Radio Sales Café

You may have one or more clients facing a situation similar to what I'm about to describe: I work with a client whose product mix includes home video (HDTV's, DVD players, Home Theater, etc.). He's an independent retailer trying to compete against big box brick-and-mortars, a nearby Costco, and various online stores. As you probably know, profit margins on home electronics are pretty thin to begin with (except for the real high-end stuff). This client finds himself at a significant disadvantage when it comes to making any reasonable profit on these transactions. The problem is compounded by the fact that my client is regarded as something of an expert on questions pertaining to HDTV formats. Shoppers will come into his store, pick his brain for recommendations, then turn around and buy from a competitor selling the same thing for twenty bucks less. (I once worked with a car stereo shop owner who faced this same problem. Drove him nuts - to the point of berating these shoppers loudly and publicly. Eventually drove him out of business.) Obviously it's not a good idea to try to shame customers into buying, even though their behavior may be shameful. The client does not want to give up the product category, as it brings people into his store that do make purchases in other departments. But factor in the cost of inventory, floor space, time and effort involved in dealing with customers, salesperson commissions, etc. and it's an expensive and frustrating situation. What can this client do to mitigate this seemingly no-win situation? Any breakthroughs out there? Oh - I should mention that this client is one of the largest independent advertisers in the market, and nearly all of his budget is invested in Radio.

Hi Rod,

Wow, this is a tough one! It did bring me back to something I did while programming in Clarksville, TN:

We had a car dealer who, while long time in the market, had a number of competitors (Military Town with Ft. Campbell). He was working with us via traditional ads, but results weren't all that hot. To save the account, I went to see him and I asked "Harvey, what can we do?". What we came up with was a :60 call in spot in AM drive, where Harvey and I would talk about things important to the market: Fishing, military families, high school football and the like. Then, at the end of our chat, he'd invite people down to talk more about those things, have some coffee and take a look at cars. I know it sounds a bit odd, but his business was up about 45% the first month with those ads and continued to do well the 2 years I was in the market. The response he got when people came in: "Harv, I heard your story on the station this morning and you had to stop...I had to get the end of it! I was thinking about another car too..."

This guy is a specialist, and he obviously has a level of respect in the market. Now it's time for him to use both in a way that makes it feel good to be around him and buy from him. Hope this helps!

Maybe something in his commercials that say "what do you pay for expert advice ......$120 an hour with your attorney, $150 with a medical specialist, $110 for a plumber or electrician. My price includes accurate, expert advice from sale to installation and for as long as you own your ......... we are a locally owned business and we sincerely appreciate your business.

Obviously this can be worded many ways, this is just a thought!

Rod, I don't think there's a magic solution to his problem. There are always going to be people who will take advantage of the situation. But reading between the lines, maybe it's a bigger problem of perception. "One of the largest independent advertisers" would indicate that the glass is half full. He is providing added value to his customers, and it's paying off to the point that he's successful (and smart) enough to be an aggressive, consistent advertiser. Anyone who does business the right way - giving to get, putting the customer's needs first - is going to get ripped off. It comes with the territory. But it's a winning formula! There are certainly tactical things he can do to improve his business, but ironically, the bigger he grows, the more people who will rip him off! The danger, as with the other guy you mentioned, is you begin to focus on the jerks and take steps to defend yourself against the evil customer.You adopt a bunker mentality, and pretty soon you treat all your customers as though they're trying to take advantage of you. And, like that guy, you drive yourself out of business. You can do your friend a great service by focusing his attention on the awesome power of great customer service. Focus on making his advertising as effective as it can be, but help him understand that his knowledge is a powerful competitive advantage. Advertising Idea. I feel like I'm channeling Jeffrey Hedquist here, but, why not make this guy's superior product knowledge the centerpiece of his advertising: "Those who know trust the guy who knows." His ads can feature him answering questions: "How big a screen should I get?" ... "What does 1080p mean?" Show off his knowledge. "Sure, you can buy that big screen TV anywhere, but why not buy it where you get a priceless component: Jerry."

Instead of allowing these customers to take his time during hectic business hours, how about offering a "free" HD seminar where he can share his expertise to a crowd. Sure, some of them will still go elsewhere to buy (human nature) but he could establish himself as the expert and probably pick up business as well.

Rod,
As everyone said here positioning himself as the expert is important.....he also needs to position himself as the person who will be there after the sale.

For awhile, analog TV's became so cheap, they became disposable. That is not the case with good HDTV's, or flat screens that require installation. They are not cheap enough to throw away if something happens to them. People will want them fixed and they want them fixed by reputable dealers. Do you know how frustrating it is to get service and repair from a big box store? Just getting someone to your house is a challenge. I base all of my appliance decisions on service providers after the sale and warranty.

Tell him to put his money and expertise up front and offer "Double the Manufaturer Warranty" with any purchase because he's that smart and that sure of the products he's selling. This will set him appart from the Walmarts/Best Buys of the world who try to upsell you an extended warranty. He will become the expert who puts his money where his mouth is.

You don't specify what kind of retailer he happens to be. It sounds as if he's not an electronics retail specialist, which is a problem. He's just another guy who sells HDTV, etc., as just a part of his regular product mix, as if it were any other appliance--which lowers his cache. That said, it doesn't mean he can't raise his cache to make him more desirable than a big box store. The specialty electronics retailers (a business in which I worked for almost a decade, both on a sales floor and as a marketing manager) cultivate a customer base by selling their expertise, their value added, and their cache. Snob appeal is key. (Not to be confused with being condescending, which some of them also do.) They also make their prices competitive with the big box stores. They deal where they can. They sell package deals that have high perceived value added. They improve the experience. They make sure the customer knows they're there before, during and after the sale. I used to work in a small audio boutique that was near a Good Guys. People would come to us after having been to The Good Guys and say, "Wow. you carry a lot of the same stuff, you're willing to deal on your prices, and you actually know what you're talking about." And they were sold. We also ran special events that got customers into the store after hours and educated them on various aspects of home theater--often resulting in deposits on big systems. Custom installation was also a big profit center, often more so than the equipment. If he wants to compete, he needs to make himself worthy of charging a higher price. Since I don't know the specifics, I can't say what he is and isn't doing right. But I can say that he needs to raise the bar and give the customer every reason not to leave. If he's just selling boxes, he's doomed. If he's selling the excitement and the follow through, he's got a leg up. If he loves the medium and share the love, he's more likely to win. He might also consider developing a distinct brand for his home theater department inside of his store--like, the Home Theater Zone inside Jim's Appliances. (Simplistic, but you get the idea.)

I would encourage him to get a 2x4 card made up that has a message such as "After you shop everyone else, come back to the guy with all the answers. It's a FREE bonus when you buy from Acme Electronics". Then...train him to start actually providing written notes to the enquiring customers about the questions they ask...and give them some questions to ask other stores when shopping there. That way, the person will be pulling it out at the box store, and asking very detailed questions...and probably getting incomplete answers. All the while, his message will also be seen repeatedly, reminding the shopper which store has all the answers, each time that card gets pulled out inside the box stores.

Thank you, one and all, for taking time to respond. Appreciate all the thoughtful posts. You've provided good food for thought and further discussion. In fact, I've invited the client to read this thread prior to our next meeting.

-Rod

Rod

Just a thought. If this guy's catch is that he's an expert and provides the up front advice to maximize a purchase, there may be a way for him to charge for a consultation, especially on the high end stuff and then offer that cost back (and then some) toward the purchase of the equipment? It might lock in teh buyer as well as act as a qualifier for only serious buyers. There's gotta be a way to work that in to a pitch

"If you're wondering about what equipment is right for you, schedule a session with Bob and the $10-20 cost will be refunded against your purchase plus an additional 10%? or something like that"

Just my 2 cents.