(NOTE: This section and the ones linked to it are excerpts from Gerard Rejskind's best-selling book, The World of High Fidelity, available from UHF Magazine at a special Internet price)
This is the part that should be obvious unless you've just stumbled into hi-fi after a failed career in retailing shoes or used cars. High fidelity is not a product that can be sold in a box. Indeed, it is not so much a product as an idea...some might say an ideal. This might not be apparent because hi-fi gear comes in the same cardboard boxes that mid-fi stuff is packed in. It is a good thing hi-fi is not just something in a box, however, because that is the only thing that allows an independent retailer to make a living from it. Otherwise you would be driven out of business by large national and international chains, some of which can actually sell equipment for less than your cost price! Fortunately the chains aren't too interested in taking your market away, because you don't have enough sales volume to keep them in Mercedes. That can change easily, however, and the only way you can be safe is to offer something the chains cannot.
And that is service. Audiophiles need it, and only you can provide it. If you know how.
So here's where I stick my neck out and tell you how to run your business.
(a) Face your real competition. Perhaps you think of your competitor as the other high end store across town. Actually your competition includes the department store that sells compact rack systems and video gear, the contractor who installs hot tubs and sun decks, the travel agency that advertises vacations in Tahiti, and of course the local BMW dealer. All of these are, like you, vying for discretionary dollars -- the money people can spend on things other than the strict necessities of life. Most people don't have hi-fi on their list of discretionary priorities. You can enlarge your clientele faster by pulling them in than by fighting for your share of the committed minority.
(b) Conversely, remember that you can go broke really fast by ignoring committed audiophiles.
(c) Play a little game with yourself. Put yourself in the place of a consumer who has had your store recommended to him (or her!) but has only a vague idea of what high fidelity might be. Walk into the store and try to imagine how many obstacles you'll have to get through before you get to hear a high fidelity system. Better yet, ask a friend not known to your staff to pose as a potential but inexperienced customer. Make it a female friend if you want to hear a real horror story. If your store passes this test, pat yourself on the back, but if not, you have work to do. You might have the same friend do the same test at a competitor's store. You may learn some surprising things. When you're out of town, drop into a local store that sells the same brands you do. Don't show your business card, pose as a customer.
(d) Do some counting. In the past week, how many people walked into your store without hearing hi-fi?1 Count everyone including the mailman. Multiply by the 52 weeks in the year, and now suppose that 3% of those people had bought, on average, a $2000 hi-fi system from you. Calculate how much that would have increased your profit the past year.
(e) Look over your stock. Examine each piece of equipment and imagine listening to music through it in your own home for the next six months. If the idea depresses you, ask yourself why anyone else should pay you for it.
(f) Look back. What brands was your store selling two years ago that it no longer sells? Why doesn't it? Or -- this is perhaps a better question -- why did it carry those brands in the first place? Try to find out what happened to the customers who bought those products from you. Try to figure out which of the brands in your store now won't be there in two years. Ask yourself what they're doing in your store, and what will happen to the customer you sell the stuff to tomorrow.
(g) Listen to the best system in the store, and I mean for an hour or more, not five minutes. What would you do with this system if it were in your living room? Do it. Come to think of it, what would you do to this listening room if it were your own living room? Do that too.
(h) Visit the big boys. Walk into Price Costco or any large volume warehouse store and check what they are selling that directly competes with items in your store. If you are not underselling them, ask yourself why anyone should buy the item from you.
(i) Be ready for anything. Imagine someone walks into your store and asks whether you carry some major brand you don't have, say Sony or Panasonic. What do you reply? (1) No, sorry we don't have it, (2) We don't carry that because it's junk, or (3) You have to go to the shopping centre down the street for that. None of these is a good answer. During a slack moment pose questions like this to your staff, and initiate a discussion on what you should reply. Don't be too eager to teach them the "right" answer, because it is entirely possible one of them will have an answer better than yours.
(j) Find the best CD player in the store. If it's not hooked up, install it. Determine that from now on all your demos will be done with it. Don't point it out to customers, just make sure they hear it.
(k) Contact old customers. Estimate how many people you've sold systems to whom you haven't seen since. It's always possible they're so deliriously happy with their sound that they never go out anymore, but as you can imagine there is another more disquieting possibility.
(l) Think about service. Imagine that, this day, three people walk into your store with service problems. (1) A customer comes in with an amplifier you sold him four years ago, made by a company that you know has folded. It needs parts. (2) A good customer brings back speakers he bought from you five months ago, which are still under warranty, with blown tweeters. (3) A lady you've never seen before brings in a receiver she says doesn't work, she saw the word "hi-fi" on your sign, and she wonders whether you can fix it. How do you deal with each of those cases? Remember that about the worst thing you can do is not have thought it out, and improvise on the spot.
(m) Talk hi-fi with your staff. I don't mean discussing whether Audio Research is better than Counterpoint or whether there's some digital process beyond bitstream. Talk hi-fi ideas. If your staff doesn't understand what you're talking about, now's the time to use the leadership qualities you always thought you had.
(n) Advertise. Yes, I know this piece of advice is self-serving, since I run a magazine that sells advertising. Much as I appreciate having you advertise, I have to add that I know for a fact that some stores have made back many times their ad investment. Some others haven't...it depended on how they advertised. And where.
(o) Be open to opportunities. Often you can get public exposure for nothing more than a bit of effort. One store I know lends equipment for launch parties of new records. A nice sign identifying the store sits next to the equipment. A lot of public events need music.
(p) Believe in what you're doing. Look, times are tough for everyone, not just you. If hi-fi leaves you cold, sell the store and move on to something you find more exciting. But if great music convincingly reproduced still turns you on, then you are the motor that can make this industry survive. The answer is not to switch to selling rack systems, but to avoid the mistakes others make and cater to the surprisingly large group that either shares your enthusiasm or would share it if you gave it the chance.
CONTINUE WITH THE COURSE: