Get to Know the Right Competition
Looking for best practices? Instead of visiting other electronics shops, check out the local Benz dealer.
By Robert Ain
For years, I have been telling retailers about my hourglass theory of the market, and the "suck-out" in the middle of the traditional marketing pyramid.
Interestingly, I recently attended a talk given by the senior management of a retailer that is being squeezed by this suck-out of its customers.
One of the topics discussed was the market research the retailer had performed regarding its customer base. I was very surprised by the research—not by what it showed, but by whom the retailer had commissioned to do it.
It was the retailer's own customers. How unfortunate this was.
These customers had already purchased from the retailer and were probably satisfied with the experience. If this company really wanted to increase its business, it should have performed research on customers who hadn't purchased from it, and found out why not.
The consumer electronics business is growing at all levels, and if you want to grow your top-line numbers, you need to determine what consumers are buying—and if they're not buying from you, why that is.
Most of you already realize that you are really luxury goods sellers; you're not selling to hobbyists so much anymore. As such, two important factors need to be accepted.
First, your customer is buying an experience and will, after purchasing, exit the market for many years. He or she won't stop purchasing consumer electronics, of course, but after the install, he or she expects to have a long life with the installed products. Furthermore, because such customers are not hobbyists, they will not be trading in the components they bought next year for the "latest and greatest."
Second, your competition is other luxury goods sellers—car dealerships, jewelers, sellers of kitchen appliances and any other high-ticket items. So when you're trying to find out what the competition is up to, and how to attract customers, shop other retailers of luxury goods as opposed to other electronics dealers.