Home Automation Podcast Episode #181: An Industry Q&A With Tom Farinola
In this weeks home automation show of Automation Unplugged, Tom Farinola, Visionary at Atlantic Home Entertainment and Stereo shares the importance of communication between the client and the dealer and lessons learned over 35 years in business.
This week's home automation podcast features our host Ron Callis interviewing Tom Farinola. Recorded live on Wednesday, August 4th, 2021, at 12:30 p.m. EST.
About Tom Farinola
Tom Farinola is a hobbyist turned integrator whose life's mission is to provide audio-video solutions to as many people as possible. Tom purchased Atlantic Home Entertainment & Stereo as a hobby back in 1990 and has since grown the business to a steady $4 million a year in annual revenue. Throughout the years, Tom has discovered that the key to success is providing excellent customer service. To help ensure his customers are receiving the best support, Tom established a remote service called Atlantic Concierge Partnership.
- How Tom navigates the worlds of retail and custom integration
- The importance of communication between the client and the dealer
- The lessons learned over his 35 years in business
- Tom shares his passion for Steinway Lyngdorf and describes how he delivers the experience to his clients
Ron: Hello, Ron Callis here with another episode of Automation Unplugged. We are here for Show #181. Today is Wednesday, August 4th. It's a little bit after 12:30 p.m. Eastern Time, so this is our normal day and time. Today, our guest is Tom Farinola. I've actually gotten to know Tom over the last few months. And I think we're in for a world of fun here. Tom's been at this game for a long time. He knows everyone. He knows all the brands. He knows all the selling techniques and methodologies. He has a really fun perspective on automation, integration, high-performance audio, and growing a successful business in that high-performance audio domain. Without further ado, today's guest is Tom Farinola. He's the Visionary at Atlantic Home Entertainment and Stereo out in Southern California. I'll bring him in, and he'll tell us exactly where his location is and where we're going to meet him here. Let me go ahead and see if technology is behaving. It does look like we are streaming live here on Facebook. Click one thing here just to make sure technology is fully behaving. I do see people are joining us, and it does look like we are live on LinkedIn as well. If you're out there and if you're out there in Facebook land or LinkedIn land, don't be shy. Give us alike. If you feel so compelled, drop us a note. Tell us who you are, where you're coming to us from. If you want more of your friends around the industry to see the interview, then share it. I would be forever in your debt. Tom, how are you, sir?
Tom: Welcome from Southern California. It's snowing here, though. Don't let that bother you.
Ron: I don't buy it. I don't believe it's snowing, Tom. Tell the audience a little bit about your role in Atlantic Home Entertainment, and where exactly are you guys located?
Tom: Located physically in Costa Mesa, on the cusp of Newport Beach. Most don't know where Costa Mesa is, but they know where Newport beach is. We're like right on the border down there.
Ron: Know I've been in that area once or twice. Is that near Dania Beach or in?
Tom: That is Dana Point about 30, 40 minutes further north. About forty-five minutes south of LAX.
Ron: You have a physical store. You're back in your private office, but you have a physical store. Tell us about the store.
Tom: The store has been around since 1959. See, as far as I know, I think it's the oldest standing brick and mortar store in California. Its original name was Atlantic Music back in the early late 50s. Because there was a Pacific Stereo at the time, the original owner was Ralph Yeomans. He's passed on now, but he owned a company called Sound Craftsman. Some of you might remember that name, and he created Atlantic Music. Everybody always asks me, "How do you get Atlantic?" I tell people because I'm from New York. They go, "Oh, well, I guess that makes sense." I said, well, that's not the truth. The truth is that it was actually on Atlantic Boulevard in a city called Long Beach. Back in those days, you had a lot of yellow page ads. It mattered if you were "A." It gave you different positioning in the book.
I remember when we had the Yellow Pages back in the day. That was why it was called Atlantic. Then he wanted to get out of that area. He opened up a second store in Costa Mesa. That's where the two stores came from. We eventually shut down the store on Atlantic Boulevard, Long Beach, and kept the one in Costa Mesa. Some of you might remember that pre-Costco days, it was called Price Club.
Ron: My family was a member of the Price Club. I remember that as a kid.
Tom: There you go! Yeah, well, back in the day, before Price Club, there were GEMCO and FEDCO stores, and they were like a club membership. Ralph, a visionary in his time, created the very first facilities management. He was the audio-video department in those stores. There was a company called Coston that he actually owned as well. He sold all the things that didn't sell in those stores to Atlantic Music in Costa Mesa. As it evolved, those stores shut down, Costco came on, and here we are. That's how the store happened to be planted in Costa Mesa and L.A. for years. It was called L.A. somewhere in the 70s. It changed to Atlantic Stereo. I bought it in 1990. That's a story upon itself how I ended up buying the company.
For years nobody people go up and down the street, and they go, "Stereo, what does stereo mean?" They would come in and say, do you do car stereo? No. Stereo means nothing to people, especially now. I have long-time ties with a good friend of mine named Mark Mendelsohn. At the time, I used to work for the Kerkow Home Theater Group, which evolved into the Robb Report. I wanted to change the name to Atlantic Home Entertainment, and I kept stereo.
Ron: Sentimental value.
Tom: I'm very sentimental. You can probably get around my office. I don't know. But you can see artifacts from Tom's world, Tom's life from age, practically before Tom's world to Tom's world. I've got everything. Wherever my eyes land, it has a memory.
Ron: What were you doing before you purchased the business? That was in 1990. So I'm going to use that as a pivot point. What were you doing before that, that you became aware and decided to purchase and then bring us forward from there? Let's go into the past and then from 1990 to the present.
Tom: In 1978, I had to exit Iran. I was living abroad in Isfahan, Iran, working for a company called Groman Aerospace. If you remember, the hostages were taken in '79. All the American families had to leave Iran in 1978. I had landed in California, and I was 21 at the time, and I saw I was looking for a turntable or something, and somebody said, "Oh, there's a little store over on 17th Street and in Costa Mesa. That's where you got to go." I went to this little store called Atlantic Music, and I started buying my products or my hobby starting in 1978. I continue to buy from Atlantic Stereo throughout the 70s, the 80s, and the kid that worked at the store once said, "With everything you're buying, just buy the store."
A light bulb went off in Tom's head. I could buy the store and play with all the equipment, and then when I'm done playing with it, I could sell it. It is a perfect concept. All my friends who own businesses of all various types said, "What's the PNL look like?" The balance sheet. What's that? OK, you don't want to do this. You do not want to buy a company like this. Obviously, I listened to them, and I bought the company. I became a partner with Ralph Yeomans at the time when he was alive. I used to have two cars before my normal job was selling high-end or commercial-grade printing presses in the hole for corporations for AM International. I think they're gone now. But I was selling Arco and Douglas and Boeing. I was their top salesman in the country. 500 sales guys. Anyway, I was very secure there was doing very well. I just have a business card. One side said President Atlantic Stereo, and the other side had my salesman hat on for selling printing presses. And I would I played this for a couple of years until my other company said, Tom, I think it's a conflict of interest. Your sales have gone from top to zero. I think you need to move on. I didn't want to move on. I was very content having a salary in a car and all that kind of stuff.
Well, needless to say, I jumped in with both feet, and I was like, oh, my God, I have a store with employees and overhead. It's a whole different ballgame. Somehow I did it. People say, how did you do it? I don't know. I started using my professional selling skills back in the day, ingrained with what they call a Xerox had a selling program. You learn corporate. I took those skills, and I put them into Atlantic, and it was right at the cusp in 1990-1995 when systems started to evolve. We broke from the ranks of selling stereo two channels to home automation or entry levels of distributed audio. I took the sales skills, features, and benefits return on investment, which a lot of it was my old world, and started showing it to people, the average consumer, how to have a return on investment and what they were spending money on. Sales grew, and business started to grow. I think the changing point was right around 2003. Many brick-and-mortar stores started to see that it wasn't very profitable to be a retailer. The inventory you had to have people coming in, not buying from you or wanting a discount, and many stores shut their retail. Business is down and evolved strictly over the customer and dealing with builders and interior designers and saying, why do I need to spend four dollars a square foot when I can be in a business park and pay two dollars a square foot? The retail business really isn't very profitable for me. I want to get out of it. And in our industry, the salesperson, a lot of end-users don't realize this, but in the end, the salesperson is not paid by typically a salary.
They're paid on the profit of the sale. This is a catch twenty-two because now you're putting the salesman's livelihood against the client's needs. The client has his own needs and wants, and the salesman will typically sell what's most profitable for himself. That's the business, so it's not about why you sold X amount. That's what you get paid on because that's what it is. There are things in our industry. That has a higher profit margin than things that don't. The higher the value of the product tas, the lower the profit margin. There's a conflict of interest when an end-user client believes in his salesman and gives him a blank check, and the salesman has to choose. Do I sell him? High-profit product. Even though I know, it's not better for the clients and enjoyment at the end. Or do I pay my bills? We have an issue, and that's how that went. What I did, and it's been very difficult over the years, is running a retail store and r high-end custom integration business. Very difficult because, on the one hand, it's project management and keeping track of all the dotting the I's and crossing the T's and having a lot of people with very low inventory. The other one is the opposite. You have very low people with a lot of inventory. It's been a challenge.
Ron: Just to pull the thread on that and state the obvious in March 2020, covid hit. How did that affect the retail side versus the customer integration side? I'm assuming retail took a hit. Maybe people didn't come in for a while, but did integration keep you afloat, or how did the last 18 months play out?
Tom: Actually, the thread is before that in 2008 to 2012. See, that's where a lot of companies went under.
Ron: That's true.
Tom: What covid hit was even worse. But because of the damage that the recession hit when the recession hit and housing went down, all the dealers who shut down their retail stores and evolved to build or design got crushed. They have no one to fall back on. They couldn't go back to the retail business. They didn't have any of their walk-in traffic. A ton of integrators left California and went to places like Austin or wherever seeking to work that. That really damaged the industry. And then things started getting better than covid hit. I don't know many dealers who became bigger on the custom end that still jumped into the retail. It's not an easy progression. It's a very easy progression to go from retail to custom.
Ron: How did that play? Back to the question last 18 months, covid, how did retail versus custom play out? How did that swing or change for you, if at all?
Tom: It didn't help because you couldn't come in and listen. Retail was really coming in and listening to speakers or looking at TVs or whatnot, but you literally don't have that. It didn't affect us as much as you would think it would. I created something which a lot of dealers do. I created my acronym, ACP. Atlantic Concierge's Partnership is the ability to service your clients remotely power cycling, the Apple TV or the router on the modem, or whatever the case may be in many of us. The bigger dealers do it. Everybody is now doing it. I take it another step where we talk about the difference between YouTube, TV, and Hulu TV, which I like, cut the cable cord. Should I stay with DirecTV and cable TV, or do we get into these kinds of questions? I throw them into my concierge program. And I started using many Zoom calls and whatnot to their clients, and they couldn't come to the store. A lot of clients really enjoyed that. Again, it didn't really affect us as much as it would other dealers.
Ron: Big picture, 2021 versus 2020 for you. Is 2021 looking better, or is it the same?
Tom: 2021, originally between January to. April, it was just gangbusters. The phone was constantly ringing on our across all platforms building. Retail didn't really matter. Right around May, the phone stopped ringing. I'm not sure because people are feeling more comfortable, and now they're going to go on their vacations, and they pull back on some of their discretionary income and divert the money that way. But I've seen an uptick now in July, mid-July again, so it's kind of like conventionally, it's always been a little bit on the slow side, March, April, that's tax time. You never know. You don't know what your taxes are going to be. That's generally a slow dip for us.
Ron: Tom, we've got a few people that have given us some shout-out. I want to say hi to our friends at System Design and Integration SDI, and they are saying, "Hi, Steve Alexa and Angel with SDI Boston sending you a hello." Hey, thanks, team. Appreciate that. We have a question here from Sean Sturmer. He says, "Tom, what are your thoughts on the Resi mercial transition?" In other words, I want to say some of the publications have covered this recently, the idea that residential businesses are starting to see more commercials. Do you see any of that, or are you dipping your toe into any of that?
Tom: I've been seeing that for 20 years. I've always said when a residential project does a really great job. It's commercialesque. The commercial has been using racking designs as long as I've ever known it. You walk into a commercial server room. It's all racked. In the residential market back in the 90s, we were stuffing equipment into furniture, drilling holes, trying to get airflow. It was horrendous. It took us eons to show the client the importance of spending a couple of grand for this metal cage that doesn't do anything. You just sit somewhere. That took a monumental change of a lot of the industry. Begging builders and architects and designers to put the equipment in these racking systems because they're expensive to do a good rack, properly ventilated. Ventilation is another whole world that was really a problem is with a monumental change. We still don't. They still do not put the equipment where it should be put. They put it wherever. The easiest place to put it is. It's not in the living room. It's not in the family room. It's supposed to be in the garage. In a whole closet, if I can, ventilated to the outside, people do not understand, you got to get air in and air out.
They don't get it unless they can put a chiller on the floor. You can put air conditioning in there. Everything we sell today gets hot. VCRs and turntables didn't get hot. Now you have Apple TV's DVR, NVR, the router gets out, you put a battery backup in it that gets hot, but you know when it gets loud, and so you've got this constant conflict of it. To answer your question, this resi mercial. Absolutely. It's blending before our eyes. I'm surprised Infocom hasn't really taken over the CES portion of our industry. None of us go to CES. CEDIA is the only game in town. Why isn't Infocom more of a competitor to CEDIA? I don't get that.
Ron: Hey, maybe they're listening, maybe they will be. To spin it in a different direction. The other day, Tom, when you and I were talking, you actually took your computer. I'm not asking you to do this now, but you took your computer, your iPad over to your demo facility. You were talking to me about audio and sound. I could sense the passion and joy that you have when you talk about music and sound reproduction. Can you talk at a high level? What makes a good audio demo when you are doing your thing? Tom's doing his jam, and you're passionately talking with your customers or prospects. I know you're selling very expensive high-end gear. You're selling Steinway Lindorff amongst many other very premier brands, and you're doing it successfully, and you've been doing it successfully for years. How do you do that?
Tom: You translate, whether it's your eye contact with your voice or your mannerisms, that you have a passion for what you do. The person you're talking to, that's face to face on the other end of the phone, they feel that. They have more of a tendency to believe you. Number two is listening, listening to the needs of the end-user. What is important to them? Everybody's needs are different. The consistency that I found, though, across all platforms, usually. They want it, they don't know the right words to put it into, but I listen to the words people tell me when I give a Steinway Lindorff demo. The wife says, "My ears don't hurt. I can hear the words without seeing closed captioning my TV." One person said, "It's conversational audio." I had it pretty loud, and I was like, maybe 10 feet away from them. We were having a conversation. He says, "I can't do that with my system. If I turn it up that loud, you and I can't talk." These are the needs of the person. When you understand their needs, and they understand that you understand those needs. Then you have a bond, and when that happens. Then you're communicating. I hope that answered your question well.
Ron: Let's say that you have a customer and they've been a long time customer and you've provided them with cool gear and they tell a friend and that friend comes and meets you for the first time. Walk me through how you introduce audio, gear, technology without giving away any of your super-secret sauce? What's the method that you go through with a new prospect?
Tom: First, I usually bring them up when they come into the store. I walk them through the store. The story is we didn't really talk about the store's about four thousand square feet. It's all one level, and I have this one section of the store that is on the remodel, but I have all the old equipment brought out, I've taken out of people's homes over the last three generations, like old Marantz, Brewer, the whole lineage of Sony Blu ray players. A lot of history there. That always grabs their attention. They always ask questions about it. How much is that worth? And I said, zero, I'm never going to sell it. If I never sell it, it's worth zero. I'm a collector like that. And then I take him in, and then we walk through the store, and then you have all these Sony TVs up on the wall, and they're all I always sell the top end.
I sell the flagships of whatever it is I'm selling. We only sell OLED. That's it. It's all the OLEDs on the wall. We go into the Steinway room, and we go, and I talk about all the various models and shapes. We go through a whole litany of like a little demo from everything from unplugged to Kaleidescape. I touch on all surfaces, let me walk, you can continue, and I walk, and I show the little two-channel room that we do, and then I walk them through the sales office, and I walk them into my office, so they get a feel for who we are. Then I sit down and start asking questions about their needs, what's important to them, and what they are trying to do? Are they trying to downsize? Are they just trying to watch TV? Do they want it really easy? Everybody says it's easy, but there are different easy levels, and everybody's easy idea is different. You have to kind of get through that. The consistency is. They don't want it. You have different household entities, typically the care, a wife, and a husband or two partners, but even with two partners, you still have one person into it. One person's not. But the consistency is they know they don't want it to be loud, and it's very difficult because acoustically in the houses today, normally it's speaking, it's awful glass and stone and wood and it's hard surfaces. It's very hard surfaces. How do you overcome that?
That's a challenge. Then you don't want to see the speakers. You've got the wife, an interior designer who doesn't want to see anything. You can't change the room. They're not going to let you always put acoustical panels or structural rooms. What do we do? We put the speakers on the ceiling. We're not going to go there.
Ron: I always thought that was how we do it as an industry, but I've always been like, how can my ears be in front of me? How can speakers over my head be a good idea? But I don't know.
Tom: Remember what I said before at the beginning of the podcast?
Ron: They're selling our industry, and everyone listening is guilty.
Tom: I'm guilty, too. Everyone's guilty, everyone. We had to put them on the ceiling because the wife didn't want to see them. The wife was the interior designer. I don't want to see the speakers. I got to put the speakers in the room. I can put them on the ceiling. Then we want to angle design and twisting speaker what to play the game all you want. The reality is. At least part of the resistance is the fastest way to sell the job, and we put them in the ceiling, and it's the highest profit margin. My industry is going to hate me for this. But I brought it up.
Ron: You and me, we're both going to get tomatoes.
Tom: We're going to get crushed. I don't imagine.
Ron: Understood. You are clearly very passionate. I'm going to say about audio and video. You also are an integrator. You do integration projects. But I have a perception that industry-wide and I talk to lots of people, I'm going to say that for at least a while, maybe the last 10, 15 years, maybe the last 20 years, integration has been more in vogue than being an audio-video specialist. Do you have an opinion on that, and where did all the passion for audio and video go? Clearly, you're passionate.
Tom: It's hard because I've seen the same similarity when I used to sell printing presses and commercial equipment. It's a job. It's hard to get passionate about selling a printing press. Difficult and our industry has evolved that way, and it's not to say that the salesmen aren't passionate about what they do. Still, it's hard to get passionate about something when the end-user says, look at just what the final number is? Is my budget fitted to that? I don't want the husband who has often not the stereotype, but most of the time, the husband or the dominant person is paying for the bill, and they don't want to go through the minutia of the equipment. They don't care. They don't care whether it's a Sony or Marantz or a Steinway. This time is different because that instills passion into the process and takes that out of the way. They don't care if it's a necessary evil. They typically will turn to their spouse and say, "You deal with it. I don't want to be involved." Now, they want to be involved when the system doesn't work. When they're trying to watch TV and can't change the channel, or they can't change the import, or they're trying to navigate through Apple TV, and the Apple TV locked up with broken legs up again, watch Netflix, then it all comes to that. All of a sudden, they want to be involved. But the whole minutia of the process.
Roll the clock back, go back 30 years. How did we do it then? Well, now the husband comes in the store. They want to touch and feel the equipment. They want to listen to the speakers. They want to see what the pre-emptive receiver looks like. They want to care about the cables that connect from point A to point B. It's a whole different process. Now we have a different world. When people turn overused to be you had TVs, TV sets that were want to know nothing's changed, I didn't want to see the TV. You put them in a cabinet, so when you put them in the cabinet, then what do you do? Put speakers in the cabinet, not in the ceiling, because we had a cabinet to work with, and you had conventional speakers, and you put them in the cabinet. When you put them in the cabinet, you had separation thing over the top of the TV is called a center channel, not a soundbar. The speaker is on the right and left in the cabinet, and you put speakers on the ceiling for back speakers. The subwoofer went into the cabinet. You sell the house. The new person comes in. The first thing to do is whip out the cabinet. Where did the equipment go? In the ceiling. Then they say, "I can't hear the words. I'm watching Outlander or Peaky Blinders, and I can't hear the words. Why can't I hear the words?" You can't you hear the words because if I'm talking to you and I got a bunch of people behind me talking at the same time, guess what? You're not going to hear the words 'cause you're 10 feet away.
It's very difficult, and then a lot of people, a lot of salespeople and dealer owners, they get beat up so much, it's like. You know, I don't care. I give up on business doing great. People don't care anymore, so why should I care if they don't care? And then the industry, the resi mercial, it's coming, it's on its fast track. It's very, very hard to bring that passion back to people very hard. I'm doing it now, but I'm doing it like in a grassroots method of selling what I don't know if I can plug names.
Ron: Yeah, mention whoever you want.
Tom: Steinway has done that.
Ron: Tell me more about that. I know that you're passionate about Steinway. You've given me the demo through Zoom. I was on the edge of my seat. You even took me to a resource page, and I watched a few more videos, and I think I now get it. It sounds like that's a neat brand and exciting brand that clearly has you passionate. This is not a Steinway. They're not sponsoring this show. But just like for you, why did it really strike a chord with you?
Tom: It struck my heart because of all the things I mentioned that I talk to people. Everyone I show it to people who hate our industry, the wife, the interior designer hates our industry, and I shouldn't use the word hate, but they don't like our industry. But they come in, say it's a Steinway and Sons, that the piano people, they endorse it. Do you know what's really interesting? They look at it as kind of small, and they and they look to their husbands, say, "You can have that." The husband's always like, "Oh really?" Then I turn it on. The wife is like, "My ears don't hurt." I turned it to Peaky Blinders or something. Then I turn on The Greatest Showman or the one with Bradley Cooper. The women are sitting there. I can't get a woman to stay in the store. Because they loved it, the husbands of. They're watching TV, listening to music, they're listening to someone else, it doesn't matter, it makes everything sound amazing, and it looks amazing.
Now I've got something that they're passionate about because I'm passionate. It's not an uphill battle. Up until now, it's been the last 15 years have been an uphill battle. Now, it's not. In fact, I get people coming to the store, they drive down the street, they come in the door, can you turn that on again for me? I haven't had that happen in 30 years. That's why it has me, so I want to tell everyone. Anybody who can buy this. This is pricey, but it's not pricey. Because it's a one-and-done sale. We're not accustomed to it as an industry because we're a hobby industry, and I've been selling the hobby for 30 years, you come into the store, you buy a pair of speakers, and then you come back to the store, and it's not quite right. We play around with the cables. We play around with the power conditioner. We get maybe a subwoofer, maybe get to some observers. That's the hobby. Steinway doesn't play that game. It's one and done. What happens? It just stays with you. You may get a different type of speaker, but the amp is the same, and the pre-amp is virtually the same. When you move, it goes with you. What happens when you die? You hand it to the next generation. I venture to say, which is astonishing, go to Oregon.
Try to find a used Steinway. There is no used Steinway in the world on Audigon. How is that physically possible? They've been around for 20 years. Because they don't resell it, and that's alien to our industry. It's similar to the commercial industry or residential distribution integration. Normally when we go to a house, you sell the house at all stages, and you buy another system. What happens is you become detached as an end-user. You don't have any desire to hold on to the thing you bought. Going back to your original question, the end-user is losing its passion for resi mercial. It is until you buy Steinway, it goes with you.
"If you want to be good at selling high-end audio, you need to find solutions or brands that you get excited about because if you're excited, that passion is going to be transmitted to your customers."
Ron: What I'm hearing is if the integrator or the dealer gets particularly passionate, and I'm going to extrapolate this to any of their products or solutions there, then easier to sell. If you want to be good at selling and correct me if I'm wrong, Tom, but if you want to be good at selling high-end audio, you need to find solutions or brands that you get excited about, because if you're excited, that passion is going to be transmitted to your customers.
Tom: It is, but it's a hard sell because you have to start over. You have to use their amp, their preamp, and their speakers. And a person comes in looking for something to start over from scratch is extremely difficult. You'll turn off more clients than you'll get. You can do it. I've done it. But I'm also at the end of my career. I'm also at the point where I'm not building a business the same way I'm not trying to have multiple stores or 20 people in my company. I'm not in the same boat as a thirty-five-year-old me. I can't do that, so that's difficult. Also, a lot of my clients say, "Tom, you've been building my system for 20 years or 15 years, and I love my system. What do I do with it?" My kids don't want it. I don't have multiple houses to put it in. I just want to give it away. What do I do?
Ron: What's the answer?
Tom: What's the answer? A light bulb goes off, and I created a consignment store. I consider I sell. If you buy a Steinway system for me, then I will. I will help sell your product. I became an Audiogon dealer to sell their consignment equipment. I created a solution.
Ron: I'm mindful of time here. You've been in business thirty-five years or so. Many business owners are listening to various stages of their and their commercial enterprise, their business, their entrepreneurial journey, what are maybe an idea or to a recommendation or two on things to consider, maybe lessons that you've learned that you wish if you could share it with others, that maybe you'll save them from some of the pain or anything come to mind?
"Don't extend yourself out. Don't over-leverage yourself. There is smart money."
Tom: First thing is obviously: Don't extend yourself out. Don't over-leverage yourself. There is smart money. We used to have flooring. My old owner, Ralph Yeomen's, you said never do flooring ever. If you can't buy the equipment and pay for it, don't do it. It was a well. Lesson learned because when the recession hit, I didn't have any debt. There is good debt and bad debt. I've also been held back because I could have maybe expanded my business better if I had taken loans and expanded when I could have it hit the market right. It's a balancing act, but I've always stayed in there. The number one asset you have is your clients and the knowledge of your clients. Keep all that data you have on your clients, their names, phone numbers of emails, and what they have in their house. That's really valuable information. You don't want to share that with anyone. If there are companies out there that need that information to assist you in your job, I'd be a little leery on that.
I would make sure that whoever those companies are, you have something in your agreement that prohibits them from selling that in case their company gets sold, which a lot of companies are industry are being bought and sold, and you don't want to lose that information. Your information is your greatest asset someday. Obviously, not everybody will be like me, who's going to work until I croak. My heirs get to deal with it. If you're thinking about an exit strategy, your information is your greatest asset. Not the lines that you sell, unless you own the building, of course, that's an asset, but it's really the data, and the more data you have on your clients, that's even better. What do they have? How old is it? When is it due for turnover? That's assuming that we are indifferent country areas where generations of people live in California's same house. They don't. We turn over houses every five to 10 years. But still, the system stays. The more data you have about the system staying in the house, the more chance you will go back to that client.
Ron: How do you weaponize that, Tom? I say weaponize it for good. You have that data. You have that historical record of who bought what when. That's I'm going back into my memory banks for many years ago. I want to say I was traveling in the Midwest with Lutron, and I visited an integrator. I want to say in Kansas. I want to say Lawrence, Kansas. It was Keefe's audio. But I met the principal there, and he was talking. He said exactly what you just said. This was a guy that had been doing this for 50 years. He said the most valuable asset in his business was the record of who bought what when. He was weaponizing that data with marketing strategies and biz dev outreach, and so what does that mean for you? What do you do with that data?
Tom: With my concept of ACP, Atlantic considers partnership. It gives me the ability to with the technology we have today, with Wattbox and Blue Blot before them. It gives us the ability to really be a proactive dealer versus a reactionary dealer. We all talk about being proactive, but it's hard because you've only got so many people in your company. And who's going to do it? Me. My assistant, my project manager, is out there doing new jobs so that the more data you have, the more you can help do it faster. The more value you're going to be to your client. I'm a big believer.
Crestron has a source code, and some dealers give the source code away. Some dealers don't. Some dealers make the client come to them. This is all pre-Crestron Home. This is Crestron Simple. A lot of people know that. I give the source code to the client. I want the client to come back to me because I want to be with me, not because they have to come back to me. That's always been my design for 30 years, and with the ACP and with the help of, as I said, Blue Bolt and now Wattbox and Domotz. Domotz is a great asset, that's a product that allows us to be more proactive, and we're still learning if you can get to the client. We all know this, or any of the dealers are out there. Suppose we can get to the client before the client gets to us when there's a problem. It's a much better conversation. If the client has to get to us, yes, we can all dance around it and make the client happy again, but it's much better the other way around and in my name, in many cases, if we get to the client before the client gets to us, we can fix the problem. The client always wants to blame whatever's in their hand, and it doesn't matter if it's Savant, Crestron, or Control4. 9/10 times it's not that. It's something else. Apple TV needs an update. We can't update remotely got that I know of how you Apple TV. We have to walk the client through it all. We have to go out and do it ourselves. When I talk to the client, I thought it was the remote. The remote turned everything on. It can't be the remote. Well, you're right. OK, can you watch DirecTV? Yes. Well, then it's not the remote. Can you watch Apple TV? No, it's locked. OK, then I go to my little magic box. I push it. I was like, let it go. Oh my God. You're a savior. Go to settings, general, go-to systems, go to main software maintenance, oh, you're on 14.5. OK, we got to get you to 14.7. If you care about your client and you love them. You'll be fine. Whether you're selling printing presses or cars or audio, video, or websites, it's easy if you care about your client. Not only would you be happier, but you'll also have a much better experience in life, I believe.
Ron: I agree. And on that theme, what drives you, what lights your fire inside?
Tom: This. When people say if you had the life to do it all over again, what would you do? Would you do the same from a business perspective? And I would say I wish I could get to more people. I talk to people from everywhere and when I entered, but when I became a dealer for Audigon, which is now just recently, I'm talking to people not just from coast to coast to Newport Beach and who have been to or have heard of my store. But I'm talking to people from all over the country. I get into this half-hour conversation, and one person called me, which I actually like. They didn't take it as a negative. He called me a unicorn. I laughed like a unicorn. Yeah, I wish I'd met you five years ago. I just kind of laughed. That made me feel good.
What drives me, that drives me. It's funny. I talk as fast as I can, but it comes to this is 1978 or something. When I came back from Iran, I was lost. I didn't know what I wanted to do. I was twenty-one years old. I was going to night school, so I took this aptitude test, took like five hours, took this test that I had little things off, and they put it through this computer thing, and it came up with a printout. But I forgot about it. I sent the printer in a box. Forty years later, I'm opening up a box, and they came across this printer with little holes on the side of the paper. And up at the top, it said what I should do in life. Now, back then, I was working for aerospace. I wasn't making sales at all. These are all pre-sales days. And at the top of the list, it says the salesman. The second one, said the schoolteacher, third one, said drama. And the funny thing is. I love all three. The problem with salesmen, unfortunately, it's salesmen in our society means bad. And I've always said. There's a fine line. It's a fine line between con man and salesman.
When a salesman sells what's best for the client, he's a salesman. When a salesman sells what's best for him, it's borderline. It's borderline completely. We all have to be profitable. Again, you go back to this line. It's easy to say I'm a teacher. If I'm a teacher, then I have no vested interest in being a teacher. I mean, other than giving my point of view. But it's all encapsulating. It all means the same. Communication, I used to be a business major, I hated being a business major, and then when I was in school. We can cut this out. I was in school, and there was this class. It was called human sexuality. I took human sexuality, and I went, wow, I like this class. I went back to the guidance counselors that I would take more of these classes. And she says, well, that's not a major, but you can bet that's a part of the communications major. I said, OK, fine, I became a speech communications major. I went from the business that I fell in love with school overnight. And a lot of it was was drama and interpersonal communication, which, by the way, is sales training when you were in college, and it's all sales training. Anyway, it all comes back to communication, which we use in life. We use it in life with our mates, parents, clients, and vendors. And I think we've evolved in this whole commercial resi concept. We're getting away from communication. Some of us are used to just now texting everything. We don't want to have eye communication, and that's hurting. Everybody, not just our industry, it's hurting the end-user, it's hurting us, it's hurting the vendors, or we have to get back to that. This is a way of doing it.
Ron: What is a word of advice to the vendors that manufacturers are tuned in? What's a common mistake they make when they call on you, the reseller, their partner? This is a chance to speak to them. Hey, I wish you guys and gals would do this a little differently or be mindful of this way of working with us. Does anything come to mind?
"You have to trust your dealers when you have a problem, and you know it's a problem. You have to call. You have to email the dealer to put it out on Facebook. But you've got to let your dealers know where there's a problem, and you're working on it."
Tom: Yeah, one big one. You got me on a soapbox. You have to trust your dealers when you have a problem, and you know it's a problem. You have to call. You have to email the dealer to put it out on Facebook. But you've got to let your dealers know where there's a problem, and you're working on it. So many manufacturers say, oh, we don't know, and the integrators of today. It's not like the retailers, retailers, you sit in the store and wait for the client to come to you, and again, he goes away. There's no cost involved for us to roll a truck deal with the problem. We're out in the field, tech support, there's no problem found, and we're spinning, spinning, the client isn't reimbursing us for this time. Thousands of wasted person-hours only to find out, oh, there was yeah, we knew about it, but we didn't want to tell anybody because we weren't sure. I get it. It's a catch. You're in a tough position.
You put the information out there, it goes viral, and now the competition is talking about it. I get it. But you either got to pick the dealers you trust that are not going just to say thank you for the information. We'll tell the client we're working on it. Versus wasting countless person-hours trying to fix a problem that they can't fix, and it's not the information you want to network, the problem that you're having, it's a network of. Kind of. Kind of not. And it's like nobody wants to be responsible for it, but it goes back to communication. The more communication we have collectively as a whole, we will be better. It's really simple and but that's my number one thing.
"We are human like everyone else, and some issues and problems and misinterpretations make mistakes. Rarely do you get in trouble for being over-communicating? Even if you perceive that you do get in trouble for over-communicating, it's usually less trouble than you'd be in if you didn't communicate."
Ron: Amen. I can tell you here at One Firefly that's always a theme. We are human like everyone else, and some issues and problems and misinterpretations make mistakes. Rarely do you get in trouble for being over-communicating? Even if you perceive that you do get in trouble for over-communicating, it's usually less trouble than you'd be in if you didn't communicate. I think that's a great way to close out time. We're coming up on an hour here, Tom, for folks that are tuned in, either live with us on replay or in audio. How do you want people to get in touch with you? What do you recommend?
Tom: Well, I have an amazing company trying to get my website up. If they can get my website up, then that would be a good way of getting it. Do you know anybody who does good work?
Ron: I have a Rolodex. I'll look up some people. I'll see if I can find someone for you.
Tom: I say email is the best. I can always get that. Then eventually, you can go to my website because I'm going to create something that I call JAT. Just ask Tom, and I will let you do a lot more of this in the future and direct you to my website. I know it's a little odd, but I want to make my website a go-to place for information and not just once over and over. If you're looking for the size of a TV, you're looking for the colors of the Steinway speakers. You're looking for just information. It's a place that you're going to be able to go to. That's what my web marketing department is doing.
Ron: The one that I'm going to find for you is in my Rolodex.
Ron: It's going to. We will put all of that information down in the comments section. We'll also put that over in the show notes. I see my team already dropping that in. There's Tom's email and the atlanticstereo.com. Tom, it's been a pleasure to have you on show 181 of Automation Unplugged. Thank you so much for joining us.
Tom: Thank you. It's been a pleasure.
Ron: Alright, folks, there you have it. And yes, Tom referred to a Web project that we are super excited to have been selected to work on with Tom. We're really getting to know him and his business and his mastery of so many subjects around just running a business. And his passion for audio and video is infectious. So much so that the other night, I think it was a Friday night that Tom and I were talking. He said, "Ron, I'm getting a glass of wine. You do the same." And I did that. Then he gave me the whole demo through his Steinway stereo room. And it was awesome. I want to see it in person. I want to see it more than. I want to listen to it in person. But I got it through his iPad and zoom into my ears. It was pretty cool. Certainly, the strategy of watching how he walks around the room and talks about the technology and sound reproduction. I think that is one of the many masters in our industry that do that quite effectively.
Like always, folks, if you have not already done so, please go to the One Firefly Instagram, one of our channels. It is our newest channel. It's the one we've been promoting for the last year and a half or so. And we will be live posting here. We have CEDIA coming up around the corner. Yes, One Firefly is going to be there live in full force. We're bringing a small army of marketers to the show, and we'll be live posting on Facebook and Instagram and Twitter and LinkedIn. I definitely want to make sure to follow us if you don't already. And if you have not subscribed to the podcast, that is the way to get these shows when you are out on the run or, in my case, on the walk. I walk every morning, or at least I tried to, and that's where I can see my podcast content. Definitely check that out or subscribe. And if you feel so compelled, leave us a review, and it would be thoroughly appreciated. Here's our website, onefirefly.com. Here's our phone number and I will see you all next week. Thank you all so much.
In 1990, Tom purchased Atlantic Home Entertainment & Stereo and had since grown the business to a steady $4 million a year in annual revenue. Throughout the years, Tom has discovered that the key to success is providing excellent customer service. To help ensure his customers receive the best support, Tom established a remote service called Atlantic Concierge Partnership.
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 become the leading marketing firm specializing in integrated technology and security. The One Firefly team works 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: