High End Finds a New Way to Drive Away Customers

Exactly.

 

So let me add a different perspective here - industrial.

First let me say that I spent 3 years doing tire kicking in NYC back in the late 90's before I bought my system. You can look at my profile and decide for yourself if I was just wasting the dealer's time or if I ended up spending real money.

In my working days I was for about 3 to 4 years an account manager for industrial accounts. The scale of the money involved is so different than what we have here that you could never screw up, it was just too costly to do so. We had a $10M cutoff point, if the sizing of the opportunity indicated that it was not at least $10M we passed on it because it would take to much of our time from the team and spread us too thin. Now having said that let me tell you what our golden rules were:

1. When you are in business to sell something you are not doing the customer a favor by offering to sell it to him, he is doing you a favor by showing any interest in your product.

2. You never offend anyone no matter how small their interest may be. Today's tire kicker may be your biggest customer tomorrow. This does not mean you have to spend all day with each and every possible customer, but you never offend them.

3. When we explained to someone that what they wanted did not fit well with what we had to offer we always tried to recommend to them a supplier that could give them what they wanted.

I realize that a small AV designer / installer business that may not even do $10M a year in revenue cannot afford to train its staff the way a large corporation can, but that clown at that salon could have simply explain that their business is designing and installing home theater systems and not selling individual pieces of gear, recommended a few places in NYC were you could buy an SACD player, given you a card and told you that if you ever find yourself looking for someone to design and install a complete AV system that they would appreciate if you came back and talked to them.

 

Good post Tony!

 

I understand a store owner's need to avoid wasting time with tire kickers. But if the store was empty as the OP said I see no reason why they couldn't spend a few minutes with him.

 

THIS!!!!!!

 

Beautifully stated -- and bang on.

Had this particular audio shop held those values, Sneaky Pete would likely have had a very positive experience (even if he didn't audition any gear) and would likely have stored away the memory of this helpful, friendly sales guy at this shop that does HT installs.

This in turn could have led to actual business for these guys. If a friend consults Pete tomorrow on where he should go to get a home theater, where do you think he's going to send him? You know that It's NOT going to be the shop that just insulted him.

 

Yes, nice post Tony. That are a lot of interesting points to consider in this thread.

 

From a personal perspective, I generally will only visit a store (with the exception of used record stores) when I'm looking to buy something.

There is nothing wrong with visiting a store 2 or 3 times especially if you are making an expensive purchase. However there are people who pretty much put stores on their monthly "must visit" list and may make a purchase of substance once a year if the store is lucky, of course they then will then want a discount. Even as a teenager when I first became fascinated with audio I new better than to make a pain of an a** of myself without buying something. Respect works both ways I respect the owner of the business who is there to earn a living and not for my entertainment on a Saturday afternoon.

 

One thing I have learned about marketing in 2012 (I do marketing analytics for a day job) is that news, good or bad, travels faster every year and reaches more people.

What if Sneaky Pete posts something on LinkedIn or Facebook? It could impact another sale at this AV salon. Big companies are experimenting with all sorts of techniques to engage with and keep customers from loyalty strategies to more efficient customer "acquisition." All of this also applies in some scale to small high end audio businesses too.

One of the projects my firm does is called "media mix optimization" which analyzes what channels (TV, email, digital, print, etc.) gets the most response. In leading several of these projects I have learned that digital channels are very connected to the eventual sale. There is lots of empirical evidence that people ask their friends for advice before a big sale. All of this suggests you never want to disappoint someone. And it also suggests that building that customer relationship is important.

Say Pete wants an SACD player. Maybe he calls up MusicDirect and orders an Oppo 95 now. AV Salon just lost a sale. Pete gets treated right by MusicDirect. He tells his friends. His friends buy from MusicDirect. AV Salon loses four sales. One of Pete's friend recounts Pete's story on the web. One of his friends looking to buy a home theater package worth $80K gets cold feet from reading about Pete's and buys from a competitor. An exaggeration perhaps but we see this all the time in retail industries my firm works in.

 

I love the way people keep making statements like this. They have been in business in one of the most expensive neighborhoods in the world for 43 years. I think they have proven their business model.

 

Exactly.

I've got a little experience working in high end and low end retail. The same rules don't always apply between the two.

 

Funny.

 

Despite the lousy reviews that comes up for them via Google, that's very true, isn't it? Judging from their website, they don't really look like a retailer selling individual items, so much as a solution provider.

From what I understand, a lot of hifi retailers went in this direction to take advantage of the housing boom, and the ability to wrap these expenses into mortgages. I would imagine the most successful at that strategy are generally staying true to that plan and not really doing retail, so much as providing a showcase for their work, whether the money comes via mortgages or not. On the upper east side, there are enough wealthy people looking for all in one solutions that they might not sell individual items to people who walk in off the street.

Honestly, looking at the exchange between the OP and the salesman, I wouldn't even say the salesman is being a jerk, so much as apprising the OP of the reality of their business.

I know this is a poor analogy, but you might get a similar response if you called IBM and asked them about service for your old Thinkpad. Since selling that business to Lenovo, it's not really their line anymore.

 

You must not have read my post. They've been doing things this way for at leas 16 years, and they have been in business for 43. I suspect they'll last more than five more years.

 

Wow

Well, it's no different than the airlines charging you a fee to pay a fee on line, I guess. Or a bank charging you a fee to gain access to your own damn money.
You should charge them a fee for choosing their store. $50.00 sounds 'bout right.

 

Of course not. They wanted a fee to listen to $300 speakers. They clearly were not in the business of serving people like me. Apparently they had been, but they were (and are) no longer.

 

I don't think this was the original business plan because I bought from them once in years past. I agree the business model can work, I disagree that it can work if they don't learn better communication skills. I think Tony and Lee are correct on this one.

I'm not sure why the guy opened with "we are not a store" and "you'll have to pay a consulting fee" before he found out anything about me. As I said before I was wearing business attire and there was not a soul in the store. I could have been shopping for a complete Home Theatre set up. Besides if you can make a quick sale and profit but it is not worth your attention that is not good business.

I hate to buy from the B&H Photo type store that turns everything inot a commodity. I actually will pay extra for some customer service.

My Family owned a Toyota and Volvo dealership, we made more money off of a brand new top of the line Volvo than a Ford Escort trade-in but we sold both with a smile.

 

It's a lot different. AV Salon doesn't want audiophile customers. They don't want to waste their time. They don't want tire kickers or even paying customers getting in the way when their real clients, interior decorators, come in. They don't make their money on markup on a few boxes. They make it on what they charge for installation.

And the key to their business, I'm sure, is how well they service those decorators, or the rich people who use them. Those clients need full attention and instant responses. And it's not worth jeopardizing those clients for a few guys who buy a $5k amp once in a while, much less some doofus who wants to hear a $1000 SACD player and probably won't buy it.

Finally, it would actually make perfect sense for audio dealers to charge for their service, and discount the boxes they sell. Full service dealers try to charge for their service, essentially, by charging list when others discount, but this way would actually be more fair to everyone. And customers could then decide whether the quality of demonstration was worth the fee.

 

Also, god forbid an opinionated and/or knowledgeable audiophile be in the store and queer a sales pitch.

 

This is exactly my take on it. I don't want to put someone out when I have no intention of buying anything. I think the OP should have said, he was interested in buying a SACD player and asked what the store carried. I bet he would have got a different response.

 

Funny you use Eastsiders to denote wealth. Here in Los Angeles "Eastsiders" means "from the barrios just east of Downtown LA"
http://www.angelfire.com/ca5/ganglandexpress/page3.html
Precisely NOT the type to go to a distinguished establishment such as this thread is referring to.

 

After reading some of the posts defending the business model and longevity of this business, I went back and re-read the original post. If you think what the OP described is cool, you’ve got crucial parts missing. There’s nothing wrong with being a carriage-trade retailer specializing in complete systems and custom installation. What’s wrong — both in terms of business acumen and simple human decency — is failing to explain your business model in a polite, friendly, and respectful way.

That’s why this is the most popular and memorable shopping scene in movie history:

 

To chime in, I just had a very pleasing experience at In Living Stereo in NYC. Really friendly and accommodating. I would definitely do business with them again. They also have a record shop that makes it more inviting to go into the store vs. the stores that have to "buzz" you in.

 

This is fine.

But why on earth are they running a storefront, with published hours of service that only mentions appointments on Sunday? If their business model is as you describe, shouldn't they communicate that just a little bit more clearly instead of running the risk of getting a bunch of bad publicity (like they are here)?

Maybe they don't mind having their name dragged through the mud, and maybe it just doesn't matter since they've been in business forever. But I can't imagine an interaction like this (and the resulting publicity) being helpful.