Members of the two car stereo marketing/buying groups have so consistently beat the average performance of many other retailers, that it is fair to conclude that these groups are now a proven success in the car audio market.
In Car Experts (ICE), the 5-year old organization, with about $300 million in sales, says its retailers’ business is up by 9.5 percent on average with 90 percent of its vendor partners so far this year.
Two-year old Mobile Electronics Specialists of America (MESA), with over $100 million in sales, after recently polling over half its members, said they were up on average over 11 percent.
By contrast the car audio market is flat, with business to specialists as a channel, up about 4 percent over the past two years, were are told, according to NPD Group data.
One MESA retailer, 3-store Sound Warehouse in Salt Lake City, UT has had its best year, this year through August in its 33-year history. Custom Sounds was up 23 percent for the month over last year.
“Our members are up because they are promotional,” said Ryan Gunter, executive director of MESA. Sound Warehouse remained promotional during the downturn, “ so as things are starting to come back, he’s the guy everyone remembered seeing when times were tough,” said Gunter.
ICE executive director Rob Elliott estimates that there are about 4,500 true car audio specialists in the U.S. (whose primary business is car audio, or whose main business is home audio with a strong car audio element). “We know for sure that at very minimum, 25 percent are doing over $1/2 million [per year] and my best guess is that the true figure is 60 percent,” said Elliott.
To be an ICE member, a retailer must bring in revenues of $1/2 million or more a year.
Many dealers ask for an “ICE lite” that would cater to low volume retailers but, “The problem is in 90 percent of cases, the retailer doing $250,000 a year is struggling with just the day to day financial burden,” so it’s difficult for the retailer to spend even a small amount of time to work on improvements, said Elliott.
ICE is constantly surveying its members and so it has a lot of statistics on the market. Elliott says an average member closes 50 to 60 percent of the sales for walk in customers who express an interest in a product.
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He wouldn’t disclose actual dues to join ICE but said the benefits more than offset dues in just volume discounts from vendors. Additionally, each retailer gets multiple referrals from the ICE web site a month, and the average dealer closes over 80 percent of those referrals.
MESA offers its retailers a “sale in a box” template with professional, creative materials. Both groups also produce TV commercials.
Dean Magnesen owner of Sound Warehouse, said of MESA, “The buying is one thing and it’s great to have that advantage, but it’s really the marketing. No longer are we just on radio or TV. We’re on all these mediums and it takes more time to put together a campaign than it used to. MESA has been extremely helpful on Facebook and email templates. The sale in the box has been marvelous.”
ICE is a near $300 million group with 150 retail members, which is adding new retailer members at the rate of approximately 5 per month.
MESA has 28 members with 98 storefronts, representing $116 million in sales.
The ICE web site is the heart of the group’s marketing strategy and it helps dealers get the floor traffic all retailers are trying to boost.
Elliott believes each customer from the web site is worth $2,500 all told including his repeat purchases and recommendations to other customers.
“At the end of the day our guys are extremely good on the sales floor and in the installation bay. That’s their strength. The parts of the business that sneak up on them are the areas that involve marketing, merchandising, policies and personnel. We work to lessen the load in those areas…. We leave them more time to be even better on the sales floor and in the install bay,” said Elliott.
Suppliers such as Aamp of America and Hushmat applaud the groups for promoting best practices at retail. HushMat said its business is up substantially with MESA members over last year.
Source: CEoutlook
“The problem is in 90 percent of cases, the retailer doing $250,000 a year is struggling with just the day to day financial burden,”
So why help them out? How about, these are the guys that are the true root of the industry and where the real customer service happens. These are the retailers that break their backs and bust their asses to make things happen for their customers. Then, they are asked to compete against some big box with deep pockets and, oh yeah, a group that does marketing work for them. Those companies should spend a day in one of the smaller retailers stores and see what customer service is really about and how they relate to their customers. At that level, the customer isn’t just another number, they actually have a name and probably even know the name of the sales person they are talking to. This would also be a great opportunity to hear all the complaints that people make about the poor customer service they received at one of those bigger retailers. Would be a real eye opener for them.