Back Issue Article
In last months installment, an imaginary twelve-step program for sinister audio merchants on the profit prowl, I created the backdrop for a listing of ingredients that, while part of retail reality, will rarely be encountered in toto by anyone walking into any specialist audio boutique around the country. But obviously there are many different kinds of outfits. Some more than others will manifest certain of the principles outlined. Thats because this is business. In Maui, I encountered a restaurant with a huge sign outdoors that read "Come in and eat or well both starve." Farmers bend over and pull potatoes out of the soil. Retailers ask you to bend over and take money out of your wallet.
Just kidding, just kidding! Straighten up before you hurt your back.
Of course, in commerce money must exchange hands, and in appropriate amounts. If youre uptight about that, a retailer is allowed to ply his trade to get you to loosen your purse strings. The question, as always, is what you receive in turn, and how you are being made to feel about parting with your funds. But you must also keep in mind that just your walking into a place is a privilege for which somebody else paid. If you walk in, spend time, ask questions, look at things, receive advice and leave -- well, you just took and didnt reciprocate. Someone paid for whatever you looked at and touched and checked out. Ditto for the rent on the place, the salary for the sales guy you talked to and the ad that helped you find the store.
This month, Im taking you to an establishment to which Id send my grandmother in a heartbeat and by her lonesome self. Id also invite my fictitious alter ego, owning as he does his own dot.com high-tech outfit with seriously inflated IPO stock. Id remind him to bring his corporate platinum AMEX before the market plummets.
Our store is situated in wealthy Mission Viejo, a suburb of Laguna Beach, halfway between Los Angeles and San Diego. Placed in a small mall off a major thoroughfare within a neighborhood where street names pretend to be on the Côte dAzur, Audio Expeditions, on 27001 La Paz Road # 310, is decidedly not your usual audio store. For starters, you can stroll in directly from an elegant, upscale Italian restaurant with outdoor dining -- just use the back door. Should you begin the evening with music, you can saunter outside for a little evening snack later, in between speaker demos. But the real surprise is within the stores actual premises. The store sports a total square footage of 4000, and owners Lenny Mayeux and Dennis Jacobson opted for the elegant living-room approach, sub-dividing the available space into six different-sized demo rooms that approximate a valid cross-section of what most of us actually call home. The quality, execution and attention to décor -- interior design par excellence -- is, on the other hand, quite likely well beyond what those of us with ordinary incomes return to after five oclock. Were talking designer furniture, museum-quality framed artwork, expensive spot lighting, well-cared-for plants, equally well-cared-for refrigerator -- the works. Every room is done up in a different theme and carpet, with different color and décor schemes. All walls are soundproofed so demonstrations remain contained to their respective areas. Not to put too fine a point on it, but Audio Expeditions is one of the classiest, most comfortable, inviting and downright enjoyable audio joints Ive ever come across. This, of course, speaks volumes about the philosophy and mission statement of the owners who are in their mid 30s.
Dennis Jacobson and his wife are young, upwardly mobile plastic surgeons in Southern California. If you flash on dollar signs instantaneously, youre correct -- it does take a bloody fortune to put a store of this caliber together. Never mind filling it with state-of-the-art inventory, running a fully licensed and bonded operation and offering CAD-assisted custom install services for $200,000 home-theater rigs owned by music producers or Hollywood agents.
Remember the movie Moonstruck? Chers very patriarchal and Italian screen dad is a philandering plumber with a great sales pitch. He goes out on an emergency call with a destitute couple in dire need of immediate repairs. "For pipes there is plastic," says he. "Its cheap and it works." But then, upping the ante, there is copper. Portentous pause. "Copper costs more because it saves more." Artful emphasis on save. The flip side of this bit of plumbers lore is the familiar "it takes money to make money." Without the Jacobsons generous funding derived from very hard work at their "real" jobs, Audio Expeditions couldnt afford its location or its lineup of cutting-edge gear.
Before you assume that theyre raking in the dough like hot coals because our popular wisdom says so, let me put Lenny on the mike. "We opened in April of 1997 and probably will get into the black sometime later this year." Thats not to say the store has operated at a loss these last two-plus years. But to amortize the opening-day display inventory and cost of build-out alone must have taken a huge chunk out of the annual gross earnings. So what it does mean is that every penny outside of putting food on the table and paying the bills has been continuously reinvested into the business. If you think anybodys getting rich in a hurry here, dream on.
Did you realize that custom installation done right involves complete home automation -- draperies, lighting, air conditioning, heating, security, CPU integration, keypad systems -- as well as calibration of hardware, advanced interior design services and architectural blueprints? How about having to write your own computer code for an AMX controller that becomes command central for the entire home-automation installation? Or fabricating custom metal brackets from which to suspend heavy projectors when building codes deny use of much more convenient and obvious struts and joists? The challenges encountered with each job are always unique and require very skilled, resourceful solutions. Allowing a stranger to modify the interior of your $500,000+ home could spell disaster unless youre dealing with a true professional and master at his craft. If you insist any trunk-slammer with access to inventory from a distributor selling out of his warehouses backdoor is fit to do a proper custom installation, consider yourself warned.
Thats actually a major bone of contention Lenny chews on -- a guys gotta eat you know. Citing Meridian as a handy example just because he carries it, hes quick to stress its a widespread problem in the industry at large. Mayeux explains that due to the rising complexity and sophistication in the custom-installations market, manufacturers have created an uneven playing ground. A proper storefront dealer is required to buy in. That means a sizable financial commitment for an opening order plus back-up inventory. Lenny strongly believes that in order to sell it, you need to show and demonstrate it. No problem. Audio Expeditions has gone to extremes to ensure that every aspect of home-theater design is represented in the store, from installed keypads and motorized blinds to plush, reclining leather movie seats such as you might see in Audio Video Interiors. But why is the home-based custom installer allowed to order his gear on an as-needed basis? He doesnt maintain any inventory whatsoever. He doesnt uphold professional and regular business hours. Instead, an answering machine picks up. He doesnt demonstrate what he sells, so he sends a customer to guess whom? Worse, when a customer calls the manufacturer for his closest dealer, he is referred automatically not to the installer but the displaying dealer who now woes the apparent client with a detailed and professional demonstration. Strangely enough, this client never returns but weeks later phones in with a distress call. He cant figure out how to reprogram his touch screen. His installer and hardware provider -- chanced upon via a cursory stroll through the Yellow Pages and proudly listing Meridian -- hasnt returned his message yet.
To be very clear, Lenny doesnt begrudge competition at all. He firmly believes it enhances the market if apples compete with apples, not lemons. So hes merely asking for a level playing field in which all participants play by the same rules. He blames manufacturers for not having defined proper categories with associated requirements and obligations. He suggests that if home-based operations are to remain in the distribution and service chain without display and stocking requirements, they should have restricted access to a line, in concert with their level of expertise and commitment, to avoid unfair marketing practices. As an example of the latter, Lenny contends that his $105/hour labor rate is easily underbid by anyone with no overhead or liability insurance. When queried about his hourly charge, he quickly itemizes his expenses, from personnel salary to company van with insurance, bonding and licensing fees. Guess what happens should a guy accidentally hit a water main that causes flood damage to a $80,000 one-of-a-kind Persian rug? Can the fly-by-the-seats-of-his-pants installer take care of you then? Most consumers merely look at the hourly-rate differential. They assume automatically that the more expensive store must be overcharging. Really?
Audio Expeditions charges each customer interested in custom installation projects a $100/hour in-store consultation fee that is fully refundable if the project receives a go-ahead. In the early days of operation, Lenny & Co. freely gave away literally hundreds of hours of advice and associated plans and projections. Finally an architect client pointed out that architectural blueprints carry a price tag of $20,000 regardless of whether the client ever builds the house or not. Since implementing a standard design fee, more than 90% of Audio Expeditions custom bids materialize into project approvals. Once in a while, a savvy consumer will have Lenny establish a laundry list of necessary items for an application and then go out to obtain and install them independently. Lenny is fine with this since now his own time and expertise has been fairly compensated for.
A similar program had been introduced to curtail home audition abuses ever since a Jeff Rowland amplifier returned to the store disfigured by a major belt-buckle-inflicted mar across the front panel. While the customer casually shrugged off the incident as minor, Audio Expeditions ended up having to sell this unit as cosmetically blemished for a serious discount, which amounted to taking money out of their own pocket and throwing it down the toilet. Now a 2%-10% service fee is assessed for home auditions, fully refundable if the customer does any type of business with Audio Expeditions. Lenny admits that he liberally adjusts this policy on a gut-level basis. Long-term proven customers get to take home anything they want without being charged.
The disappointing aspect in all of this is the inherent proof, once again, that the old psychology of not honoring what is freely given still holds so prevalently true. Lenny does me one better then. Would you want the cheapest doctor in town to handle your health-care needs and deliver your daughters first baby? Would you want the cheapest attorney in town to defend your lawsuit on which hinges your economic survival? Then why should you feel so compelled to haggle about price when youre dealing with a very professional, top-notch audio outfit doing very customized, impeccable work? Excellence doesnt come free to those who acquire it painstakingly, and you should not expect it dispensed without recompense.
On the subject of price, I was curious to hear what Lenny would assemble if given card blanche for fixed amounts. Here are his immediate, unrehearsed responses:
Lenny explained that for home theater, these lower price points arent truly workable. The reason is simply the high cost of a good HDTV like the new $6500 Pioneer, which on its own consumes the majority of ones lower budget. By the time you step up to his $12,000 Zenith projector with Faroudja line quadrupler and custom screen, a lot of funds are expended before speakers or electronics have even been addressed. Lenny cites $20,000 as the break where serious home theater begins as a system. However, at the other extreme, hes quick to point to the Energy Take Five system around a Denon receiver. For $1500, these components allied to a customer-supplied 27" TV would make for a very credible and involving experience without breaking the bank.
Audio Expeditions, by their own count, averages a 50/50 split between two-channel and home-theater transactions. They admit this constitutes an unusually high capture ratio for audio-only sales in their market, but it is a direct reflection of their insistence that home theater is only as good as its music constituents. Lenny generously confesses that many of his competitors do truly excellent work in the arena of professional and clean installations where everything turns on and works as advertised. But when it comes to sound and musical enjoyment, other stores actually send their more sophisticated and demanding clients to Lenny as they lack the expertise, enthusiasm and passion for just music that still drives the team around Mayeux. He leaves me with this bit of math: "If a $25,000 music system turns on when you hit the power switch, thats not good enough. It has to sound like a $25,000 system." And that, my friends, does require a lot more than just having a discounter sell you components and ceremoniously unbox them for you.
My visit to Audio Expedition left me very impressed. Here is an oasis of excellent sound and sight where passion, class, professionalism and high ethics meet. These are worth every penny asked because next time you buy a $500 pair of handmade shoes, pay attention to the whole experience. Its different from shopping at Macys, isnt it? Buying a fine stereo or video system is a heck of a lot more involved than buying shoes.
Tuneful trails -- without blisters.
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