It had been only a couple of weeks since Priya Desai, 35, project manager at a leading tech company had moved from Mumbai to New Delhi. Her in-laws had just arrived to check out her new home and city. As if playing the dutiful daughter-in-law wasn’t stressful enough, her washing machine chose to break down.
To her horror, she discovered the warranty on the damn thing had expired, too. The local repair guy promised to visit the Desai household over the next two hours — but he was yet to fix the machine two days later. As the pile of dirty laundry rose, so did Priya’s blood pressure. It didn’t help at all that a very important client presentation was coming up during the week. The timing couldn’t have been worse and it seemed there was no easy solution in sight.
Priya Desai could be any one of us. The local repairman, don’t we know, inspires worry and frustration in equal measure — even if he does show up on time, there’s no way to tell if his spare parts are genuine or their price right. Bangalore-based Jeeves Consumer Services plans to solve all those problems with its one-stop annual maintenance contracts (AMCs), Jeeves Home Care. Once enrolled, the Jeeves Home Care consumer only has to call one number (instead of several) to service household appliances, irrespective of the product or the brand.
“Our premise is that, today, an average household has 12-15 different electronic products,” says Alok Sen, who co-founded Jeeves with RN Balasubramanya, his colleague since 1994 from their erstwhile days at BPL Sanyo. “You could have bought them in different cities from different dealers, which means that when you want something fixed, you have to co-ordinate with several people for various products, which can be exasperating at times.” A mid-May pilot carried out by Jeeves for its Home Care offering in Bangalore has already fetched it 500 customers; the all-India launch is slated for August 2012.
Jeeves took off in August 2007 as the testing centre for the Future Group, which wanted to launch small electrical appliances as store brands. “Almost all of them were imported from China and the Chinese typically don’t have service support for their products,” says Sen. “We started by testing the appliances and suggesting changes, so they would suit Indian conditions.”
As it went off well, the large format retailer asked them to set up a network where Jeeves would serve as the Future Group’s after-sales support, both during and beyond the warranty period. Soon enough, Sen and Balasubramanya realised they could replicate what they had done for the Future Group with other retailers and consumer electronics companies.
It was sound logic. Over the next five years, Jeeves’ client list expanded to include all major retailers, including Croma, Metro Cash and Carry, and Aditya Birla Retail. The company also delivers after sales tech support to the buyers of several multinational brands such as Toshiba, Sanyo, Electrolux, Kenwood and General Electric. Jeeves is currently present in 222 cities across the country; it has its own offices in 17 cities and operates via franchisees in the rest. Jeeves buys spares from companies and supplies them to its franchisees — there’s usually a revenue sharing agreement of around 10-15%, depending on the volumes.
As it turned out, the direct-to-consumer segment proved to be a nearly inevitable next step. “When we went to the homes of customers for product installations or service on behalf of our clients, they kept asking if we offered an AMC that would cover their appliances,” says Sen. “We realised there’s a huge market where consumers want the convenience of calling one number to solve all their repair problems.”
The new Jeeves’ Home Care AMC does preventive maintenance of appliances every six months or quarter, depending on the package chosen. The average package covering all major appliances costs around 3,000, whereas a one-time visit is charged 300 excluding spares. A 90-day after service warranty promises to fix problems that recur within that window at no extra cost. “We provide a national warranty,” says Balasubramanya. “So, if you have your laptop repaired in Chennai, and then you travel to Delhi and end up having a problem there, we will sort it in Delhi itself. If you get transferred, your coverage extends to the new city.”
The partners diluted a minority stake in the company to fund the direct-to-consumer business; the money was raised from Seedfund an early-stage venture capital fund. “In India, our DNA doesn’t let us throw out our appliances and buy a new one every 2-3 years, whenever there is a slightest problem,” says Bharti Jacob, partner, Seedfund. “Our holding period is longer and we want our asset to work longer for us. Given the highly fragmented after sales services market, it makes tremendous sense to invest in Jeeves because it solves a major pain point for consumers.”
The funding is going towards creating the technology backbone for customer management. “The backend has to be strong,” says Balasubramanya. “A lot of cash will be coming into our system so our processes have to be perfect and streamlined.”
Another key challenge is inventory management. Balasubramanya says, “We not only need to stock the right quantity of spares but also ensure there is no obsolescence, otherwise we will lose money on outdated inventory.” Obsolete experience could become another problem — Jeeves’ technicians will have to stay ahead and keep up with the latest product upgrades and launches. Jeeves currently has 260 technicians employed on its rolls and intends to take the headcount to over 400 by the end of FY13.
Jeeves hopes to clock revenues of around 20 crore in FY13. It has set itself an ambitious target of 100 crore over the next five years, with the consumer business contributing about 50%. But is the 100 crore revenue target realistic? Sen believes it is. He pegs the electronic after services market in India at around 2,500-3,000 crore. As there is no pan-India player, Sen and Balasubramanya believe the first mover advantage will work in their favour.
The company has serviced over 850,000 customers over the last five years and hopes to tap into that database to build its consumer business. To its credit, Jeeves cannot be strictly compared with any existing player. Somebody like a One Call India helps customers find technicians but doesn’t repair or offer guarantees on the services provided, whereas tech support companies like Etechies and iYogi are more focused on the IT segment.
While Jeeves definitely solves a major source of trouble for consumers, execution holds the key — it’s the customer experience that finally makes a successful service brand. “Scaling up is a challenge when you are transforming your business model from an enterprise-led to a consumer-facing one,” says Seedfund’s Jacob. “But given the experience of Jeeves’ promoters, they should handle the transition well.” If you ask Priya Desai, they just have to be ready when a washing machine breaks down at the wrong time.