Home Automation Podcast Episode #14: An Industry Q&A With Deborah Smith
What happened to selling high-end audio?
This week's home automation podcast features our host Ron Callis interviewing Deborah Smith. Recorded live on Thursday, August 23rd, 2017 at 12:30 p.m. EST.
About Deborah Smith
Deborah Smith of the Deborah Smith Group is a long time industry consultant specializing in helping integrators, vendors and associations with brand and marketing strategy, strategic planning, and long and short term programs for revitalizing custom and retail sales, launching new projects, creating market differentiation, brand development selling more stereo, and implementing recurring revenue programs.
For 14 years, Deborah served as Executive Director for PARA (Professional Audio/Video Retailers Association), producing the association’s annual management conference and creating industry-acclaimed business education, sales, training and marketing initiatives for owners of independent retail and system integration companies.
Prior to PARA, she was VP of Marketing and Purchasing at Tweeter for 6 Years (from 7 – 21 stores), and GM at Harvey Electronics in NYC for 3 years. Smith was awarded the 2001 TWICE Lifetime Achievement Award for Excellence and Achievement in the Consumer Electronics Industry and she received the CEPro Master designation in 2013. She is a regular editorial contributor to CEPro and a frequent public speaker and workshop presenter for various industry groups.
Her company also offers meeting planning, conference design, keynote speaker selection and management training services. In 2010, she helped create the industry’s first ever CE Pro Virtual Trade Show, and developed a wide variety of business education offerings and management workshops for EHX. She was also instrumental in designing and producing the first ELAN Trio Summit event and several years of D-Tools User Conferences.
Here are some of the topics Ron had the opportunity to discuss with Deborah:
- Deborah's background and why she chose to stay in this industry for so many years
- Why the channel has shifted away from selling stereo
Practical tips for helping integrators increase their high-end audio sales
With CEDIA right around the corner, what takeaways integrators be trying for
Ron: Hello everybody. Happy Wednesday. Ron Callis here with another episode of Automation Unplugged. Thanks for joining us today. This is attempt number two our first attempt. We had a little technical difficulty as we do on occasion and so we're giving it a shot here on number two. So I'm going to jump over to our Facebook page over at One Firefly LLC that's Facebook dot com forward slash One Firefly LLC and just going to verify that we have our stream coming in live. So bear with me as I check that out all right. Looks like we're here we already got. I've got a building audience. Thanks everyone for for checking us out. Please like or comment please share as well shared the streams so that we can share this with our our industry peers and our friends. Hey Kendall good to go. Awesome. Thank you Kendall I appreciate that. So without further ado I'm gonna go ahead and bring in our guests today I have the one and only Deborah Smith of the Deborah Smith Group long standing industry veteran and expert marketing consultant. Deborah how are you?
Deborah: I am well thank you for having me Ron.
Ron: Oh that is my pleasure. How's your Wednesday afternoon going so far ? .
Deborah: Very well. Thank you.
Ron: We are always praying to the technology gods. Well we're in this industry doesn't that mean we're always praying to the technology gods?
Deborah: Who knew there was a religion? .
Ron: Who knew it was a religion? Exactly. So Deborah you are the President of the Deborah Smith. Group and I know that you have a long tenured history in this industry and a lot of experience to pull from. And I know that I want to take the conversation today into the art of selling audio but before we go there do you mind just giving my audience a little bit of your background and experience and what brings you to where you're at today?
Sure. So I started way back as a salesperson at Tweeter when Tweeter was 3 stores in Cambridge Mass. And selling on the floor. I became a manager at one of the stores and then I moved to New York City to go to film school where I worked at one of the hardest most prestigious high schools in the country on 40 and Fifth Avenue Harvey electronics and after school it really was. That was where most of my retail education happened. Being Sales Manager Operations Manager eventually general manager and from there I came back up to Boston to Tweeter when Tweeter was seven stores in place to grow to be the Vice President of Marketing and Purchasing. So during the next six years we went from 7 to 21 stores. It was a hell of a ride. Very exciting had in-house marketing. It was a booming time for the specialty audio industry. I learned a lot made a lot of people and we used to go to these conferences every year management conferences with other store owners and we loved it it was kind of stepping back and learning something new about how to run the business not about the gear. So after seven years, they had a hole and weren't doing well and I became the executive director of that group for 14 years and put on conferences and created materials for the..
Ron: What was the name of that group?
Deborah: Sorry, it was called PARA, professional have video retailers association. So as part of that, it was very exciting, it was a time when dealers were growing and everyone is really learning how to run a better business. But we were able to create the same materials for everyone because everyone was the same position in the market needed the same marketing materials, same kind of brands but all of a sudden midway through when surround sound came, people had to go into the customer's home and hang the rear speakers. They had to learn to become contractors as well. So that's a different business model , different marketing model, how to make that a hybrid showroom and custom work and eventually of course it became 80 percent.
Ron: So you were there at the infancy of the the AV guy or the audio guy becoming an installation contractor in the home.
Deborah: Indeed. And in fact what happened there it's so interesting that all these companies morphed into all different kinds of companies depending on the who was working there at the time and what kind of skill sets they had. So some guys got into security some guys got into I.T. some did straight custom, some said I'm not doing any custom, they're not here anymore. It just became so difficult for people to get help because everybody had a different need really but a very interesting time and anyway after that I started my own company to help deal with these kinds of strategies business strategy market strategy and developing a marketing program for integrators. I'll get clients now and I've been doing that putting on helping people put on conferences and kind of finding new opportunities as the market continues to change and shift to help the others find their profit parts to the future.
Ron: Deborah what kept you in this space right? So it sounds like you were brought in right after college. I did not know that. So you decided to enter this space and you know many would consider this a male dominated industry. It could be challenging for a woman I can imagine. What kept you in this space? What was it about the industry that keep chugging along here?
Deborah: Well I got it from music and I was an English major. I went to film school but it always interested me on a bit of a higher level. And so especially at PARA, it was a strategic place to I had vendors, dealers, integrators, and the press and to understand the ecology of the marketplace. And because we were in technology everything kept changing. These people are business owners. Every couple of years the entire landscape, the foundations of their business change. Now we have to sell video. Now we have to sell control. Now we have to learn networking. Now we've got to do this. And if they weren't nimble and most of these guys got in the business because they like the gear or the technology and they were sophisticated business people. So it continues to be hard for people to run the business and make a profit because it's a very challenging industry where we run on very slim profits compared to food and clothing and other kinds of things. And it's always the next thing. So that's what I like , I like to look at things and find a new way. And I write for CE Pro all the time about this. I interview people I listen between the lines and that's really what brought me to this topic because two years ago one of the buyers asked me to do a two day masterclass on how to sell my stereo. And I just kind of like. Well I know how to do that strategy. It's a 10 point plan. I was like what's really going on out there? I'm gonna dig in and find out.
"Audio and selling stereo gear speakers and audio based electronics, that is generally considered high margin product."
Ron: Well I'd like to get your before we go into that and we're going to get there , you know. Audio and selling stereo gear speakers and audio based electronics that is generally considered high margin product. Is that accurate?
Deborah: That's right.
Ron: So if that's high margin stuff and i.e all the different whether they're retailers or C.I. folks they could in theory be making good money selling that gear. Why did did they or why has there been a steering away from focusing on that or is that an illusion? Am I wrong is there. Did everyone stay focused on it for the last 10 or 20 years or did they move away from it. And if so why did the industry move away from it?
Deborah: Well you're absolutely right. And so when I started to prepare for this seminar I decided I want to find out what's really going on out there. Are they selling or why aren't they and why not. So I called 50 people for an hour each , 30 integrators, 20 audio vendors, Vice President , Presidents of the big audio companies. And you know , when you ask a lot of smart people the same questions, you hear a lot of very interesting things and a lot of things they said were all the same. And you go oh oh those are true. But everyone had a little different angle, something interesting. And it wound up being like you know a spotlight reporter trying to really figure out what went down here. So what I came out with very interestingly is that you know some of the things that are all the same. For example, the integral because the price the TV has dropped so dramatically dealers found it hard to justify the price of more expensive Hi-Fi to go with it or some of the higher end brands don't integrate well with Savant or Control4 or something else. Interestingly right now, there are many markets where there is no where where there is a pool line higher end speakers on display. The vendors don't have anywhere there's nobody. So a lot of these guys used to have sound rooms show rooms but most of them aren't using them they're using them as the high priced workspace. So it could be a competitive advantage but it isn't. People find it just too easy to sell Sonos to everybody and just spec in audio like a light panel all through the house.
Ron: What role do you think automation has had?
Deborah: Well that's the key. So that so all of these things are true but by far the biggest problem the biggest reason that people stop selling audio is because they spend so much time learning how to design engineer and install and sell automation control and networking and they're hard because when those systems go down and your customers mad everybody's mad at you that they in learning how to do this they took their eye off the ball about audio and it's almost that simple. There's a whole snowball effect that goes with that. So that wouldn't be so bad except that today most dealers are seeing that in those categories of control and networking where a lot of things are going to the cloud and some of the bigger players are getting involved. There's a real diminution of profit happening there. And when this happens and integrator has to look at your company and go how am I gonna make up that profit? Well guess what? Audio is an amazing way, you may have taken your eye off it but it's there offering to deliver on a large margin. But the problem is it's not that simple to just order in some better hi fi gear and say can everyone please sell it.
Ron: So what are some takeaways? What are some actionable recommendations that you have that our audience which many of them are integrators whether they're owners of integration firms or there might be owners of security firms or employees of these businesses. Can you give some tips or recommendations that they could employ?
Deborah: Well the very first is that you have to take a step back and you have to decide .. Well there are some little tips and I'll give you some in a minute. But the bigger opportunity is to say just like you may have said I'm going to go into lighting control , I'm going to do networks, and you made a business strategy around it and you pick the products and you send everybody to training and you've figured out your sales approach just like that is to take a step back and look at selling more stereo to be a real business strategy for your company. And then that will have a 10 point plan that you'll follow. And then that's how you're really going to make it happen. So you know a big piece of this strategy that I kind of stumbled upon was everyone saying to me dealer after dealer, or audio's dead, you know there's no audio only these big cities where the big dealer can sell it. And right at the end I stumbled upon this dealer who was one of the top 10 Control4 Denver. So it's a great custom guy and he's a rockstar selling regularly 20 30 40 thousand dollar speakers to all ages and sales guys of all ages, has people coming as a destination selling for music and control and he's in a tertiary market in a strip mall in the middle of Dayton Ohio. And it was like huh. So the takeaway for me was you do these 10 steps of a program , you know you've got to look at your product mix and look at your sales staff and just do some sales training and look at a sales approach to learn how to do the demo with a lot of steps here. It's not rocket science you just need to do the steps. But the fact is the market has changed today. No one is knocking down your door to ask for stereo, most of your business comes through builders and designers and architects and they're thinking about lifestyle , convenience, invisibility.
Ron: I have a quick question for you.
Deborah: OK here's the point though.
Ron: I don't want to interrupt, I already did that before I apologize.
"You figure out a way to blow them away with some little level of an audio experience even with headphones and you show them that they can hear the difference between something lesser and something more. And then you also really let them know that when they had this great big wow home theater experience it's not about the size of the TV. It's about the quality the audio and the emotional experience there."
Deborah: Oh yeah. If you want to succeed in this strategy you create your market one tomorrow at a time every single customer you take a minute and you say here's something amazing. Have you ever heard this? And really you learn to do three things with every single customer. You figure out a way to blow them away with some little level of an audio experience even with headphones and you show them that they can hear the difference between something lesser and something more. And then you also really let them know that when they had this great big wow home theater experience it's not about the size of the TV. It's about the quality the audio and the emotional experience there. So learning how to do those three things. And you can do them obviously to do it with the show room, you have a gigantic leg up. But there are lots of different ways you can do this without a show room as well. But those are the three key things that you have to learn to do. Create the desire. Show them they can hear the difference and then have the right product assortment of all the tools have salespeople who are trained. Now there's another big issue right there around sales.
Ron: So do you have the opinion that you need a showroom in order to be effective at selling audio or do you have an opinion that all businesses if they follow these 10 steps that you're referring to could be effective at selling audio?
"Ideally if you really want to sell a lot of stereo the demo is the heart of the sale."
Deborah: Ideally if you really want to sell a lot of stereo the demo is the heart of the sale. And it's when you sit that person down and you've done all the things you have a beautiful room and everything about that room creates the experience and sets the stage and you have picked out ahead of time a two channel stereo or amazing thing and you have them close their eyes and they hear it and they feel it and they want it they love it. You know there's more music being loaded today than ever before and they'll hold the key here is how can they buy it if it's not on the menu? You know they can't. How did they know they want it if they don't know what it is. So you have to figure out a way to do that in the showroom. Great. But let's say you don't have a showroom, in a conference room, all you have is a conference room. You only need to be able to show an AV. You know you can trick out a conference room pretty well and be able to show some step ups especially just between speakers even or cable. And people can hear it and once they hear it, a lot of people go I can 't hear I can never tell a difference I don't need that. Once they hear it , they step themselves up. They see that it's exciting. So you can do it in a conference room you know and then you can do it in a customer's home. And one of the keys here is so simple really but you say it's important like you never leave a sales call without telling them about lighting or about the network. Only now a whole category you're going to talk about is sound and audio. What rooms do you like to listen in? Where's your biggest room? Well here we could just do some in walls but listen to the difference and let's do a better one in the dining room as background. But the kitchen where you entertain we're going to do something good there. Isn't there one room in the house where everyone runs to kick back and actually listen to music on purpose. Let's give you a fabulous system there. So it's seeing it as its own category. And then making it important and making people excited about it in the home everybody after the sale misses a huge opportunity to sit down with the family and bring a bag of tricks. One dealer in the Midwest you know you're sitting around their laptop computer and you play something from iTunes. It sounds like crap. Then you put a little speaker, two little speakers on it, sounds a little better then you put a little fifty one integrated amplifier and two little wireless speakers and it sounds amazing and everyone is excited and they want it and you do the same with your bag of headphones and with your Dax and your everything. And while you're there you can sell two thousand dollars more worth of audio and accessories that are very high margin that will help anything. But going back there was a dealer I was remember in Florida who when you came into that very modest little showroom, there was a little hallway there and that's where people got greeted and talk to them chat with them. Right there, they had a 20 inch panel in the wall and two sets of in walls one hundred dollars each and one five hundred dollars each. So while they're talking to people there they always had a jazz concert on and almost everyone stopped and said sounds great. And you go. Yes it does. But you want to hear something amazing and you switch to the 500 and you're in this little space and everyone goes wow , you created desire. Show them, educated they can hear the difference. And so things like that, get creative and figure out how you can do those three things and you're on your way.
Ron: Now we have CEDIA right around the corner. It's in. What is it? It's in two weeks. We'll all be out in San Diego the whole industry will concentrate into the beautiful Southern California market. And there are a bunch of amazing I know high rez audio products from quite a few vendors that are being released. What's your take and or recommendations on how the integrators and or retailers in our industry. Hopefully some of those that are watching this interview either live on Facebook or on our website should take away from CEDIA? What should they be looking at and what are some of your ideas on how they could incorporate this exciting development that's happening with products on the product side of the equation to ultimately benefit their business? Do you have some ideas there?
Deborah: Yeah. It's actually as much the technologies that are new. And again I go back to this fun analogy of let's say, if it's not on the menu, how can they buy it? You know you have a chef in a restaurant and he goes to the market that you know and finds this wonderful lamb and he makes this fabulous lamb special that week and three days later no one's ordered it. And he decides no one likes lamb but in fact the manager forgot to put it on the menu and the waiters forgot to tell people about it. So at this particular moment in time we have some very fine cool audio technologies we've got in home theater we've got Atmos. It's really fun. Whether you have it in your showroom or you can put it in a customer's house and use that as a showroom to title all the high rez technologies is a wonderful opportunity to be able to show people they can hear the difference in a better you know look what's selling out there. It's thousand dollar headphones it's not unusual for people to be buying seven eight hundred dollar headphones and turntables are having their heyday and vinyl and it's millennials and baby boomers. It's about the music and these new technologies are exciting around the music and everyone loves music. It's just you have to remember to talk about them and get people excited because it is new. And people can hear it and so find those vendors who have those new technologies and some tools for you. And then that really leads to what is really this huge big piece of it which is selling and sales training. It's a really big part of this because unfortunately what happened in this transition from everyone spending all their time on control and networking is that unbeknownst to them, owners started hiring more of those kinds of people who can do controlled foreign programming and Lutron and the baby boomers , the veteran baby boomers some of them could still high sell high-end audio. They're frustrated with the networking they're about to retire. They don't think they may be leaving and no one taught these newbies, these young technology guys how to sell audio, how to do a demo , how to make people excited, so they don't get it. They are the ones specking the inmwalls. So you know there's an opportunity here too. First of all , think about real sales training relationship sales training program. But you need the right person the right personality and outgoing naturally during this person. So give them sales training and then hire these other guys, the programmers and the installers and give them the product and technology training.
Ron: Who's going to do this though Deborah? To my knowledge I don't know of many resources where integrators or just people that makeup all the shapes and types of firms in the space can go to say I'm going to send my salespeople here or even I'm gonna get marketing counseling over there. Does your firm do that for businesses and or what are your recommendations as to where they could go?
Deborah: Well I can certainly help any company talk through all the different places to see what's right for you. For some people you don't have the right people. Let's talk about getting a sales guy and not all technical guys. Well once you have the right sales guy there is wonderful sales training available. Sandler is fantastic and they're just wonderful success stories out there.
Ron: So what was that, Sandlers?
Deborah: Sandlers. I actually have a deal for my customers and anybody can call me and I'll give it to you. They're all over the country but it's a very good relationship based selling skills program. I wrote an article in CE Pro last month about a dealer who completely bought into the Sandler and especially when he wanted to promote his VP to be, who was an engineer hated selling, hated small with customers. He said you want to be VP in my company , you're going to Sandler sales training and kicking and screaming, he went. But you know what? He loved it because it was a system for selling and engineers like systems. And so it was fantastic. But the best takeaway here is borrowing from the tech industry. Get the right person who can sell and train them, get the right technology guy, train him. Send them together on the sales call. That's what the tech software companies do. The account guy makes the report , the relationship uncovers the need and there's the technologist to go we can do this or not do this or do that. And now the salesperson isn't overselling things and promising things you can't deliver or the technology guy isn't underselling because he never know how to ask qualifying questions. So it really brings me to one of these huge nuggets where if you can take this in today if anyone is listening this is life-changing concept which is..
Ron: If you're out there on Facebook first of all this is where you pay attention. She's about to lay a good one on us.
Deborah: And this is. Stop thinking of yourself as a technology company as an installation company and start thinking of yourself as a sales company who happens to sell technology and then start to look at every touchpoint in your company. And if you really put this in your head you will start to change a lot of the ways you do business. Who answers the phone? How are they answering the phone? Who's doing what? Putting the customer first. It's about sales. We happened to be selling this. But we could be selling that and it will change your life. In fact , you know one thing that every single person can do here today because I have talked so many times and worked with so many people. There are these 10 steps we didn't even say what they are but they are of course. Look at your product.
Ron: I want them to have to come to your website Deborah or attend one of our trainings that's where they get the really good stuff right?
Deborah: That is true. To really be successful , you need to go through these steps you look look at your product assortment. We look at your sales force. We decide which sales approach everybody is going to use. We really look at how everyone's going to do the demo and teach them how to do a demo in the customer's house or is there a store tour? What you can do for marketing? How are you going to do outreach? How are you going to talk about all those things are important and it takes you know looking at a company and making some decisions and even a little bit of investment and time and money. But one thing everybody could do today. Well I'll leave this for very end. Is there anything else you wanna talk about?
Ron: No no no. We're actually getting close to the end now we're at 28 minutes here. So we want to be cognizant of all of our viewers time. So yeah. No hit us. What?
Deborah: What did you want to say I have done this with so many people and even though I mean I highly advocate Sandler will cost you three to four to five thousand dollars per person over six months but you'll make that back in the first month when somebody upsells from a two thousand dollar pair speakers to a five thousand dollar per speakers or can with those real psychology of relationship based selling skills. But what everybody wherever you are can do starting right this second is whatever you sell every day, an in wall. If it's 80 dollars apiece a hundred dollars, is go to that next step up , one hundred twenty-five and never mention the hundred said the exact same thing. Even if you're specking it around the house and do one hundred twenty five dollar in walls. If you always sell the six hundred fifty dollar receiver go to the eight hundred dollars surround sound receiver and guess what? It won't take you one second more to install the two hundred dollar more in wall or five thousand dollar more regular speaker or receiver. All of that falls to the bottom line as profit for the owner as amazing commission for the dealer, the salesperson . Everybody wins the customer gets better sounding music which is a big thing. The salesperson makes more money the owner makes more money , the rep does better , the vendor does better when you sell their higher price things and you have so much more fun in your company when you're talking to people about music instead of lighting control it's just fun and really everybody wins, it's kind of amazing.
Ron: That sounds like an amazing and yet simple recommendation.
Deborah: Everybody can do that starting today , when you hang up you just think about it and say starting today, all day today and this week I am going to just start one notch up from where I always sell and you won't get any pushback. Yeah it's in your room if you want to go further from that. Some skill maybe involved, but you have to be sure you've got the right price point steps in your product mix that makes sense for the customer, you're going to want to learn eventually how to do top-down selling, wow them and then know how to get them back down the mountain but everybody can do this , one little baby step up as a beginning and you'll see the difference in the profit as a taste to what you could do if you really did the whole strategy.
"You are a wealth of ideas and recommendations and I think anyone out there that's looking to make a big impact on their business should reach out to you."
Ron: Deobrah, this has been a lot of fun. You are a wealth of ideas and recommendations and I think anyone out there that's looking to make a big impact on their business should reach out to you. That's my advice. If you're watching Deborah how can people learn more about your services, when can they see you live in a training or environment? What do you have coming up?
Deborah: Well I'm doing a three and a half hour workshop at a new initiative at CE Pro 100 November 2nd 3rd of accelerate audio so I'm doing all of this that we've talked about and much more laid out all the steps. The demo training the whole bit I can set anybody up with this Sandler training by the way that is so excellent. You can do it in person or streaming online and it's excellent. I've found the right guy and that kind of varies out there. You can call me at 6 1 7 7 3 9 9 8 7 7. 6 1 7 7 3 9 9 8 7 7 and I would love to talk you through anything or visit you or I would help you with your marketing or whatever else is going on for new strategies I help people with that recurring revenue and service and maintenance contracts that's another whole thing. It's not rocket science but you just do these things or you can e-mail me at
Ron: Awesome great job Deborah. Deborah thank you very much for carving out some time for Automation Unplugged and to share your knowledge with our audience it's greatly appreciated.
Deborah: Thank you. For having me it was fun.
Ron: All right gang. There you have it. Another episode of Automation Unplugged. It is. What is it? Wednesday the 23rd, 1:10 p.m. If you're watching this live. Thank you for watching. Please share this feed with your friends. Even as we wrap. You could still share this out if you're watching this in replay again. Thank you for watching. Hope you enjoyed it. And we will see you next week with another fun and hopefully informative episode of Automation Unplugged. Make it a great day and make it a great week. Thanks everyone.
Deborah Smith heads up the Deborah Smith Group as a long time industry consultant specializing in helping integrators, vendors and associations with brand and marketing strategy, strategic planning, and long and short term programs for revitalizing custom and retail sales, launching new projects, creating market differentiation, brand development selling more stereo, and implementing recurring revenue programs.
Ron Callis is the CEO of One Firefly, LLC, a digital marketing agency based out of South Florida and creator of Automation Unplugged. Founded in 2007, One Firefly has quickly became the leading marketing firm specializing in the integrated technology and security space. The One Firefly team work hard to create innovative solutions to help Integrators boost their online presence, such as the elite website solution, Mercury Pro.
Resources and Links from the Interview:
You can also learn more about Deborah Smith Group at https://www.deborahsmithgroup.com/