AV Retailers Aggressively Push For The Upsell Despite The Down Economy

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Bryn_mawr_stereo_store.gifIn 1990 I worked for a mid-level retail chain called Bryn Mawr Stereo that had about 18 locations in the Philadelphia, South Jersey and Delaware area. Long after I left for music school in Los Angeles, the chain got acquired by Tweeter and then went out of business. However, during the few years I worked there the chain was a local force. Our General Manager, Richard Glikes, who today is the founder of the HTSA audio-video buying group used by many AV dealers, demanded chain-wide that his sales people try to upsell their leads when they walked in the door.

Additional Resources
• Find more original stories like this in our Feature News section.
• Read about similar problems with AV manufacturers in the article, Whale Hunting in the Desert.

Asking a customer's budget was not only fair game - it was a key element of technically strong selling - and everyone did it. If a nicely dressed client came into the store looking for entry level Polk speakers and a Yamaha receiver and I saw him drive up in an E-Class Mercedes, I would be remiss not to show him NAD, KEF and Celestion as higher end solutions in the same basic product category. The rule of thumb was to see if you could inspire a customer to spend roughly 20 percent more than their initial budget without blowing the sale during that recessionary economy. While it wasn't always easy to upsell the client, the last thing we wanted Richard to find out about was how we were irresponsibly walking our customers down the street to Hi-Fi House or Circuit City. If they walked in and wanted to buy - you were expected to close them. Plain and simple.

Today, I am hearing more and more stories of brick and mortar dealers all over the country pushing the upsell to levels that would be out of bounds in a good economy and downright foolish in these trying economic times. One HomeTheaterReview.com reader from Vienna, Austria called me on Skype to discuss his system. He is an IT executive for a major cellular carrier and has built one of the most sophisticated networked media systems I have heard to date. He has his Euro-satellite-DVR recording to a Raid 5 configuration bank of hard drives where he also keeps his uncompressed music, photos, home videos and other media. He streams all this both wirelessly and via CAT-6 throughout his house while backing up his media on the cloud. Networks are what he knows and he could teach most AV dealers a thing or two about how to manage media in a home.

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What he needed to augment his networked media system was either a top of the line soundbar like the Yamaha YSP-4000 or a modest 7.1 receiver with a pair of speaker so that he could grow his system. Two of his friends recommended a retailer in Vienna and he went to see them with a 1000 Euro budget (around $1,400), which is perfectly reasonable for his system needs. The guy needed a fix as he loves AV but this budget wasn't the end of the game - it was just what he could spend today. When he get gets to the retailer - which by the way, isn't a pure audiophile salon - they start him off with products that cost 8,000 Euros and go up from there. Perhaps he was dressed too well, wore the wrong watch or the salesperson loves walking lay-down sales out the door, but that's not the Richard Glikes 20 percent upsell. This type of move is like taking a car buyer who walked onto the lot looking for a VW GTI and putting him in a Maserati Granturismo for his first test drive. How the hell do you bring a customer back from that test drive to buy the car he can afford?

Obviously, the salesman lost a sale that was ready to happen that day, otherwise I wouldn't have been on Skype trying to help this guy build a plan for his system. He went for the gusto the same way many high end AV companies price their products comparably to a Marquis Jet Card or a used Ferrari when value oriented products like Wyred 4 Sound, Oppo, Orb, Aperion, Paradigm, Legacy Audio, Noble Fidelity, Emotiva, Benchmark and many other smartly-priced products are selling like hotcakes despite the horrible economy. Ultimate performance appeals to clients but value always sells. Always.

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People don't like being taken advantage of in any economy but they do like being sold to by a professional who knows his or her trade but also knows their customers' limits. For example, there is an Italian restaurant here in West Los Angeles who is famous for pushing black truffles when they are in season. For those who don't know, black truffles are about as expensive of a food product as you can buy and these subtlety flavored fungi pretty much make any other food taste better. Le Cirque in Manhattan is famous for their scrambled eggs with black truffles. But black truffles cost a fortune (white truffles are even more money and taste better) and this restaurant doesn't disclose the price. They simply come by your table and ask you if you want a shaving of black truffles on top of your pasta course. Much like a free refill on your iced tea or some grated Parmesan - the implication is that this is free. What people find out is that an $18 pasta plate now cost $54 with black truffles on top. The well-heeled patrons of this establishment tend to get fooled once with this and pay the bill out of embarrassment but on more than one occasion have I talked with multi-millionaire local foodies who, when referencing this restaurant, go into a fit of rage at how abused they were with the truffles. For me - I simply will not go back to the joint and I am not alone. Abusing your customers' budgets - even if they "have the money" is far outside the bounds of an upsell.

Read more about the problems with the overly aggressive upsell on Page 2.

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