea was that we wanted to be very approachable. Most customers when it comes to customer repair, they feel stupid. You know, Oh, I should be able to figure out why my print spooler isn't working, or I should know why PhotoShop won't load today. This is something that millions of people on the internet know how to do, why can't I know? When they call us, apart of it is this shame of not knowing and the thought that they can be taken advantage of where their in this situation, they're asking for help from somebody, and they don't know.. It's the same feeling when I go to the auto mechanic and he says my clutch is out, and I'm go, do I have a clutch? I don't know what you're talking about?"

Jaime Tardy: How much is things going to cost?

Ryan Eldridge: Exactly! We seen how some of our bigger competitors were approaching their marketing. Take Geek Squad, they are our biggest competitor, even though they're not a worthy adversary. Uhh Hmmm

Jaime Tardy: Well, I do like the name geek better, but I won't associate myself with them, okay?

Ryan Eldridge: Well when Geek Squad came out, their big play was we're smarter than you! All their marketing showed hey look at this, we got all of these really smart people, and the customers weren't treated necessarily stupid, but they were treated more like victims. You'd see them walk up with their customer, all shame faced them, and the geek would take it from them and everybody would be happy. They've done this over time where they have these black and white photos, very standoffish, shot from the bottom up, so they look bigger than life. And they really portrayed their geeks as these really super smart, slightly intimidating people. And we thought, that's not the way to approach this. Customers are already intimidated, why do I need to scare them? So we thought we'll make it fun, a little kooky. We call it whimsical. When a customer comes to us, other than making them feel dumb or feel like they don't know any better, or we're smart, you should listen to us? We'll make it feel like Sunday Comics,  you know that feeling you get when you have your coffee and you're looking at the comics, and you're like Oh! Look at Garfield, he's eating lasagna again. That silly little man or Lucy is taking that ball again. I assume Peanuts are there, I saw them in the newspaper

Jaime Tardy: A newspaper, what's that?

Ryan Eldridge: That's the idea, we wanted to be fun and joke around and be the butt of our own jokes. That was our idea, we really wanted to move forward with being easy to work with, comfortable, and whimsical. Does that make sense?

Jaime Tardy: Yeah, and your website, you totally get that! What I'm wondering though is that Geek Squad, I mean I've heard of them before, and I'm sorry before I met you, but I had never heard of Nerds on Call. What happened when Best Buy and Geek Squad sort of came together? Was that detrimental to your company or anything like that

Ryan Eldridge: That was the brilliant marketing move we could of ever made was to get Best Buy and Geek Squad together.

Jaime Tardy: So why?

Ryan Eldridge: Robert Stevens, whose kind of a hero of mine, he's the guy who started the Geek Squad in Minneapolis, he's now the head of Geek Squad for Best Buy. The guy is brilliant, he's really charismatic and fun and exciting. He created an amazing team that never existed before. He was the pioneer for on site computer repair. I didn't know much about him until years after we had started, and started looking into what he was doing. You gotta know about your competitor. And I really began to respect him, and what happened was when Best Buy took it over, they tried to fit into their retail model rather than service model. They started to use the Geek Squad to sell items in the store, rather than the own profit center.

Jaime Tardy: Yeah

Ryan Eldridge: They tried to compliment it too much. When they did that they kind of gutted the organization

to some extent. They took the soul of the company so to speak. Their training program started getting lower and lower, and hiring less and less experienced people and more sales people. And now when you get a Geek Squad agent, their training is minimal, a lot of the work they don't do themselves. As a process, they have changed. They're no longer what they were. We saw that, we never wanted to be like that. We wanted to hire people, and nerds who were into doing that stuff. So, when they showed up and they opened the store in Redding California months after we had started. We were nervous at first, thinking that we're going to be gone, these guys are going to take our lunch. Millions of dollars in marketing, they're going to kill us. What happened was that people would go to them and get their stuff "fixed" so to speak and then they would hit their customer service wall, where that printer stopped working or the hard drive wasn't spinning as well, or whatever issue would come up afterwards. And they would become dissatisfied and they'd go back to the hometown guy, the little company that had been just started here. They started coming to us, and we started seeing actually more customers that we weren't able to touch with our marketing, coming to us because they were dissatisfied with our competitors. And we thought that was pretty awesome!

Jaime Tardy: That works out a little bit well in your favor! Ryan Eldridge: Yeah!
Jaime Tardy: Good thing you actually implemented the customer loyalty stuff too, because you said you would of maybe ended up like them and maybe it wouldn't of worked out the same way.

Ryan Eldridge: Yeah, we used to have 30 day return policy, so if you bought a router or back up kit from us, within 30 days we figured most people are going to return it if you don't want it or don't like it or it breaks. What happens on 37 days or 40 days, or a year later? Customers don't always want to think about when I bought that. I think I bought that a couple months, even if it's years ago, they might think it's a couple months ago. When they walk into Best Buy and feel like criminal and have to come up with a story, I mean, I don't know about you, but I don't necessarily practice in front of the mirror. I do play it out in my head, what if they say no? Well, I'm going to do this. And if they say no to this, I'm going to demand to speak to the manager? If the manager can't solve
my problem, I'm going to go to the district manager. *Inaudible frustrating noises* Why fight? If the customer is going to return something, that I sold for a $100 dollars, which I spent 50-60 dollars acquiring in the first, that customer which I would of purchased for 187.50, am I really letting them go for $50 dollars? I only made $160 on the first transaction, I'm going to get messed up all to heck if I turn customers away for $50. $50 is a small price to pay for a new customer.

There's a great story about Nordstorm's. It's kind of one of those myths, that they tell you your first day in training. It's about a little old guy who has a toaster under his arm and he marches up to the customer service section and sets the toaster down and says this toaster is horrible, it only toasts on one side, I'm really disappointed, I can't believe I bought it here, I can't believe you sell a inferior product *inaudible frustration noises*
And the customer service person says "Well I'm sorry to hear that sir. How much did you pay for this? Do you have your receipt?", and the man says "I don't have my receipt, I don't keep that stuff. I'm sorry you paid for this." He says I paid 12.71, and she counts out 12.71 and says I'm so sorry and says I'll call the manufacturer and we'll make sure that this toaster isn't available for the public in Nordstorms ever again, I'm so sorry. And the customer walked out, feeling good that he got taken care of. The funny thing about Nordstorms is that they never sold toasters, not a single one. The idea was 12.71 is a cheap way to earn a customer. Now, who knows if it's true?

Jaime Tardy: Yeah

Ryan Eldridge: That's about it

Jaime Tardy: That's hilarious. I hate to bring this up. When I was 16, they said accept this, whatever returns. Don't put up a fuss, do whatever. There was a used training bra, and I was like do I have to say yes to this? They were like, say yes, okay! I'll do that. And it didn't make any sense at all. And they were like okay perfect, and they were happy. You know how embarrassing would that had been if I had to fight over that with somebody. It's not fun from my side or theirs.

Ryan Eldridge: A lot of it comes from the employees too. The employees get into the defensive structure, where they want to defend the company. So if a customers going to take advantage of it, they start getting blustery and we tell them, why, why do that? We don't want you to do that. You're not defending us when you do that, you're actually hurting us when you say no. Just say yes to everything, that should be your default. If it's unreasonable, we call it getting a partner, we say that you can never get fired if you have a partner. If you say well I'm going to give this customer's money back, and then I'm going to hire another company to do the work for them, and then I'm going to send another technician out to redo their whole home theatre system, just to make them happy. If you're worried about someone saying wow! you just spent a lot of the company's money, all you have to do is
turn to the guy next to you and you say hey, is this is a good idea? and he says yes, let's do that! then you do it. There's no way you can get fired if you have a partner

Jaime Tardy: I like that. That's a really good idea. That's what people feel like that their decision isn't good enough or they don't know. So having someone else you can't get fired. Good! Then they go, ask and they'll know either way. Okay, so..

Ryan Eldridge: It was Adam's idea, it wasn't my idea

Jaime Tardy: Neither of us can get fired because we're partners, so it's fine. So tell me do you think every company should implement stuff like this? I know you worked in other retail and marketing and stuff. Do you think that other companies should implement this no problem?

Ryan Eldridge: I do! I think when I first started I had this great idea. About 20% of my customers, real rough

20% of my customers are going to take 80% of my time. Those customers are hard to satisfy or more demanding than the rest or have needs that maybe are going to take more resources than I wanna provide to them. I had this great idea. What if I created a little button on my database which is what we call the bad customer button. The customer that was too mean, racist, you know.. whatever, they were having a bad day and they said a bad word,
or whatever. I can click this little button and turn that customer away forever. What if I could do that? Wouldn't that be awesome?

Jaime Tardy: Mhm

Ryan Eldridge: If I I devoted all my time to the profitable customers, what we found out if we did this over time, we'd run out of customers. Because everybody's crazy at some point, you know their kids are yelling at them in the background, their husbands demanding, they have bills to pay, whatever. Their problem is that we sometimes, or are nearly the victim of their life, and we're their frustration at the moment and we get all of it. And that's okay. We tell everybody that the first job is to kill your ego. You're not here to defend equal rights
for people, you're not here to do all of that thing. If someone says something over the phone that you disagree with politically, disregard it because it's not something that it's going to be anything about computer repair. We had a customer call up, and every time she called up, one of our HR persons, she's our HR Director, she was a scheduler, every time she answered, she said thank you for calling Nerds on Call, this is Sirthong, the customer would hang up every time she picked up the phone. It happened seven times in a row.
 
Finally on the 8th call, thank you for calling Nerds on Call, this is Ann, how can I help you? And the customer started talking. We can't punish a customer because of their whatever reason, you know? Was she racist, maybe she couldn't understand? We could have gotten all blustery, ahhh I'm not going to deal with you, bad customer, bad customer. We said fine, if you want to be that way.

Jaime Tardy: Call me Ann!

Ryan Eldridge: You still have a bad computer and I can fix it for you. Call me Ann, call me Susie, I'm fine with that too

Jaime Tardy: I love that!

Ryan Eldridge: I think every company could benefit from that. Look at Costco, if you buy a pair of pants from

Costco, and you're tilling a field. That's what people do when they shop at Costco, if you're out there tilling a

field, and you're oxen Bessie tears your pants, you know you can walk back into Costco, and say Hey! These pants can't hold up to my wear and tear, they don't question it. They give you your money right back. How cool is that? When you walk into that store, you never question whether you should spend 1500 dollars on the outdoor heater lamp thing that looks like Mickey Mouse? Absolutely, you should buy that! Because you know they're going to take care of you. If I stand in another retail store, and you're thinking should I take the risk and buy this product or item, I'm not sure I want, you're going to question, well what's their return policy? Ahh.. It's going to be a pain to return, and they loose sales because of it.

Jaime Tardy: Ahhh.

Ryan Eldridge: We always think that we want our customers to think regardless, use us. If you have to return it, fine no big deal.

Jaime Tardy: See, I'm from Maine. L. Bean is local. I'm not sure you know about L Bean, that's what their store was founded on. You can return it no matter what. People love that. It creates loyalty, which is so valuable in terms of dollars, which is amazing
 
Ryan Eldridge: I think a lot of companies get caught up in the idea that someone is going to take advantage of them and scam the company and get something for free. There's such a small minority that would do that, and they're going to do. I guarantee we have people who do it, that's okay! That small minority is nothing compared to the profits you'll make on the ones that are coming back over and over again. You never question them or make them feel like a criminal because they're trying to return something or they have a complaint, or they think you've done something wrong. Better to own the problem then move forward. Think about it this way,
if I installed a 30 day policy on router returns. You can only return a router after 30 days, and you're 40 days out. I punish you if I say you can only do it the 30 days. I punish you merely because of the one guy that might someday buy a router and return a year later, that.. it doesn't make a lot of sense to me.

Jaime Tardy: Yeah

Ryan Eldridge: Why punish the majority for the minority?

Jaime Tardy: Ahh, I love this! This is really great! I know we don't have too much time, unfortunately.. I mean this is just one small piece. I had a list of other questions we didn't get too. So to wrap up, I always ask the small question. What's one action that listens can take this week to help move them forward to their goal of a million?

Ryan Eldridge: Make a list. The reason I say that is when I used to run retail stores, I was a district manager and was running 4 stores at the time, and I was 21 at the time. And I didn't really have a very organized thought process. A lot of energy, but a lot of trouble organizing. And so, my boss had come in and seen the back room
was in shambles and my inventory was all out of whack, and you know.. Who knows how the money looks in the drawer. He had a thing where he wanted the money to line up perfectly, look the same. Everything was in chaos, but my sales were skyrocketing. Listen, the problem is that you're losing money because you're not organized.
You don't know where your money is. You could be spending hundreds and hundreds of dollars on inventory management, you don't even know because you can't figure out where your inventory is. He said you need to sit down and make a list and figure out what's going to affect you the most today. Item A on your list should be what's going to make you the most money, Item B. should be the next thing that's going to make you the most money, and so on. He sat down and said make this list. I said, problem is, his name was Dennis, Dennis.. I'm too busy to make a list, I'm busy to make sales. He said if you don't have time to make a list, you've already lost. It doesn't matter how many sales you make if you're losing money out the back room. I said Oh! That makes a lot of sense. So now, I'm a store at making lists. I'm constantly making lists. I use my phone, my iPad, the back of my hand. The list is what's going to keep you moving forward. How many times a day do you go, Shoot.. I need to do! And then you forget it, and then you lose it and chaos ensues. Always make a list, always do the number one priority of what will make you the most money then, and then move down the list then

Jaime Tardy: All I love that, thank you so much Ryan. I really, really appreciate it. Where can we find more? Everyone needs to check out your website, so we can find you.

Ryan Eldridge: Yeah! Go to CallNerds.com, you can find out all kinds of stuff about our company. Our history is done in comic book style, so you can read all our cool stuff. We have a callnerds.com blog, we give away free tech tips, how to do things, a chat box to chat directly with a nerd. We say questions are free, so we have a lot of people who chat with us about different things and we edited someone's term paper, merely because we're nerds and why wouldn't we be good at terms paper for goodness sake?

Jaime Tardy: Now you're going to have a thousand people coming to you to edit their term paper

Ryan Eldridge: We'd rather have a customer come to us, and ask what's the best route or product. We'll do the research for them, because we figure out if we're the place they come too. They'll come to us with a problem, we can charge money for.

Ryan Eldridge: Yeah, we haven't even gotten into some of the new stuff we're doing. The retail stores, you know Google the other day announced we're opening up our own retail stores and Apple did, and everyone's excited. And it seems like these old time web companies are like brick and mortar are the future, it's kind of funny. Well we're saying we've had brick and mortar and we're doing okay with those. We're expanding constantly. We're one of the fastest companies expanding in the company according to 	what we decided was lets bring computer repair to the web! A lot of places are already doing it, but we were the first. We started in 2007 when we noticed things were going weird when we started investing in customers. We started a thing called an online service plan, for $20 dollars a month a customer can get unlimited tech support for anything. We figured out, here's the math for it. Average customers come in and have 1.3 appointments a year, over the course of 5 years, they're going to spend a little over 1,000 dollars like 1,0041 over the course of 5 years. That's a lot of money to spend on computer repair. Most of the time they live with annoyances all along, their computer is catastrophically dead. In the meantime, they put up errors here and there, can't get their email up, they ask their buddy or IT guy at work. What we said was we set up this online service plan for $20 a month, so now they don't have this catastrophic bills when their computer's dead. They can get tutoring on Photoshop, that Excel spreadsheet, or that term paper that needs to be edited. We now have 4000 customers who take on our $20 a month service plan. That's where all of our growth is. I usually live in Redding, California but I'm in Sacramento setting up our new call center with 30 people who are going to be online fixing computers all day.

Jaime Tardy: I was going to ask you where you're located, but it doesn't matter anymore. Even if in the middle of nowhere in Maine, I live in a town of 2000 people, you could help me too!

Ryan Eldridge: That's the idea. We're building up our West Coast stores so we're really getting that reputation as customers come in, we sell them the online service plan so they can get off the old way and on the new way. As we expand, we're going to be able to provide this service to anyone in the nation. We have people who find us on the internet, we have people in Texas, and Baltimore, apart of our customer base, because they got ahold of one of our nerds on the phone and fell in love, and they're our customer for life.

Jaime Tardy: And they fell in love.

Ryan Eldridge:

Jaime Tardy: You help people fall in love with you. Thank you so much for coming on Ryan! I will have you back on at some point, so I can ask you more questions.

Ryan Eldridge: But, we're multi-faceted!
 
Jaime Tardy: Beautiful! We'll have you on a lot, so you can fix my computer! Thank you so much, I really appreciate it. Have a great day!

Ryan Eldridge: You too!

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Hi I’m Jaime. Each and every week I bring you the top business advice from the people who know best.

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