By James Chevrette
Sound Innovations in Lawrence, KS transformed car audio events from a loss leader into a profitable marketing channel by changing one key perspective.
Many store owners question the value of hosting events: “Why hold an event for people who already have their gear?” Sound Innovations found an answer in offering competitors a full store credit equal to their entry fee,” said the shop’s Scott Williams. This simple approach has yielded a 40 percent rate of converting competitors to customers.
“We genuinely find that competitors want to improve their cars, and by offering the credit, we can showcase our store, start a conversation, and sell them labor and products,” said Williams.
The Math Behind the Strategy
Williams broke down the economics: “If we place Facebook ads, radio, or social media advertising, it’s very hard to calculate your return unless you really manage the parameters. A contest costs us $750 in sanctioning fees, judges, and trophies with 20 competitors. If we get 8 competitors back in our store (roughly 40 percent), these 8 competitors will be back for our next event, giving us a head start to recuperating our event costs!”
The benefits extend beyond immediate sales. “Even if the competitor uses their credit towards labor, we get the sale of the parts and vice versa. But what really matters is the face-to-face time we get with customers and their vehicles. We get to connect with competitors, even if they’re DIY enthusiasts or purchased their products second-hand or online.”
Converting Competitors to Customers
Sound Innovations charges $400 for a DSP tune – a service many competitors need but don’t fully understand. “Many competitors have a DSP but don’t know what the judges are looking for or how the music is supposed to sound,” Williams explained. The shop offers a tuning session, guided by the judge’s notes from the scoresheet and spends 2-3 hours with the customer at a discounted rate. “But now we have our ideal customer in our store with our staff,” Williams said.
His goal is 1-2 jobs (systems) from every show, which the store easily achieves. “We view our shows as direct advertising to our ideal customer,” he said.
As a bonus, these events generate valuable digital content for social media, allowing Sound Innovations to repurpose event footage and photos long after the competition ends.
“This simple approach has yielded a 40 percent rate of converting competitors to customers.”
The 40% conversion rate sounds solid, but the real question is profitability. Are those customers actually spending enough beyond the store credit to make the events worthwhile, or is there a risk that people are just cashing in on the credit without generating real margin? When you factor in the full cost of hosting the event and the credits given out, is there actually enough extra profit to offset the expenses? I did something similar about 5 or 6 years ago, and even with decent turnout, it still ended in a clear loss once everything was accounted for. Also, how do you know these are truly new customers who wouldn’t have come in anyway? Is there any way to separate organic buyers from those who just saw a chance to grab something free, which might make the conversion rate look good on paper but ultimately hurt profitability? As we all hopefully know, a higher conversion rate doesn’t mean anything unless it has the scaled profit to go with it. Based on my own past experience with this kind of setup for similar events, I’m thinking tighter conversion and profit/loss tracking would be worth implementing.
Good idea!