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Are A/V Manufacturers Doing Enough to Drive New Business?

Paul Wilson wonders if manufacturers are helping to promote new business…

Sales and sales promotions have taken place for as long as commerce has existed. Anyone selling something needs to stoke the fire every so often and the best stick to stir the ashes is a sale. We see them all the time and not always in the form of a discount. My grocery store routinely has a buy one get one, and sometimes two, for free. These promotions are very often called a “lost leader” only because the profit may be negligible, but doing so brings in buyers. Hopefully, anyway. 

AR-BigSaleSmallFormat.jpgAudio manufacturers don’t especially run sales in the traditional sense. In some rare instances, I’ve see a few products “marked down” for some reason, usually to clear out inventory on soon to be outdated equipment. Such sales, however, do not happen often or with great frequency. 

A reasonable question would therefore be – in the ever changing high performance audio landscape, are manufacturers doing enough to inspire customers to take the plunge on something new? If promotional, or possibly an aggressive sales campaign were to occur, would it help buyers pull the trigger with greater accord? Or conversely, would doing so tend to create a negative viewpoint among customers of having the attitude – “why don’t you sell it at this price all the time?” Because when marketing something to a customer base, there are almost certainly positive and negative viewpoints when changing pricing or creating some type of promotion to increase market penetration. Another question, are manufacturers so resolutely convinced of their pricing structure that they strenuously avoid sales? 

One approach that has been successfully used among manufacturers is a credit for the previous version of equipment. McIntosh is, at the time of this writing, offering a trade in value of up to 75% of the original purchase price towards a piece of new equipment. So if that last generation amp sold new for $5000.00, McIntosh will offer a trade in value of up to $3750.00 for the old component for the purchase of the newer version. Nordost had a similar promotion a few years ago and for anyone using their cables, particularly the supreme reference level products, such a discount would be immensely enjoyed. 

AR-McIntoshTradeInValue.jpgThese type of promotions enable the customer to save some of their purchase cost on something new, allows manufacturers to keep production operational, generate cash flow, clear out inventory and of course, the all-important paying the bills. Might there be other ways manufacturers could inspire new business? Because one thing is for sure, when you are building a thing, it is vitally important to entice the customer’s inclination towards the purchase of something new. 

Sometimes, new business occurs simply because the new product is demonstrably superior to the previous model. Maybe the previous amp sold for $10,000.00 and the newer version, vastly better in every way, is selling for $15,000.00. If the capabilities are double that of the previous version, then convincing oneself to upgrade might be easier – providing an upgrade was even being thought about. But if that same newer version, so incredibly better than the previous one, only sold for $10,500.00, would that make the decision to buy it easier? Would it be even more of a simple decision if the cost for the new version was identical to the previous one? What about slightly less? Would that add an additional spark to making a buying decision? And if it were less, would that create an interest in a new purchase where one did not previously exist? 

There are those who feel our industry is doomed – first to mediocrity and then to failure. There are others still who are firm in the belief our industry is chumming along just fine. If so, and I steadfastly believe it is, it would make sense, and would possibly help new product to be sold if there were more incentives. 

AR-SalesPromotion.jpgBesides the trade in value incentive, there are others. Some manufacturers choose to sell direct in some capacity. Maybe they include a dealer, maybe not. But when the business model has always supported sales through dealers, buying direct from the manufacturer has a certain appeal – this even if the pricing is the same or even more. Other manufacturers allow their products to be tried out in the customer’s home for some time frame and if not satisfactory, the product may then be returned for full credit. This is a very wise policy because a final decision can be more easily made. Deciding to buy a component based on how it sounds at a dealer’s shop or an audio show leaves the buyer with a certain amount of trepidation. Doing so always imbues uncertainty of how the thing will sound in a buyer’s room, in their system. Trying something at home before making a final decision always yields sonic certainty. 

There are those manufacturers who will seldom, if ever, discount their products. Because of historically strong name brand recognition, and a legacy of world class products, such manufacturers see no need for discounts. They typically also see no need for aggressive pricing. Those manufacturers will very likely remain strong because of a stellar reputation and a history of excellence. In short, they probably don’t need to discount. How many close out, year-end deals have you seen Ferrari run? I’d bet somewhere between zero and not many.  

AR-Ferrari444555.jpgMaking a decision to buy a new piece of audio equipment is one not easily made. Almost regardless of the cost, deciding to commit to an additional expense for something to play a song may be difficult to easily make. How we resolve those decisions are based in part on how much we want the new whatever. We can talk ourselves into buying most any audio component within reason if given the time. What will always make the process more palatable is if there exists some measure of an incentive to take the plunge, to pull the trigger, to bite the apple, to up the ante, to sweeten the pot, to, well, you get the idea.

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