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Dealers can no longer simply rely on freight specials,
“sale” pricing and a good staff to move product and stay
afloat.
It takes a combination of strategies.
The proliferation of music lesson programs around the
country is evidence that many retailers cannot make
margins on retail sales alone (even big-box stores offer
in store lessons now). Yet for various reasons, including
economic, they are finding it tough to generate students
to make up for the loss in sales.
Three years ago I put together a retail plan, what I
considered a “facelift” for MI, that subsidizes the costs of
equipment (drum sets, keyboards, basses and guitars,
etc...) to the student in return for a lesson term
commitment to our lesson programs. It has been the
subject of articles in UK trade magazines, as well as the
cover story for Music Inc.‘s July 2013 issue. It has
worked amazingly well for my locations.
So well, in fact, that we
now have $75,000 $80,000 at any given
time on contract.
How did I come up with
this idea?
I copied another
industry that already
has it figured out.
Cell phone manufacturers realized a long time ago they
could move more units through subsidizes to the customer.
For me, I did not have to do deep training for my staff or a
lot of training to the customer. They have already been
“trained” by the cell phone industry to understand how it
works.
What if the MI industry introduced drum sets where the
prices hover around $599 retail for a decent entry-level
drum set with decent cymbals and hardware.
Consider this:
The number one issue I hear from parents, and in some
cases the student, is the upfront cost of instruments.
The second hurdle is the lack of commitment from the
parent. “I don’t want to put a lot of money in this until
little Johnny proves he is serious about playing guitar”.
Would you send little Johnny on the soccer field with
cleats a half size too small and a half inflated soccer
ball?
Economic situations also come into play.
It’s a vicious cycle:
Many families in this country simply can not afford quality drum sets,
guitars and amps, but parents want to see some unattainable goal before
they “commit” to purchasing a quality instrument.
So the student is forced onto a second rate instrument that creates more
problems in reaching the “goals” the parents want to see.
What is the commitment point of the parent?
My program solves many of those issues, and I’m not sitting on the same
inventory month after month.
1. Order/Stock
Products
4. Manufacturer now moves
twice as many units annually to
that dealer, and you are a retail
God!
Benefits:
•sell more picks, sticks, strings and
accessories to that student over length of
lesson contract
•your inventory is no longer a museum
piece hanging on your wall month after
month
•be a hero because you saved lots of local
families money
•all of the above
Progressive
Music
Center’s New
MI Retail
Model
3. Equipment is now even more
affordable to more people, and
you can “upgrade” the customer
to intermediate lines. Students
start lessons immediately, dealer
moves more inventory.
2. Select products are available for
special pricing with a 12-, 24- or
36-month LESSON commitment.
The cost of the equipment is
subsidized and margins are made
over 12 months of lessons. More
expensive equipment is eligible for
longer terms, 24 and 36 months.
Benefit: Lesson Program
gains students for longterm, teachers are
employed and students
have quality equipment to
learn on.
You will need a few things in place to make
this program work for you.
1. Lesson Program
2. POS System Must Be In Place
3. Price Tags
4. Trained Staff
Thank You For
Attending
iConsult.
billy@RaleighMusicLessons.com