By Lisa Johnston
New products on display at the American International Toy Fair, held in N
The Professional Audio Video Retailers Association (PARA) mixed somber, survival-strategy seminars with pep talks during its 24th annual conference.
About 400 A/V retailers, custom installers and their suppliers got advice from management consultants and marketing executives, shared successful strategies for coping in the current business climate, and got a glimpse of their long-term future as installers and managers of digital hubs that distribute audio, video and data throughout the house.
They also got some cheering up from outgoing PARA president Charlie Bock. Specialists, particularly those with the motivation to attend the conference, "will survive the current conditions extremely well," he said during a general session, because they have "a real passion for what they do." That passion "makes us better salesmen, installers and managers."
"It's an easy time right now to stay home," he continued, but dealers who attended the event "have a determination and desire to make their businesses better."
In light of the economic uncertainty, PARA executive director Deborah Smith described attendance, though down about 15 percent, as a "glass just about full given everything that happened."
"Everyone's struggling to some degree — manufacturers and retailers," Smith said. During tight times, "cutting back is absolutely necessary," but she warned that "retrenchment can buy you time but can't build you a future." In urging dealers to remember the basics, she pointed out that "as custom grew, a lot of dealers forgot the retail strategies that were successful all those years [before]."
Some dealers, for example, have resurrected wine-and-cheese nights for past customers to mine their built-up good will, consultant Robert Macfarlane said during one seminar.
Dealers also spoke up on their own to share strategies that they've adopted to get through slow times. One dealer, for example, said he turned to the pro market to boost custom revenues at a time when tract builders are cutting back on pre-wiring homes.
Another dealer, Vance Pflanz of Pflanz Electronics in Sioux City, said he added furniture, lighting and lighting controls to tempt additional dollars from customers in a geographic market whose population isn't growing. A single $1,000 lighting system packs a margin equivalent to that of 10 DVD players, he said. The furniture and lighting displays, he added, "excite the female buyer" and "makes it so customers want that room in their home."
John Banks of Montreal's Audio Centre responded to the economy's challenges by making cuts in advance, rather than after the fact, and by installing business software that tracks the margins of products sold by individual salespeople. For each salesperson's monthly sales, the software reports margins by category, brand and individual model. The software program, coupled with positive reinforcement and negotiation training for the staff, improved store margins by 2 percent "almost right away," Banks said.
PARA's Bock, owner of Stereo Barn in Wyomissing, Pa., said he turned a "potentially disastrous year" into a "pretty decent one," thanks to the fourth-quarter mailing of a customized catalog prepared under a PARA program. It "energized the sales staff" and generated an immediate response when mailed, he said. Stereo Barn also distributed the catalog with a buying incentive to the employees of Stereo Barn's bank, law firm and other vendors.
Audio Advisors of West Palm Beach expanded its market through a new marketing strategy, said Eric Bergstedt, system design and engineering director. The strategy has offset a lull in mid-end jobs priced between $75,000-$250,000, which were often contracted by people "who live off their [stock-market] investments," he said. He attributed an increasing number of less-than-$50,000 jobs to a year-old Fast Track program in which one person sells and engineers a system and stages inventory for the project. These systems "would previously fall through the cracks," he said. It also doesn't tie up the project management and system-design staffs that are working on larger projects, he noted.
The pace of high-end installations costing at least $250,000 remains robust, he said, pointing to his market's affluent demographics.
Another installer supplemented his retrofit-focused business by reaching out to architects and prime builders to tap the new-home market. Builders' names can be culled from a town's database of building permits.
Consultant Macfarlane also advised installers to conduct job-cost reviews after every installation to compare bid vs. actual cost and to determine why projects cost more than expected.
Also to prevent actual costs from exceeding bid costs, Lyn Perry of Wilshire Home Entertainment in Thousand Oaks, Calif., gives retail salespeople full commissions and spifs on products sold by the custom installation division if the salesperson referred the customer to the division. The program reduces the chance that salespeople will sell the wrong products into rooms that they haven't seen, he said.
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