In Loving Memory of Igor Pelse
June 11, 1950-March 19, 2016
I thought the call was work-related. I only wish it had been… Read More
Writing this blog turned out to be much easier than I thought!
Everyone who reads this blog is surely aware of the challenges that the Specialty AV industry has faced these past few years. What’s interesting is how various companies have responded to those challenges. Let’s face it: business still sucks. Still, as any good psychotherapist will tell you it’s all about how we deal with crisis that’s important. And when it comes to HiFi, many vendors are dealing with crisis very poorly.
What do I mean? Many brands which were, until recently, sacrosanct, are now available everywhere. Just check out the “Dealers” webpage of once-hallowed manufacturers and you’ll find a bunch of cut-rate, “Home Base” dealers masquerading as real showrooms but with no facilities, staff or overhead. Many vendors are now selling online, sometimes by discounters and sometimes by the manufacturers themselves, who add a shopping cart to their website whenever they need capital. The result is that customers can usually find a better price and dealers no longer know which vendors to trust.
The surest way to know if a manufacturer is desperate is when they start selling online. (I’m not talking about $200 speakers or $300 integrated amps whose economies of scale dictate the sort of broad-based distribution which only the internet can accommodate: I’m talking about components well into the four- or five-figure price range which require demonstration and dealer support.) Don’t get me wrong: I’m not taking a “Shot” at internet-friendly manufacturers…the problem is that there are many companies who, for years, differentiated themselves by criticizing their competitors for selling online while purporting to hold themselves to a higher standard. That’s obviously a luxury they can no longer afford: hypocrisy is much more economical.
No less an authority than Stereo Exchange’s David Wasserman, “The Oracle of Houston Street” and one of the most vocal and articulate protectors of the brick-and-mortar faith, has told me: “I’m resigned to the fact that many of my vendors will sell online and there’s nothing I can do about it.” I disagree. Internet sales and indiscriminate distribution are indeed killing brick-and-mortars, and yet the very dealers whose futures are threatened continue to support companies that sell online…often at the expense of brands with carefully controlled distribution. In this, they’re effectively undermining the entire brick-and-mortar dealer network and are, in fact, expediting their own extinction. It’s as if they’re writing their own epitaph and embracing the outcome as if it were inevitable. It isn’t.
The online customer simply “Picks and Click,” i.e., chooses a product, Googles the lowest price and clicks “Buy It Now.” So, an online dealer needs nothing but a website and the ability to offer lower prices. A Brick-and-Mortar dealer, by contrast, has display models, demonstration facilities and (hopefully) expert salespeople who can guide the customer into a product that’s best suited to his/her needs. The irony here is that, by supporting vendors who encourage internet selling, dealers are actually ignoring their inherent advantages and discarding all those benefits for which they pay rent, salaries and purchase showroom demos.
The problem, then, is that dealers are quick to complain about internet selling yet continue to support those vendors that sell online. The solution should be equally obvious: champion brands which are committed to demonstration-focused, brick-and-mortar retailers. The quickest and surest way to curb internet sales is for brick-and-mortars to deemphasize those brands that sell online. Years ago, when a highly regarded speaker brand planned to sell to a regional discount chain, nine of the top NY Metro dealers banded together and convinced the speaker company to commit to their specialist distribution. That event demonstrates the power that quality dealers can exert upon a manufacturer. At the end of the day, vendors of expensive gear understand that, without a place to see, hear, taste and touch the components they build, sales will suffer. It’s all about valuing what we offer our vendors…and what we offer our customers.
At Specialty Sound and Vision, we’ve chosen brands that forego internet sales in favor of brick-and-mortar dealers who sell by demonstration and expertise. As a result, our dealers rarely, if ever, have pricing issues and the customers who experience our products usually buy from the dealers that demonstrated them in the first place.
Extinction is not a forgone conclusion: through a combination of merchandising, combined purchasing power and a bit of diplomacy, the Independent Specialists’ most profitable days might yet be ahead of us. There is a choice!
…or, how those Loveable Leon Lads redefined Custom Installation!
2000 was a memorable year for me. I got married, bought my house, adopted five dogs and broke $1 million in sales with my biggest client at the time, Audiophile Systems. 15 years later I’m divorced, couldn’t care less about the house, all but one of the dogs have passed away and Audiophile Systems is dead as Quadraphonic. Fortunately, 2000 was also the year that my dear friend, PAC’s Ralph Tarnofsky, suggested I get involved with Leon…strictly platonic, of course. When Ralphy explained that Leon was a new speaker company looking for a rep, I thought “Oy, Vey! Just what I need…I’m already drowning in speaker brands!”
Leon was different: a line of box loudspeakers which hung on the wall flanking a plasma, in custom sizes and finishes designed to complement the television. Fifteen years ago, this concept was radically different from what everyone else was doing. And it made sense. When plasmas were selling at prices exceeding $15,000, customers weren’t buying a television so much as they were reclaiming the real estate occupied by a bulky CRT and stand. Moving the speakers off the floor seemed the next logical step.
Of course, Leon wasn’t the only company that had this idea–though they might have been the first—but, in my 35 years in CE, they were the only company that listened to its dealers and developed products based upon the suggestions of their customers. Surprisingly, it was Andy Singer—about as far from an integrator as one could imagine—who gave Leon the idea of matching their speakers to plasmas. Originally, the company was making wood-veneered, on-wall speakers whose grilles were silk-screened with artwork. They brought a pair of these for Sound by Singer to evaluate. Andy wasn’t interested but told the lads “If you can make a pair of speakers to match this Pioneer Elite Plasma, I’ll buy them.” They did. And he did. Leon lived by that lesson ever since.
In an industry that often develops products in a vacuum and then tries foist them upon dealers and customers, Leon has differentiated itself by mining its customer base for new product ideas. Not so long after they started building custom left-and right-channel Plasma speakers, they developed “Horizon,” the first custom LCR Soundbar, again due to dealer feedback. Back then, Leon salespeople routinely traveled with their tiny rep force and we fielded requests for superior mounting systems, which led to a series of proprietary—and revolutionary—mounting brackets. As the company grew, Founder Noah Kaplan has demonstrated his creativity with a series of new products, some of which (“Trithon,” for example) were strictly concepts or design studies but many of these have captured the imagination of the entire industry. (The Tonecase TcFIT, for example, has become the fastest-selling new product in company history!)
Much as I hate to say it, the secret of Leon’s success is no secret at all: they succeed because they listen! Companies who don’t understand the need to communicate with their customers—dealers and end-users alike—and ask what products they’d like to see are setting themselves up to fail. They’re also assuming a tremendous and totally unnecessary risk. We have one vendor who built an entire line of product without ever consulting their reps, dealers or customers until the product shipped. The resulting launch was a total disaster. A few phone calls and e-mails could have completely avoided this debacle.
Fifteen years after I first met Leon, they’ve become our Number One vendor…by a considerable margin. The company that started with a single, on-wall speaker has morphed into the industry’s largest manufacturer of bespoke loudspeakers and a perennial guest on Forbes’ list of “Fastest Growing US Companies.”
The next time your customer asks for something, give his suggestion some serious thought…you could wind up becoming the next Leon!
Ten Tips for growing your business during the slow Summer months
Memorial Day is behind us and Summer has (unofficially) begun!
Ahhh…sweet, sunny days at the beach, hiking through cool, green mountains, BBQ Sundays and…crummy sales? Everyone reading this knows that Summer, from a sales standpoint, is the year’s toughest season. Problem is, many dealers use this fact as an excuse to hit the shore or the links and abdicate the management of their businesses until Labor Day. And that’s a mistake.
Just because sales slow down doesn’t mean there’s nothing to do, Summer is the perfect time to plan marketing, merchandising, staffing requirements, training, etc for the Selling Season.
If any of you are friendly with farmers, think about the way they spend their “Off Season.” Come Winter, when the ground is frozen solid and there’s nothing to grow or harvest, smart farmers repair their equipment, grow seedlings, maintain buildings and basically prepare for planting season while catching up on all the things they neglected during the busy months. If they can do it, you can, too!
So, here are ten things you can do to boost your business:
1-Work The Phones (…and e-mails)! When your “Regulars” aren’t walking in the door, give them a gentle nudge. Every time a new or updated product becomes available, there should be a list of old customers who need to know about these items. One of our dealers told me they consider it “Rude” to call customers. Really? Your competitors don’t! You’re performing a valuable service by keeping your customers informed. They’ll appreciate it!
2-Shop for “Specials” Business is lean for manufacturers, too. Many of them offer Summer Savings while others simply need you to prod them. Ask your vendors for B-stock lists, overstocks, discontinued items. Many companies will give you lists of closeouts without the need to buy anything. “Make them an offer they can’t refuse” and remember, Cash is King!
3-Market, market, market! Now’s the time to create a year’s worth of promotional materials, e-mail blasts, advertizing strategy, start a “Constant Contact” campaign, etc. Have a “Facebook” page? If not, build one. If you do, boost your views by publicizing new products, events, employees, even vacation photos. Ask your staff to contribute!
4-Step outside! Still plenty of time to demo, spec and install Outdoor Speakers, TVs, etc. Many of or brick-and-mortars have a pair of weatherproof speaker playing outside the entrance to their stores…good idea!
5-Higher Education: Your clients’ kids are off to college in September. Do they have a Dorm room system? A pair of Dynaudio Xeo and a Sonos Connect offers incredible performance and takes up less space than a “Boom Box”! How ‘bout a USB DAC and a pair of headphones? Kids love music and parents love their kids: sell them something!
6-Event Planning: Summer might be the worst time to host events but it’s the best time to PLAN them! Your vendors are planning their autumn itineraries and most of them will probably be passing through New York. As with advertising, you need to plan several events, not just one! 4-6 events between Labor Day and next Memorial Day
7-Train your team! NOW is the time to encourage Rep and Manufacturer visits. As a Rep Principal, Summer is our busiest season for vendor visits. Your sales team should be knowledgeable experts and your vendors are willing and able to train them while we all have time to spare!
8-Write Job Descriptions: It’s amazing how few dealers actually create written, formalized Job Descriptions for their employees. A particularly useful exercise is to develop Task inventories for key positions and then ask the employees to list the things they do on a daily basis. You might be shocked at the discrepancies between their perceptions and yours
9-Tweak Your Merchandising! Time to consider an Auro 3D demo? Increase your commitment to Turntables, DACs and headphones? Any lines that are underperforming? This is the time to revamp your showroom and line list.
10-Interview Publicists: We know several dealers who’ve hired publicists and have, as a result, received great editorial coverage in major publications. I strongly suggest speaking with a few publicists and exploring what they can do for your business and how much it will cost. (Probably a lot less than ineffective Print Ad campaigns!) I’ve got suggestions, if you’re interested…