Can Burnt Bridges Be Mended Between Audiophile Retailers’ Scorched Customers?

Can Burnt Bridges Be Mended Between Audiophile Retailers’ Scorched Customers?

Audiophile retailers and consumers are in a bit of a battle, but it doesn't have to be that way. Jerry Del Colliano presents a few ideas that both groups can put into practice to get things back on track.

Burnt_Bridges.gifIn the past few weeks I have been talking with some pretty serious audiophile customers, mainly heavy users from Audiogon.com, about the state of the specialty audio business. There is no question that many value-based buyers look to Audiogon.com for deep bargains on used gear but that’s no different than an exotic car buyer looking to eBay.com for that perfectly priced Ferrari in an out-of-market dealer. The world of luxury goods isn’t as regional today as it is national or in some cases international.

Additional Resources
• Read more of our original content in out Feature News section.
• See more AV dealer news from HomeTheaterReview.com.
• Learn about how you can build a theater on a budget from Andrew Robinson.

What shocked me was the anger that both consumers and dealers have towards each other, especially on the high end segment of the market. Retailers ask why they should spend the money to show expensive audiophile and videophile products when the in-the-know buyers in their area simply go out of state to save tax or buy products used on Audiogon. When asked why the buyers are on Audiogon.com instead of at their local dealers, consumers cite a litany of complaints including: snobby dealers, lack of demo equipment, lousy trade-in programs, high sales tax and poor overall value in the gear that they buy today versus just a few years ago. They feel fully justified in traveling out of state to buy product that is very expensive, to save on tax. They feel no obligation whatsoever to support their local dealer as they think the dealers don’t really offer a very fair value in return.

This is what a shrink would call a toxic relationship.

The specialty audio-video business has always been about relationships and personalities. Warehouse stores and uncommissioned salespeople in blue shirts know nothing about this. Circuit City literally blew their entire business by dumping their commissioned salespeople, as it was those few producers who closed when others stood around like clerks. Today, clerks are all you get at all but the best AV stores, which makes for a tough buying experience.

What Can Dealers Do To Lure Back The Real Enthusiast Buyers?

1. Buy back higher end products from local consumers when they are loyal to you.
For example: if you have spent $10,000 or more, lifetime in ABC Audio-Video, then you get the premium trade up program. That offers market level trade-ins without the hassle of selling product on Internet sites. Let the dealer blow gear out but ideally they should be selling to their best, most high end clients locally. If the product is tired like an old CRT big-screen TV – recycle and remove it like the mattress company does. Make life easy on the consumers when they reward you with new business.

2. Price products fairly.
Don’t support manufacturers who jack up retail prices to make up for their inability to keep up with technology. Promote high value, high performance products just like consumers want to see. The Internet-direct brands sell on value and performance; thus so should the specialty dealers who also have the chance to do an in-store demo.

3. Extend warranties for consumers.
If somebody buys an entire system or meets a certain lifetime spend level with a store – offer to cover the repair costs if a product goes bad beyond the manufacturer’s warranty. If an amp has a 3-year warranty – extend it to 5-years. Offer free pick-up and return service on top of that in the event of a repair. Internet dealers and retailers are giving “white glove installation.” This is taking that idea one step further and sticking it to those who think selling extended warranties is a good long term strategy. Get a higher sale price, keep the sale local, sell quality product and the dealer will be just fine while the consumer is very happy.

4. Sell service over commodities.
For HDTVs bought via a specialty retailer – give an ISF calibration for free if they buy the TV from you. For audio – hire one of the top audio gurus (Bob Hodas, Keith Yates, Tony Grimani) to come to town two or three times per year to work with your clients. Bring room treatments, EQs, cables and new gear to the top clients’ homes so that they can get better performance. They will spend big time to support you if you deliver high value in return.

5. Ask consumers for their business.
Be honest with a consumer asking for a 30 percent discount that you literally cannot keep the lights on if you give such deep discounts. Explain to them what it costs to “floor” high end products and that without their local support it simply isn’t possible to support the high end buyer.

Learn what audiophiles and videophiles can do on Page 2.
Burnt_Bridges_repair.gif

Why Should Audiophiles and Videophiles Support Local Dealers?

1. High end companies need specialty AV dealers to survive.
These dealers need a fair margin to make it, thus can’t give 30 percent
discounts – thus they have to make it back somewhere else. Ask for all
of the extra goodies like free labor, calibration, extended warranties
and throw-ins.

2. If you like a good local demo, then you need to support your local dealer.
Communicate with them as to what you’d like to see on their showroom
floor. If for some reason they can’t do it – travel to see a very high
end product at another dealer, a trade show or at the company’s
facilities – then buy it locally. Be open and forthright about the deal
and buy local. Let your dealer know how loyal you are to them and what
you expect back for their loyalty.

3. It won’t be long before the rest of the country copies California on their retroactive state sales tax law,
thus going out of state will be nice but you still may owe tax. With
that 8 to 9 plus percent savings out of the way – why not support your
local store?

4. Resist the urge to buy commodity products at the big-box retailers.
Communicate clearly what added value goodies you want from a specialty dealer who might sell you a Blu-ray player, an HDTV
or beyond. While these sales may be small compared to the big
audiophile and videophile deals – they all add up. United Airlines
doesn’t mind if you fly a few one hour flights between popping for that
business class LAX to Heathrow ticket. It’s all business and they
appreciate your loyalty. Make sure your dealer knows how loyal you are
to them and that you understand and respect their business model.

5. Enthusiastically refer business to your favorite dealers.
They love this but you must make sure you take credit for it. If your CPA or chiropractor needs a new system
– send them to the owner or manager of your local store. Follow up to
make sure they are taken care of nicely. Dealers love it when they get
referral traffic and will do all sorts of good things for you that
buying used products on the Internet at rock-bottom prices can’t do.

There are a handful of really good Internet retailers out there including (but not limited to) Orb Audio, Aperion Audio, Emotiva and HTMarket.com
who will bend over backwards for your business. You should expect the
same from your local dealer if you are going to support them –
especially at the high end. In the end, when buying new if you ask for
more goodies and respect the two way relationship with your local
dealer – you likely will get more value than you can in most used deals
but you must be open, honest and overt about what you want from the
transaction, while also understanding the business model (and
shortcomings) of your local dealer. If you love home theater and/or high end audio, dealers need you and you need them. Now is the time to mend the broken bridges and get down to business again.

Additional Resources
• Read more of our original content in out Feature News section.
• See more AV dealer news from HomeTheaterReview.com.
• Learn about how you can build a theater on a budget from Andrew Robinson.

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