Published On: March 21, 2011

How Bose Can Teach The AV Business How To Sell More Systems For More Profit

Published On: March 21, 2011

How Bose Can Teach The AV Business How To Sell More Systems For More Profit

All highs no lows it must be Bose has been an adage used among audiophiles for years and while Bose may laugh at the notion it's not because the saying is funny-no Bose is laughing all the way to the bank for they remain one of the most prolific and profitable brands in all of AV.

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As an audiophile and AV professional, I am not really a fan of Bose speakers, nor have I ever been in my 20 year consumer electronics career. With their massive market share and well-funded engineering department, I don’t understand why they voice their speakers the way they do – but even their most enthusiastic detractors have to admit that Dr. Bose and his team really know how to sell speakers. I have always said that the most impressive element of Bose is their ability to market into nearly every channel – for that I am a fan of the company’s marketing.

Additional Resources
• Find more original stories like this in our Feature News section.
• Explore related stories in our Industry Trade News section.
• Read the review of the Bose SoundDock II.

Look how other AV companies are now hurrying to get into big box stores, warehouse stores, Apple stores and online retailers. Bose is already there and already dominant. And Bose has a dozen other channels that they milk for millions of dollars of sales per year, including print newspaper ads, door-to-door, TV infomercials and beyond. They might be the single best multi-channel marketing company in the U.S. economy – not just the consumer electronics business.

There is a new place that Bose is leading the way into, which is as a finely tuned audio and video retailer. A lot of ink goes to Apple for their massively profitable and uber-cool Apple Stores but Bose quietly does what Costco, Target, Wal-mart, Best Buy and sadly, many brick and mortar specialty AV stores fail to do – Bose does one hell of an in-store audio-video demo. Walk into any shopping mall or outlet location with a Bose store and simply saunter into the store near the home theater demo. It won’t take 30 seconds until a well-trained salesperson will invite you in and show you their best demo.

The demo is to-the-point, dynamic and well designed. It highlights the strength of their products and the unity of their systems, while leaving the weaknesses far from your consciousness. Most importantly, anyone with a heartbeat gets the show if they even walk close to the theater. Even if a consumer couldn’t buy one of the interconnects in the system – they get the demo so that they can tell their friends that Bose is the best. And who could blame them for spreading the good news after being treated so well at the Bose store? More than one high level AV manufacturing executive has experienced this level of sales expertise and has been left the same way I was – WOWED by the sales skill, the production value of the demo and the I-care-to-make-a-sale enthusiasm that you don’t get in the big box stores.

Realistically, I don’t think you can expect to get this level of sales expertise and AV demo at Costco as they don’t really “sell” anything – they just allow the consumers to take home discounted items that are pre-sold by online publications (like this one and many others), TV, magazines and other outlets including other retailers. Ironically, if you were a consumer shopping simply on price, there are better HDTVs sold on the Internet than at Costco, Wal-mart and Target; however the convenience of just dragging home a new set does have some appeal for some consumers. For about 10 percent more there is likely a local store that might deliver and setup the HDTV for you at your home, might offer a better warranty and possibly a better demo. Ask them what they can do for you over the well-known players and don’t be surprised to see them offer a nice package to earn your business. Many California specialty stores are offering to recycle old CRTs and other sets for consumers who buy a new set. Others offer ISF video calibration for the HDTV sets at little to no additional cost. Depending on your needs – it’s nice to be treated well as a customer shopping locally and looking for both performance and value.

Read more about what Bose does right on Page 2.

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In these challenging economic times, the big box stores will stay focused on price, price, price when they should be focused on value, sales and expertise. This leaves a beaming opportunity for specialty AV dealers and audiophile salons to differentiate themselves from their big-box competition, as they can add real value to the sales process. As Bose has proven at their stores – you can do stunning demos for each and every person that walks through the doors. I challenge specialty stores to find affordable and meaningful ways to get people into their best demo rooms (Google ad words, online ads with specialty sites, cheap radio ads, email outreach, special events, geo-targeted PR, search engine optimization) because if Bose can score customers with their slick demos – so can specialty AV dealers.

Sadly, many specialty retailers demand high profit margins for the products that they sell but are reticent to reinvest those margins into earning new customers. They long for a return of the good old days of a booming real estate market that had consumers pulling 130 percent equity loans so that retailers could just take orders off of the phone for large dollar installations. Those days are gone as today, meaningful clients with real budgets need to be earned. These buyers need to be educated as to why they should spend a little more than at the warehouse stores or big box retailers. Big profit margins must be invested back into creating customer demand by these same retailers – another lesson that Bose has always known, as creating consumer demand is everything.

For example: try telling a guy who owns a Ferrari or a Porsche that “Bose is crap.” Not only is it a foolish thing to say – it simply doesn’t add up to how they view the brand – as that is the audio system in their exotic car. Conversely, show them what the world of high end of AV and home theater offers and why it is worth the money and you might earn some of the money that this wealthy client historically has proven he will spend on exotic cars, watches and other luxury goods.

The good news for specialty retailers is that as we learned with the recent catastrophic failure of Ultimate Electronics (and others before them like Circuit City, Tweeter and The Good Guys!), is that price isn’t what sells over all else. And for those who are only shopping for price – there is the Internet where you can both save state sales tax and additionally get prices on AV gear that is reflective of the lack of brick and mortar and human resources overhead. But even for the price-oriented consumer, the guy wandering into the Bose store in the mall or the wealthy, young couple getting ignored in Magnolia – they all want to be blown away with AV technology. They want to be shown real value and real performance. They want to be sold a system that they can afford, that can also perform all of the latest and greatest tricks while sounding and looking fantastic in their media room. Show them how to make CinemaNow jump through hoops or how good your remote programmer can tweak out a Harmony remote and you are starting to really earn a customer.

At this level of excellence, the Internet and big box stores will have a hard time competing with. Once again, a lesson that Bose already knows. The challenge for the remaining brick and mortar, specialty AV retailers is – can they drive meaningful traffic through their front doors without counting on their manufacturers to do all of their advertising for them so that they can show real consumers why spending 10 or 20 percent more than Costco is worth every penny and then some? I still believe this is a realistic goal if retailers work to create consumer demand and do fantastic demos – just as Bose does all day every day in nearly every major city in America.

Additional Resources
• Find more original stories like this in our Feature News section.
• Explore related stories in our Industry Trade News section.
• Read the review of the Bose SoundDock II.

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