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return on investment, you've got a tremendous amount
invested and a small return. I see dealers wanting exclusives, they want
protection, and they're willing to take two or three lines and really go
to work with them instead of carrying everything." But Lovell observed
an unhealthier situation, "I'll tell you one trend I see is music
stores going broke. In our area alone we've had four or five shops in five,
years go out of business, most of them combo shops. I don't go for my competitor's
throat but we are extremely competitive."
Because of its size Strings & Things can afford larger,
more effective advertising as well as offer a wider range of products than
a small store just opening up. But this store still bases its success on
the old standbys-service and product knowledge. "Price doesn't really
do it that much here. I could run Peavey at 40% off and I wouldn't sell
a ton of it. In our area it's not how cheap you can sell it, but how aware
you can make the public of it. It seems that we do better with clinics,
displays, and sales aids,
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and intelligent salesmen that have a lot of product knowledge,
than by slashing the price.
"I can spend $2000 put-
ting a big fat ad in the
newspaper and not get
near the response I get
from a mailer."
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In a larger city where you have maybe three to eight
million people, you have people out there that are ready buyers all the
time and they're just looking for the cheapest price. Many times in Memphis,
we have to show them what a Fostex four-track recorder is and how it works
and how you employ it with a Rockman and a digital drummer. Then they buy
it.
"I would say we work for our sales harder than your
average store. We really have to do a lot of educating, plus we actually
put monthly notes on about every product in the store. We push retail financing
like mad. We don't finance it ourselves, we do it through a finance company
on a non-recourse basis. A lot of the
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products are something people just don't have to have,
but when they see a polyphonic synthesizer sitting there for $45 a month...
Even the sales flyers and newsletters that we print and mail, almost
everything, even items for $200, have got a monthly note on them."
"Right now our mailing list has about 6000 names
and it's incredible," he continued, "I can spend $2000 putting
a big fat ad in the newspaper and not get near the response that l get
from a mailer that l spend maybe $300 or $400 on. It's going straight to
the exact people that really care, that really are our customers. I think
it was a major revelation for us to realize that direct mail far exceeds
what we could do on the radio and in the newspapers. This mailing list
is probably 75% of the people that are going to spend money with us in
the next 12 months anyway."
Recently, Strings & Things held a closed-door sale
promotion which, though not a revolutionary concept for a sale, 4
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grossed $40,000 in one day from about 1000
invited shoppers (an average day grosses $6000-$7000).
"We had 'special invitations' guards at the door,
windows papered up, a good letter, and prices that were truly cheaper than
ever before. The whole thing is believability, you have to make people
really believe that the stuff is cheap, that they can't get in without
a ticket, and that it is not for the public. Once they got to buying it
was better than Christmas."
Lovell plans to have two closed-
door sales a year during the typi-
cally slow sales months. As he
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Tom Keckler, shop foreman, Lovell;
and Charlie Lawing, president
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stresses, "It's better to have
a non-
profit month where there was a cash
flow than a non-profit month where
there was no cash flowing. At least it keeps all the avenues and doors |
open." The Memphis retailer
went on to explain one of his survival philosophies for 1980s economics.
"I see a lot of stores that won't diversify, which is another way
to survive. I see guitar shops that don't carry p.a. gear. If you're going
to rent the space, call yourself a music store, you should carry everything
that you could possibly sell. Who 5 |