Ed's AV Handbook.com
Home Theater & High Fidelity Stereo Audio
AV Business & Marketing
Batting practice for the audio/video pro and a primer for the novice
- 2 - 3 - 4 - 5
The Marketing PlanReadjust your business/market scope to the spheres of business that you can and must absolutely control. They are the 4 P's of marketing: place, product, price, & promotion. The 4Ps frame the business strategy and provide its implementing tactics.
The Four P's of Marketing
Where are your customers?
Literally map where your customers reside.
Where do your customers trade?
Map the locations where your customers make their purchases.
Choose and map your business location:
Can customers find you?
When they do, what will they find?
9 steps to placeThis 9 step process defines trade area boundaries, locates its trading areas, describes its demographics, and selects a brick-n-mortar home. But before we proceed let's reconfirm three definitions for clarity.
1. Trade Area - the total geographical area in which your customers reside.
2. Trading Areas - locations within a trade area where the action of trading takes place.
3. Location - the address you select to trade in a trading area.
Step 1 Trade area map
Print a map of your prospective trade area with streets, major geographical features, and census tracts. Select this link to U.S. Census.
Step 2 Trade area barriers
A barrier placed between a customer and a retail location impedes their travel. People are inclined to avoid barriers. They tend to drive to a location on their side of a barrier, even if a convenient bridge or underpass is present. Highlight natural or man made barriers within the trade area that impede travel to trading areas; this includes rivers, freeways, rail-road tracks, airports, mountains/hills, etc.
Step 3 Local routes
Seek and highlight popular local routes within the trade area to churches, schools, local government, post office, grocery stores, competitors, malls, commuter highways, hospitals, ball parks, and other key destinations.
Step 4 Center focus
Select a feasible prospective location situated on a local route between your customer prospects and the competition.
Step 5 Circular mapping
Return to your trade area map. Draw a series of circles (feasible location at the center) with radii of 1 mile, 2 miles, 5 miles, 10 miles, 15 miles, 20 miles, and more if desired.
Step 6 Data spreadsheet
Return to the U.S. Census at https://www.census.gov/2010census/popmap/.
Search for -- and create a spreadsheet list of -- the trade area census tract data within the circled area as follows:
1. List trade area census tract numbers in the first column.
2. Add the following demographic headings:
- # of households,
- your targeted income groups
- your targeted age groups
- if relevant - your targeted gender
3. Insert the census tract data for each demographic.
Step 7 The guesstimate
Add this column heading "%" to the spreadsheet.
Inspect the census tracts within each region created and bounded by the 'circles'.
Given the trade area barriers, your local route knowledge, and distance from the proposed location - guesstimate the % of households that will choose to travel from each census tract toward the proposed location versus competitors in the opposite direction.
Insert your guesstimate into its '%' spreadsheet column.
Step 8 The factored summation
Return to the spreadsheet. Add an extra column next to each demographic.
Multiply each census tract demographic by the results of step 7.
Enter each result into its extra data column.
- (population) x (Step 7 results)
- (# households) x (Step 7 results)
- (income group) x (Step 7 results)
- (age group) x (Step 7 results)
- (gender) x (Step 7 results)
Sum each 'extra' demographic column.
The totals of each 'extra' column are your exclusive trade area demographics.
We're almost home.
The boundaries of your trade area are drawn. Its trading areas and local routes have been identified. You have a clear demographic sketch of your customers. Now secure the location.
Step 9 Head them off at the pass
Next to committing money to the business, choosing a retail location may be your
most taxing business decision. In addition to its indoor practical functions, a retail
location via its store front can also become your most productive promotional tool.
The best locations are positioned between customers and significant competitors.
In effect, their store front signage 'heads them off at the pass'.
This better location will cost more than alternatives. But it will deliver a competitive edge that alternatives can only offset with increased promotional expenditures; a cost typically much higher than the difference between a lower cost location and a better location. With the previous three paragraphs in mind -- reconfirm the budgeted rent outlined in the operation expenses of your trial profit & loss draft. If needed, entertain the idea of reallocating budgeted promotional funds to rent.
Enlist the guidance of a seasoned local Realtor who knows the local travel paths
of the trade area. As a rule, they are the gray haired agents at a rear desk in a real estate office. Present the agent with a list of your qualifying needs and wants. Include your budget for rent or purchase.
A good real estate agent is a sufficient. But also speak to other retailers in the trade area. Take drives from different points within the trade area to the proposed location.
If your inquiries support your trade area data, and the location is within budget, secure the location with a lease or a purchase.
If purchasing is an option, carefully consider its long term commitment. It's easier to move from a lease than move and sell a location. On the plus side a purchase is an expense that transforms into an asset.
Hire a lawyer to review the purchase or lease document before you sign. If a lease is the choice -- keep in mind that a lease is a negotiable document. Seek five years terms with the option to renew. You may even consider writing and proposing an alternative. But be reasonable. Eliminate what you cannot afford. Include what you must have. But keep in mind - a lease is a legal contract that you and a landlord will have to abide by for many years. When an agreement is reached, sign the lease.
Define your product or service.
What are (and list) its competitive edges?
The product is you
As an AV Pro you deliver and install toe tapping mesmerizing audio and video experiences derived from your knowledgeable mix of product, physics, electronics, acoustics, light, music, and film. Essentially you are the product. Therefore revise the product/service that you described in the 2nd paragraph of this chapter and add yourself to the description with enough swagger to 'strut your stuff' while falling just short of showboating.
What will your customers pay for your product or service?
What will you charge?
A price strategy for AV ProsPrice is an apprehensive bipolar subject for many AV Pros. They fear customers will walk if they don't offer deep discounts. They fear they won't be able to pay their bills if they do. Price can determine whether profit is maximized, profit is left on the table, or customers walk. The following outlines a strategy to triumph over this apprehension. It is based on an old retail proverb that remind us, "You don't have to drop your drawers to close the sale.
Price as a screen
As an AV Professional your knowledge and skills place you in a fortunate position.
You can target a demographic that assumes they will pay a premium price for premium products and services. Use this premium position as a qualifying tool to inform this group that you are the place for a better and best result, which in effect screens out those who cannot afford what you offer. But there are some qualifying limitations.
I was involved in a retail customer survey that revealed selection then price were our customer's predominant concerns. Customers wanted enough selection to believe they could make an informed choice. They then wanted to ward off having a neighbor tell them they could have purchased their box for less elsewhere.
The following offers a strategy to alleviate customer surveyed concerns while also easing AV pro apprehensions with a bundle of selection, price, and you.
Do not hide inventory in the back room. Put it on the sales floor. Customers will assume there's still more in the back room. If feasible place empty boxes on high selves around the perimeter of the floor. The boxes will appear full to customers. Similar to the 'boxes in view' tactic, offer 'one up/zero back'. That is; display at least one unit of many AV brands. It will be assumed you carry the entire line of each brand displayed. A room full of 'one ups', an inventory crowded floor, plus the 'empty-assumed-full-boxes' will diffuse customers concerns regarding selection.
If you do not have a retail location (you work from a garage and truck) you are at a promotional disadvantage. However, as part of your presentations -- use a binder or iPad
slide show with photos of your favorite installation and available products. That may be enough to support an appearance of selection.
Address the concern of price via a deep discount (at a loss if necessary) on ONE essential high profile box: a large screen UltraHD TV, projector, AV receiver, power amp, etc. This price will serve as your declaration of competitive pricing which in turn gives your customer the negotiating win they need to hang their hat on when that nosy neighbor shows up.
Price the balance of the project at profitable margins. It's a win win.
Account for yourself
You are not in the business of selling 'big-box fast-food' audio and video cartons.
You offer customized musical and cinema experiences. As a fine restaurant menu that does not itemize each ingredient and stir of the chef's spoon; I feel safe in assuming that your proposals do not currently and literally account for your knowledgeable mix of product, physics, acoustics, light, music, film, and years of experience. Well, it's time to change that.
From this day forward, place yourself as an itemized line in your project proposals.
- Line item #1 - You with a one or two line AV bio description:
Avid audio/video professional delivering customized musical and cinema
experiences for 20+ years at a competitive price.
- Line item #2 - The essential high profile discounted box and its price.
This is your declaration of competitive pricing.
- Line item - List each remaining electronic component with a block price
that includes all interconnects and miscellaneous parts.
- Line item - List the speaker system as a block with a block price
that includes all speakers, cables, and miscellaneous parts.
- If the project includes a whole-house system, Line item - each room/area
as a block at a block price that includes all components, speakers, controls, cabling, etc.
- Line item - the project installation in several blocks that includes:
- Trim out
- System delivery, rough-in staging and setup
- System calibration - video and acoustical calibration
plus finishing touch ups and adjustments.
- Customer instructional walk-thru
Some will insist on a more detailed itemized proposal in an attempt to have a competitor 'cherry pick' and beat your price. If this is the case, tell them no. Walk away.
They do not value your knowledge and skill. They will not produce productive leads.
Do not allow this prospect to divert your scarce time from those who value what you do.
The absolute bottom lines
Expunge the apprehensive bipolar symptoms of price. Pick up those hard earned dollars formerly left on the table. Resolve the perceived obstacles of price and selection. Exploit your competitive edge of delivering mesmerizing toe-tapping audio and video experiences that cannot be found in a box of any size. Do it with a strategic bundle of selection, price, and you.
Engage and tell your customers who you are, offer your product/service, and close the sale.
Begin with a message that emphasizes the competitive edges of your place, product, price, and staff. Compose the message with the assistance of this classic promotional advertising acronym - AIDA.
- Get your customers Attention (scream & wave),
- Then their Interest (highlight their want),
- Create Desire (offer a taste),
- And request Action (ask for the sale).
Confirm that you are who the message claims. If you're not, you will be perceived as dishonest. That will kill your plan. Therefore, carefully reevaluate and revise your message until it is absolutely authentic, relevant, clear, and concise. Then include this message in all of your promotional efforts; keep repeating it over and over and over and over and ......
Commit a fixed % of sales to a promotional budget. Then choose from the four promotional options below. Allocate your budget per selected options.
Allocate your annual budget and promotional choices to the calendar on a quarterly basis. This is your promotional plan for the entire year.
You have established a compass heading -- your customer. You have scoped the economic/market landscape and produced a marketing plan. Now put your plan into action.
Business & marketing plan status
The words advertising and promotion are too often incorrectly substituted with the word marketing.
Advertising and promotion are subsets of the 4P of promote. Promote is a subset of marketing.
Marketing is a business strategy plus its implementing 4P tactics of place, product, price, & promote.
|Ed's AV Handbook.com
Batting Practice for the AV Pro and a Primer for the Novice.
Copyright 2007 Txu1-598-288 Revised 2018