Hatfield, Pa.104 E. Vine St.
Hatfield, PA 19440
Bob Cole, president/founder
Product mix: High-end A/V; mobile electronics; custom home/car installation; whole house integration
— A now legendary series of wacky and risqué radio spots helped make Bob & Ron's World Wide Stereo as much a local fixture for Philadelphia area residents as cheese steaks and the Liberty Bell.
But it's the warmth and enthusiasm of its sales staff, the wide selection of premium A/V products, and the quality of its custom installation work that has made this 27-year-old, two-store independent a favorite with home theater aficionados.
Founded by former psychologist and self-professed “old hippie” Bob Cole, the company fosters a warm and fuzzy family feel thanks to its career employees and cozy showrooms where lounging is encouraged.
“We're the 'Cheers' of A/V retailing,” Cole said. “Our sales guys build relationships with customers, and customers are always there hanging out.”
The allure is part product — including Runco and Hitachi plasma displays and Integra, Klipsch, SpeakerCraft and Totem audio — and part personal. “We want to make everyone who walks through the door happy,” Cole explains. “Our mission statement is to do well by doing good. Be good to one another and the customer. And excite them over the joy that our products bring.”
Cole's management philosophy stems from his days as executive director of a community mental health center and a private practitioner. “I believe in firing guys up rather than firing them. We give people chances that others won't. And they return it with respect, loyalty and hard work.”
Indeed, World Wide Stereo boasts almost zero turnover, and still employs its very first salesperson (the eponymous Ron); its first installer; and a one-time teenage typist who now serves as comptroller.
Loyalty was also engendered by a no-layoff policy that held firm during the economic downturn in 2000 (“We sink or swim together,” Cole said), plus a rich commission structure that afforded staffers summer homes and boats.
Cole recently cut commissions in favor of a more profitable sliding scale compensation model that's based on upgrading the customer. “We've created more opportunities,” he explained. “They can make more money selling McIntosh than Denon, for example, and will make more money by the end of the year.”
The latest compensation plan is the third since Cole launched the company with a “Ralph Nader” profit-sharing concept that was inspired by his hippie ethos. “I never took a business course and just learned as I went, although the biggest mistake I made was not hiring a business guy when we started making money,” he concedes.
Success, however, came slowly. Cole, an audio hobbyist, founded the business “as a lark” in 1978 with $1,000 and “a lot of enthusiasm.”
“I had a pregnant wife and an $18,000 mortgage on a $17,000 house,” he mused. “Back then, custom install jobs were few and far between, and the proceeds went toward supporting the retail store. We just wanted to break even.”
Today, the $13 million business is posting significant gains in margins and profits, and is on track to do $15 million in 2006. Cole attributes his good fortune to “a good team, buying smarter and better, dealing fairly with vendors,” and remaining true to his original business model, which places equal emphasis on the custom and retail sides of the business.
“Other dealers put custom ahead of retail, but I feel very strongly about retail,” he said. “One feeds the other.”
Yet the lines between the two are becoming increasingly blurred. “Retail is custom now,” he said. “Eighty percent of what we sell does not go out the front door. It's either custom installed or delivered and set up. That's the new retail.”
Cole currently maintains two showrooms and 60 employees, including 15 full-time installers who are booked five weeks in advance. Jobs range from simple $2,000 installations to $1 million whole house automation, fueled by a surfeit of vacation homes, retrofits by baby boomers and empty nesters, and new home construction. “There's more business than we can handle,” he notes.
Cole would like to expand the operation, and has the infrastructure in place to do so, but is constrained by the availability of quality installers. “We can't just hire wire monkeys, we need finished contractors,” he said.
When not minding the store, Cole also serves as president of Home Entertainment Source (HES), the 400-member A/V specialty wing of the $4 billion Brand Source buying group. HES provides a forum for sharing ideas and best practices, and access to financing plans, health and life insurance, and sharply priced product through the groups' Expert Warehouse program, Cole noted.
“Dealers don't feel so lonely anymore,” he said.