Published On: September 3, 2009

The $2,500 and Under Room - How To Sell Audiophile Gear To a New Generation of 200,000,000 Music Lovers

Published On: September 3, 2009

The $2,500 and Under Room - How To Sell Audiophile Gear To a New Generation of 200,000,000 Music Lovers

HomeTheaterReview.com's publisher editor Jerry Del Colliano gives his suggestions for how to market entry-level, affordable audio to a new generation who are so used to listening to music in MP3 format that they may not know what they're missing in terms of sound quality.

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Boy did I ever grab the attention of the dealers in America during these hot summer months. I have received dozens of emails from AV retailers around the country objecting to calling (in general terms) dealers "lazy" and "entitled" while calling most reps mere "order-takers". Some manufacturers were even peeved with me for talking about margins (specifically rep margins); however these numbers are realistically no secret to the audiophile, as no hobbyist group does more research and or tries harder to get the most audio performance from their beloved music playback system. For that, you have to love the traditional audiophile even if they are a spending less and less as they age.

Additional Resouces
• Read more audiophile news at AudiophileReview.com.
• See more original stories like this in out Feature News section.

A lot of people think that as the American economy starts its long road to recovery, that things will rebound right back to normal. Many of the print magazines that HomeTheaterReview.com fights over ad budgets with, truly believe the days of getting $6,000, $8,000 and $10,000-plus per page for an ad with no statistical accountability, that reaches an increasingly older audience will be returning. They are wrong. Dead wrong. Audio dealers who think a "killer app," like the somewhat profit-rich, flat HDTV, will drive dozens of new customers through their front doors are also misled. HDTVs today are now mostly a commodity and consumers looking to spend a little extra money above the big box retailers and especially the warehouse stores demand that they get more and more for their incremental spends. If it makes the retailers feel any better - the ad agencies demand the same from online publications. If you are spending for premium goods in any market these days - you can ask for the world and you might just get it. That's just how things are right now in this economy.

I believe the solution for specialty AV dealers' sales and/or profitability woes is to return to what made the "stereo store" truly great. I am proposing that dealers get back to selling audio. That's right - I said it's time to get back to selling high performance audio gear. It is true that consumers believe what they see much more than what they hear; thus the "order taking" comments in recent weeks. All salespeople want the easy "lay down" sale but that isn't really the foundation of a great working relationship. With over 200,000,000 Apple iPods walking around in the hands of the next generation of potential audio enthusiast fans' hands, and traditional audiophiles headed quickly towards Social Security, I am proposing a different way to sell audio. I am proposing selling audio for the new economy and for a New Generation. The consumer demand is there as Apple has proven to us. The question is: are dealers too set in their ways to get away from selling bloated, overly-esoteric audiophile products to older clients or can they get back to audiophilia's roots when younger Baby Boomers in the 1980s bought up the likes of Adcom, Aragon, Magnepan, Luxman, NAD and other value oriented products that led to a generation-long audio gear love affair?

The Under $2,500 Room
I am challenging - especially the dealers who emailed me in the past few weeks - to consider investing (YES - this means you have to spend some of your money) in one new room in a traditional brick and mortar store. Call it the "Under $2,500 Room" because nothing in the room should be much above that price point, as the next generation of consumers can't yet pop for high end Meridian, Wilson and Mark Levinson - but someday will. It just takes time, interest and money.

Construction:
First off, gut the room with the help of a contractor. Ditch the drywall and replace it with Quiet Rock which is easily three times the cost of traditional drywall but with its "goop" you can create a very quiet environment to listen in, even for affordable gear. Fill the walls with acoustical material made from recycled blue jeans or other "green" sound deadening materials. Replace any windows with new, multi-pane windows which are more energy efficient and quiet. Ultimately install absorptive treatments for the windows to reduce unwanted reflections. Rip out the carpet and perhaps replace it with dark hardwood floors (think Apple Store) or even polished cement. Add a thick carpet to soften the acoustics. Place a thick carpet in the middle of the room where the main seating will be, to help with absorption and to create a luxurious yet modern look.

Before finishing the drywall, wire the walls with HDMI cables for one or two video displays but not many. Run conduit in the walls for multiple runs of speaker cables and audio cables too. This costs nearly nothing when the walls are opened and its allows you to keep the cable clutter to a minimum, which is how Apple does it - but not how most traditional stereo stores show affordable audio gear.

When the Quiet Rock is up and the room is painted, build a relatively thin fabric wall (Whisper Walls are good) on two sides of the room as well as in the ceiling. Install easily 50 low voltage lights with very specific tasks of lighting up reading areas for the listener, showcasing gear on display. No one light is designed to light the entire room. Control the lights with a Lutron Grafix Eye or some other good lighting control that costs under $1,000, and create lighting scenes.

There should be a good amount of equipment in the room. However there should only be one (maybe two) seats, preferably ones that swivel and that have foot rests like an Eames chair. The majority of the equipment should be resting on custom made (but not too pricey) maple veneer shelves positioned from waist level to a little bit higher. Avoid the urge to put gear on the floor like a stereotypical stereo store. Create a focus on the gear currently working by placing it on stands than match the shelves made by your cabinet maker. They can be rectangular and perhaps different heights to create visual interest. These stands will be cheap to make as they will be made from plywood and covered in exotic wood veneers. Keep the systems simple and elegant with cable clutter at a minimum.

For the rest of the equipment in the room (and there should be a good amount to create an art gallery effect) showcase the equipment on the shelves. Hide the power cables by cutting holes in the shelves and use polished aluminum grommets to organize the cables. Realistically, most of the gear in the room won't be actively demo'ed but could easily be moved from the shelves and into service if needed. Equipment should have plastic tags with printed information about the product like you would see in an art museum. "XYZ's USB stereo preamp, made in Belgium, $1,995." Let people learn on their own what things cost without having to pitch it to them constantly. This room is designed to be very approachable for the new school customer.

Read more, including the necessary equipment requirements, on Page 2.
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The Equipment:
One of the things that made the audiophile business grow in the past
was the willingness of traditional dealers to take on new brands. Ask
most sales reps and AV manufacturers and they will tell you that the
risk taking on a new line has nearly all but evaporated with
traditional AV stores. The good news is that there are a whole host of
new and more off-beat brands that can and should be added, that aren't
in every store's product lineup. The exact mix of products is up to the
dealer to decide but having exciting new products in the store is one
of the things that brought audiophiles into stores month after month in
the heyday of the business. People traded-in gear, upgraded and
listened to new, exciting products. Today's retailers sometimes tend to
be a little too conservative with their demos.

To be clear, this room isn't for receivers and home theater demos.
That's for another and equally important part of the store. While video
displays are needed for on-screen control - there is no need for
in-wall, on-wall and or surround sound speakers. In fact, there
shouldn't be too many speakers in the room at all. While my personal
preference would be to have visually striking products like entry level
MartinLogans, good floorstanding speakers from brands like Revel,
Bowers and Wilkins, PSB, Paradigm and others are good. More audiophile
speakers could also make the cut, especially speakers from the U.K.,
Europe and around the world. Exotic is good but there should be a
balance. One or two self-correcting subwoofers should be used in the
room for audiophile demos as the next generation of consumers want to
feel their music as much as they hear it.

For source components, there are a whole host of very good and
affordable iPod docs from the likes of WADIA, Peachtree Audio, Krell
and others. Apple TV is a must. For $300 you can have Kalidescape-like
control of your music, movies, photos and more. A main computer hosting
lossless AAC files for music could be in the room or in another room.
Despite the fact that Oppo's $499 Blu-ray player is sold factory direct
- make sure one is in this room. It's a statement piece for value
audio, it plays SACDs and DVD-Audio discs and this kind of consumer
will know about it. You will earn cred with the consumer if you have
the guts to put it in your shop even if you don't sell it. Install an
affordable yet USB-enabled turntable. Kids actually love vinyl for its
kitsch-factor. Show older customers how you can take Sgt. Peppers and
rip it from a record and record it on a hard drive. While many have
heard that this is possible - actually having them do opens a whole
other level of understanding.

For electronics there are all sorts of fun lines to look at.
Benchmark Media's USB preamps are ultra-cool and are physically small
like Apple TV and other portable products. NuForce's digital amps and
very quiet stereo preamps remind me of what Aragon's 4004 amp or
Adcom's GFA-555 power amp was to the audiophile business in the late
1980s. Look at NAIM's NAIT tiny integrated amp for some out-there
flair. Cary Audio's Xciter series has a cool USB DAC that one of our
readers won last month. They have a tube integrated amp that is even
more sexy to look at. Krell's KID and PAPA DOC are the perfect way to
get consumers into a classic, high end audiophile line. By no means is
this the end of the list; it's a good start to highlight the concept.

Audiophile cables should be used but not crazy expensive ones.
Cables shouldn't ever look messy. Bluetooth connectivity could blow a
consumer away. Imagine slinking into an Eames chair, dimming the lights
and having the consumer play his or her music from their iPod touch
without wires? You will have their attention technically and when you
tell them that the system is under $5,000 - you might just get their
money or perhaps more as you show them more and more new-school audio
goodies.

Dealers will likely need to cherry pick some of these audiophile
lines and if they invest as described above - they have every right to
do so. This room needs to be vibrant and have diversity. It needs to
have the modern look that GenX and GenY flock to and spend money on.
Manufacturers who don't understand will learn sooner or later,
especially as you are selling audio like its 1988 all over again.

Marketing and PR
If you are going to use an Apple or any computer system to manage audio
files and other media for demo - make sure that for every demo you do
that you get the prospect's email address. You earned the right by
creating and performing the demo. This new type of client wants to be
communicated with via email, Twitter or Facebook and this can help you
promote repeat traffic as the room adds new goodies.

Invite the local newspapers over to go through your demo. Show them
how an audiophile store has moved to selling to a younger demographic.
Show them how you have bridged the gap between audiophila to the iPod
generation. Do the USB turntable demo. Show them how they can control
an iPod Touch via Bluetooth on your system. Blow them away and expect
the ink to roll in.

Advertise. Yes, I said advertise. Even a $200 a month campaign on
Google using geo-specific ad words can help drive traffic from the
source where these new buyers are. Consider other venues like
personalized terrestrial radio spots and cost per acquisition ads in
print, newspapers and beyond. Many specialty AV websites offer
geo-targeted banner ads too which can affordably earn new clients
specifically in your region.

Throw a party for your consumers to open the room. Give away one
system to somebody but make all of your consumers sign up for your
email list because sending snail mail to them is only OK the first
time. Snail mail doesn't work very well, it's expensive and it isn't
very green. Make sure the catering is good. Partner with the local high
end wine store and see if they will do a wine tasting and hit up their
list. Do the same with an art gallery that sells modern 20th century
art. Perhaps even install a system on spec in both other stores. Can
you say "new leads?"

Take professional photos and post it on the front page of your
website. This ties into the Google cost per click campaign nicely.
Amateur photos are an insult to how cool this concept is. It's worth
spending the last $1,000 on.

Invite college music classes in during the week. Repeat with
engineering students. Baby Boomers fell in love with audio gear when
they got transistor radios and it just grew from there. In college
along with a muscle car - what defined a Boomer man more than the size
of his speakers? Actually, don't answer that question - but you see
where I am going with this.

Conclusion
The audio enthusiast is a great client and there are hundred of
millions of them out there ready to recruit into new-school audiophiles
right now. Will the custom AV market return? Absolutely - just as soon
as the housing market rebounds. People will want all sorts of custom
goodies in their homes but the specialty audio market is an add-on and
or an additional market to that business that allows for repeat
business and good profit margins for the dealer. The consumer gets the
best in affordable, sexy and high tech goodies as well as a golden path
down the hallway where the big audiophile room is. How long do you
think it will take a young college grad who buys a $5,000 iPod based
audiophile system to start sniffing around the 802d's or the Wilson
Sasha WPs? Not long. Not long indeed. And these new clients will see
the true expertise that specialty dealers have to offer that the big
box dealers and warehouse stores simply cannot compete with. Hell, if
the customer wants a TV from Costco - go buy it for them just as long
as they get the good stuff from you.

Additional Resouces
• Read more audiophile news at AudiophileReview.com.
• See more original stories like this in out Feature News section.

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