There is a Major Shift in Event Themes which “Do and Do Not” Work.
This is a departure from the norm, yet as CEO of two direct response companies who work side by side in many markets to support weekend sales, I felt compelled to write on this topic which is relevant to both companies, and the dealers they serve independently and jointly. Sometimes the market place speaks loudly. As a company in touch with the results in many, many markets, we can state with immutable certainty that piano buyers have decided to no longer respond to some old reliable themes.
We will now examine how we got into a position for a shift to take place, and what to do about it!
The weekend sales event has been a huge part of the promotional calendar for piano dealer-principals for decades now, but a huge change has occurred. The list of themes that return on investment has morphed and exposed some valuable consumer psychology.
The first recent shift came in 2008 shortly after the economic downturn, the one caused mostly by ill-fated housing finance practices, which is explained succinctly here in an excerpt from the article “Investopedia” by Barry Nielsen: “When the housing bubble of 2001-2007 burst, it caused a mortgage security meltdown. This contributed to a general credit crisis, which evolved into a worldwide financial crisis. Many critics have held the United States Congress – and its unwillingness to rein in Fannie Mae and Freddie Mac – responsible for the credit crisis.”
The result to the piano business? The loss of discretionary income and readily available financing, created by second mortgage loans, dried it up. The amount of available money was so negatively affected that many dealers changed their operations to dramatically reduce overhead, and others ended up having to close their doors.
Another HUGE change is the tsunami of technology which has forever changed the way we communicate with one another. In the early days, it was all about driving people to your website, so the website visitor would become intrigued and possibly raise their hands as a lead. SEO was preached, therefore, a basic understanding of it and the analytics thereof. The analytics that the IT sales person sold became the new Arbitron ratings (Nielsen Audio these days), and we were trained that if these numbers were good, then our business would be healthy. The problem was that just because the analytics said 14 gazillion visitors came and went as they pleased, the veritable number of prospects generated were few and far between. So now dealers were trying to transition from the days of floor traffic to the days of web traffic, but it didn’t often seem real without the human interaction. The numbers said there was traffic to the website, but it was not resulting in sales the way they expected it to.
Another nail in the old proverbial coffin was the lack of vision displayed by many dealers, who so desperately needed to move units that they convinced themselves that running sales events more frequently would boost their revenue. All the while they should have realized that they were stealing dollars out of their own pockets by devaluing fine instruments.
The final huge contributor to our current “events that still work” lineup shift is the competition the manufacturers allow between online sales sources, and the “in the trenches” local, territorial dealers. The term I use is cannibalism. It reverberates much like a mass production story which ended tragically, the story of the Painter of Light, Thomas Kinkade. After achieving some serious commercial success by placing his products in independent art galleries and building a network of local art retailers excited about representing him, he set himself up with company stores vying for the same dollars the independents used to feed him. The result? Try to find a Thomas Kinkade gallery or art supplier today, and good luck doing it. Cannibalism killed the dealer network and the company stores failed. Today, where is the art this man left behind in the scope of value and demand? With the advent of internet selling, it is harder and harder for a dealer to dominate the territory in which they work to make a living. Dealers must have their internet marketing act together to compete well, and that includes lead generation, not merely their SEO and web presence.
Let me be so bold as to state that these four items: the economic downturn, the tsunami of technology, the abuse of fire sale and savings themes, and finally the competition of the dealer with their own product providers, have created a challenging (to say the least) environment in which to be highly profitable for a piano dealer principal.
To be fair, piano dealers haven’t been the retailers primarily responsible for the consumer abuse that created the distrust of the luxury market buyer. The folks in our ear and in front of our eyes most often are the auto, furniture, and insurance folks. It’s tough to get the consumer to believe you are presenting them with a legitimate savings opportunity when that’s all they hear from every direction, all year long. What is truly amazing is how millions of people decide simultaneously to reject a theme. It is a buyer psychology so loud and clear that it is deafening in its non-response. The negative psychological effect has reached critical mass. Retailers cried “wolf” so often that the trust between them and the consumer was destroyed.
Allow me to cite a personal example of a theme running its course: In the window of time between 2003 and 2008, we at DSE enjoyed a great deal of success by providing a small group of piano dealers a holiday promotion by using a very attractive post card, whose offer was a FREE player system with the purchase of a grand piano. Year after year, a small core group of dealers sold a strong number of grand pianos with player capabilities to top of the market buyers. After years of being a dependable performer, I decided it was time to promote the program to a new batch of dealers, so we could bolster their high-end holiday piano sales too. So, in 2009 I went on a prospecting spree and added ten more clients to the lineup of customers to use this direct mail campaign during the holiday season. As Christmas drew nearer and nearer, the reality of what I had NOT accomplished began to become crystal clear. The same targeting, offer and mail piece, which I confidently sold to a whole new group of dealers, no longer resonated with the buying public, and the end result was a train wreck for DSE and all our clients who had invested in the holiday theme/promotion. As it came to pass, the year I added ten more valuable clients to the old ones who had annually done the program – it failed. Not in a few, or most of the eighteen markets I sold into it, but ALL of them. The markets where in the past they had a problem getting all the units retro-fitted or set up in time didn’t respond, nor did the new markets who tried it. To this day, I don’t know why interest didn’t taper off or fail intermittently. It just failed dismally in every market where the DSE clients invested in it, all at once – BOOM – the strategy blew up, everywhere at the same time of the same year. Incredible. To this day I don’t know exactly why. Theories be damned, it didn’t matter. I had ten new clients and half of the old ones upset with me that I had convinced them to invest in something that tanked so miserably.
Point of the story? Sometimes, at the drop of a hat, the market makes an immutable statement and all of us, retailers and marketing folks alike, must accept it and adjust to the new normal it creates. I can cite more examples where we went “back to the well” too many times and a sale that for years had been profitable, suddenly was a failure. I won’t name specific schools or arts organizations, but most of you reading will have to admit that the modus operandi was to ride that successful pony until he collapsed, with no regard for the promotional calendars of the future; milk that cow until it’s dry. A retired and respected friend of mine named Glen would often advise dealers to go every other year and not always at the same time of year, but that advice, more than not, fell on deaf ears. Going back to the well over and again was the norm, and eventually the old proverbial “well” did run dry. The theme became too frequent and predictable, therefore to the buying public it was not as believable.
Event-itis is a disease; you become addicted to the experience of moving a large number of units in a short period of time and want that result again… and again… and again. In some larger markets a small semblance of the experience will continue to repeat itself, but not like it used to in the “good ol’ days.” Let me identify the problem, which is also the opportunity: not enough partnerships with arts organizations, schools and charitable organizations in the community! This is the dilemma and the solution. Not enough valuable partnerships, so that you can rotate the themes and keep them and the partners fresh and fired up. As Sophia on the Golden Girls would put it, “picture it… six community partners to work promotions with!”
Why am I hitting on the partnerships? Remember this line from earlier in this article: Sometimes, at the drop of a hat, the market makes an immutable statement and all of us, retailers and marketing folks alike, must accept it and adjust to the new normal it creates. Well the market has spoken loud and clear. The buying public rarely believes that the price incentive you dangle in front of them is totally genuine. These days it is certainly not motivational, so savings statements now do less and less to move the market than ever before. The old standby terms such as: clearance, liquidation, savings, everything must go, down to the bare walls, no reasonable offer refused, store wide reductions, deep discounts, a limited time offer etc. etc., have been trotted out there so many times that the buying public is callous.
Why shouldn’t they be? In fact, think about it, if you are always running a sale, you have no regular price! The discount IS your regular price, which means your sales organization has gotten extremely good at selling price rather than value, and I hate to be the bearer of unwelcome news but that translates into seriously reduced profit margins!
Several years back, piano dealers started backing off the college loan programs and subsequent sales. Some because they didn’t like the diminishing returns, some because they didn’t want the product tied up that long, and others because they felt like if they turned the school into an “All Steinway School” that there was no longer a need or opportunity to serve the institution.
I don’t want to get side-tracked and go on my patented rant about creating market-share, so we’ll address the pool of interest that does exist in the consumer lake. The gross dollars thrown around post-event these days have quit referencing to this million-dollar sale and that million-dollar sale; this occurrence should have been the industry’s first indication that they needed to address the overall interest in the market place, but that never happened. As the performance dipped and the gross figures continued to as well, the dealers jumped ship in many instances. They were VERY disappointed in a $450,000 result, but in retrospect, a decade later, they wouldn’t mind that little bump in revenue and activity at all in today’s selling environment.
There are authentic reasons to raise funds because, unfortunately, schools and the arts are more underfunded today than ever. They have genuine needs, and you need “real” reasons, not merely price incentives, to engage music lovers. Give that some thought. Even fine instruments need maintenance. If you have schools (including K-12 programs), arts organizations, children’s hospitals or other educational, musical and community foundations that need assistance, you can position yourself as an integral and contributing part of those communities. Until and unless the world quits abusing the savings themes, this is your best tact to build a successful promotional calendar. My suggestion: take the time to go out into the community and forge some partnerships that will allow you to stroke some singles and doubles. Not all hall-of-famers are homerun-hitters. The other advantage to take to heart is that you, as a provider of music, can help others and serve the greater good, while also increasing your profitability. Being a good person can truly be both noble AND profitable. Consider this spiritual thought: By being a part of some philanthropic activities you can be blessed. I would call that a classic “win-win.”
So, to summarize this strategy in practical terms: the next time you are tempted to do the easy “in store price incentive” promotion, DON’T! Make plans for a brighter future! Worry about the day-to-day sales and “stuffing the pipeline”. Don’t fall into wishful thinking and attempt another sale without a human-interest dimension. Get on the phone, send an e-mail, get crazy and go visit some place where you can make a difference, and where a partnership is a good fit. Find at least four; five or six would be even better. Pare down the marketing expenditures and thoroughly work segments by interest and make more friends than your competition. Why? I’ve said it repeatedly, “The Company with the Most Friends Wins!”
So, in trying to not merely dispense bad news, BUT also counter it with a solution, here is how the issues and my advice tie in together. Remember the four causes for how we got into this predicament? Cut and pasted verbatim: the economic downturn, the tsunami of technology, the abuse of fire-sale and savings themes, and finally the competition of the dealer with their own product providers. Here are some solutions per topic:
Item #1: The Economic Downturn – This is a reality, and we must accept it and quit issuing report cards on marketing efforts based upon the “good ol’ days” standards. In our “new normal” we still have thousands of people who would benefit from having music in their lives. Let’s concentrate on filling that need and shed the memories of how things (sales events) used to be. One very valuable function of a well-thought-out event, large or small, is the new life it breathes into the pipeline of the sales funnel. We can’t make everything about today or, as the marketplace has proven, there will be no tomorrow. Concentrate on quality activity, because there is still plenty of profit to be realized, especially if we learn how to promote the benefits of music and create excitement to new people about what music can do in their lives.
Item #2: The Tsunami of Technology – It has hit. People don’t buy the way they once did. They shop, discover and purchase based upon their online existence more than ever. Every demographic, every psychographic, none excluded. You must harness this and ride the wave… or drown. The good news? There are some fantastic new tools at your disposal that translate into new avenues of sales opportunities. These new tools make it a great and invigorating time for small and medium sized businesses.
Item#3: The Abuse of Fire Sale and Savings Themes – Just give it up. Being old school and hanging on to these things is a waste of time and money. Yes, in some large markets where the population is dense, the old PT Barnum adage “There’s a sucker born every minute” may apply, but by-and-large, the day of the savings incentive as a stand-alone offer has come and gone… sailed away into history. It’s kind of like the trains and the buffalo; yes, they still have some value. Trains still haul some goods and you can still buy some buffalo meat in the grocery store, but they don’t dominate the landscape as they once did. Think back, with romantic nostalgia if you must (and many of us will), but when something has reached a historical status, it is just that – something that used to be much more vital in that by-gone age than it is today.
Item #4: The Competition of the Dealer with Their Own Product Providers – Not long ago, I wrote an article entitled “A Rant Against Cannibalism”, in which I expressed in detail my feelings about how many dealers have the legs cut out from underneath them, by none other than the folks that they buy their pianos from. I encourage you to read it for an in-depth opinion but suffice it to say, I have always been a fan of talented sales persons and organizations who effectively sell benefits and value over price. I have always been a proponent of the old “dance with who brung ya” ethic. My unhumble opinion is that a dealer should be empowered to own and aggressively work their territory, institutional business included, without interference from any manufacturer or manufacturer-authorized third party. I would make sure that my hard work in prospecting and building a market was viewed as incredibly valuable by my piano provider. Making them aware of the many in-roads you have, and are building, may deter them from any greed driven ideas which they may be tempted to support in your market.
In summary of these four topics, if you defend your territory with quality activity (not complacency), stay away from the image that the constant fire-sale guys wear, cultivate some great “good guy” partnerships and get a handle on modern day lead generation techniques, you can have a thriving business. If you do part of these things well, you may have an okay time of it, but if you totally ignore the networking opportunities and watch the parking lot thinking that, because the stock market is doing well for a stretch, that the good old days are on the way back then I strongly suggest therapy… ‘cause you ain’t living in the “new” real world.
Since the floor traffic is now on the internet, not on the actual floor, you no longer can afford to think like you are simply a retailer trying to drive traffic into the gallery. The market has totally changed its behavior, and so must you. Now let me stick my neck out with an opinion that may cause some un-subscribers; if you have a strong immediate ROI mentality and don’t focus most of your dollars on filling the pipeline and dominating the internet conversations, your days are numbered. If you are in a large market, you may survive (because of sheer numbers) longer than your middle and small market colleagues, but even if you do, you are leaving so much meat on the bones that it should be a crime! The days of giving a great demo to loads of floor traffic and being a six-figure person are over. Welcome to the world of “EAT WHAT YOU KILL.” Joey and I live there, therefore we build marketing strategies with the end in mind, all the while realizing that there is an unavoidable gestation period because in most circumstances today, people are impossible to close using old school sales techniques. They have access to more information, love to have choices and want to buy, but DON’T WANT TO BE SOLD!
In all honesty, the digital follow up protocol in the piano industry is years behind real estate, dentistry, automotive and many others. It is high time we came up with informational and creative “automated” messages with which to nurture prospects. We can’t, and shouldn’t, abandon the personal touch, but if we have automated tools at our disposal why not use them in conjunction with personal communications?
The value of an event is not to simply to harvest the bounty at hand, but also the prospects that can be placed into the sales funnel. When you place them there, do yourself a favor and communicate with them about the specific instrument type they inquired about. I’ll say this again because it bears repeating and should become muscle memory: a couple of follow up attempts and then sending a prospect a general, informational monthly/quarterly newsletter doth not a nurturing protocol make.
So here is the crescendo of this article: You are in the perfect position to make decisions to hold events that can be strongly supported by digital marketing, mail and the synergy which can be created between the two. The advent of digital marketing and the ability we have to find “piano interest” prospects online gives the small and intermediate sized piano dealer a cost-effective way to advertise, never before available at a fraction of the cost of all the tradition of TV, radio, and newspaper ads of the past. Better yet! We can “own the prospect” with landing pages optimized for conversion, and feed our sales people opportunities on a regular basis. Well thought out events when partnered with an image-favorable organization, be it a school, church, another business, children’s hospital or arts organization, can uncover lots of prospects not only for the event, but for the future, and let me ask you a question: If you are following up on a prospect who did NOT buy at the event, which of these “postpartum” scripts will play better? … Here are a few paraphrased to consider:
Example A) Mrs. Jones, this is Bill from ABC Pianos. Although the liquidation sale is over, we still have some fine instruments, including baby grands which you inquired about, available at phenomenal prices! My manager/the owner has allowed me to extend the sale pricing for a limited time for those who couldn’t attend the event. Please contact me at your earliest opportunity to take advantage of this temporary extension of these deeply discounted prices.
Bear in mind that the entire premise of the prospect being generated was based solely on a logical, non-philanthropic basis. What motivated them to raise their hands as a prospect was the opportunity to save money. There was no emotional, past personal involvement or “greater good” serving dimension of their conversion. They simply responded to a price-oriented incentive/opportunity.
Example B) Mrs. Jones, this is Bill from ABC Pianos. Although the event to support the symphony has ended, we as lovers of our music community still have an ongoing commitment to keep the maintenance program at the symphony intact. We need to be sure that the musicians who contribute to the musical culture in our city have well maintained, world class instruments on which to express themselves. In an effort to support them, we are willing to extend special pricing to anyone wanting to join us in our efforts. Please feel free to mention your desire to support the Springfield Symphony when you schedule a visit to come in and see our fine pianos. We are delighted that you showed interest in our method of supporting the symphony, and hope to hear from you at your earliest convenience.
Feel the difference? People buy on emotion and back it up with logic. If they want a piano, want to support the symphony and want to be given a special price, this is the perfect follow up. If “they”, as in the first example want to save money, all “they” have to do is wait until the next sale, because it’s (just like the furniture and automotive industries who’ve worn out the TV coverage and helped make them non-believers) just around the corner. If you build a pipeline of prospects based upon “good will oriented” community interests AND you get organized enough to talk to them about the benefits and capabilities of the specific thing they inquired about when the entered the funnel, YOU WILL MAKE MONEY! If you keep trying to find that incentive that sounds better, promoting a price lower than the last one, and the one before that, you are cannibalizing your margin. STOP IT! Your mission must have a community/ “greater good” element to it if you want to rise above selling price over value. Come on folks, let’s quit devaluing a vital and critically important instrument. Let’s sell value and be contributors to the betterment of the community around us. Believe me, it is the most noble and profitable policy we can set for ourselves. Why do I think that? Because I’ve never believed that we can make more money by selling units for the lowest possible margin. We should sell performance. Music, after all in the beginning, when the first primitive stretched a swatch of hide over a piece of wood, was about expression – not commerce. Remember the adage about the cart before the horse? I think we’ve fallen into the trap of worrying too much about money and not exciting people about the value of placing of music in their lives. Let’s concentrate on keeping the main thing the main thing and I trust that the dollars will work out well.
To believe in ‘the greater good’ is to operate, necessarily, in a certain ethical suspension – Joan Didion