Do Not Call it a Piano Sale! | Music Trades Magazine
Music Trades • Feb, 2008
At Steinway & Sons' 2007 annual meeting in Anaheim, Steinway Senior Vice President Frank Mazurco presented a special one-time award to Steinway Hall - Dallas. The award recognized the business, which was recently expanded to three stores, for the impressive number of promotions it held--42 last year alone--and for the events' effectiveness. Dallas Steinway Hall's promotion system and the individual event ideas come straight from Steinway & Sons playbook. While some of those ideas may be applicable only to Steinway products and dealers, others, and certainly the system's general principles, might serve as a highly successful model for retailers representing other brands.
"We never use the word sale," declares Dallas Steinway Hall President Danny Saliba. "It's not in our vocabulary. And we never hold a sale; we hold selling events." Semantics, he admits, play a part in this essential precept--exploiting the power of words and perception-but the distinction is more than a semantic exercise. "The word 'sale' gets overused," says Saliba. "Some dealers hold piano sale after piano sale, seemingly just for the sake of having sales. The word stops having the desired impact. We try to make each selling event have a specific purpose." The other distinction, perhaps more significantly, is that "sale" connotes discounting, which Dallas Steinway Hall avoids like the plague.
One critical conceptual key to DSH's strategy might be defined as patience--or "event-ual" promotion. Rather than holding a series of single-shot, do-or-die sales, it develops prospects over time with three or four traffic-building events. It's only after the customers have been cultivated at these preliminary events that the store hosts a closed-door selling event. Exclusively for familiar customers who have made appointments, these selling events typically accommodate four prospects an hour, and the events last up to six hours.
Traffic-building events are designed to entertain, educate, or intrigue prospective buyers, not to close any deals. For example, the "How to Build a Piano" event educates customers by highlighting the materials, construction, and physical attributes of the instrument, teaching them some of the basic criteria needed to shop for a piano. "'Piano 101' is about educating the consumer on what constitutes a good piano," says Saliba. "If the average consumer sits down at a piano in a piano store anywhere in the U.S., chances are it will sound 'pretty' to them--until you put it next to a real piano. All of a sudden that first piano doesn't sound so pretty."
Another event aimed at honing the customer's powers of perception and discernment is "Dueling Pianos," whereby the retailer positions a grand piano and a vertical piano of the same brand out of view, behind a curtain. Demonstrating the two instrument types gives the customer an appreciation of the potential and limitations of a vertical piano's performance.
Saliba explains, "If we have a roomful of people at a traffic-building event, we're not even attempting to close them; we're teaching them. Those people aren't buyers yet. But by educating them, sometimes over the course of several events, by the time we're ready to hold a selling event our salespeople can invite every single one of them, because we know that they're all qualified prospects. This approach ensures that we have a steady flow of prospects before we hold the selling event."
All of the events have catchy, thought-provoking titles that don't include the "s" word. One dubbed "You Have The Power To Turn Your Piano Into A Steinway" encourages people to trade in their existing piano. "We take trade-ins throughout the year," notes Saliba, "At this event customers may get a better trade-in allowance--but we don't discount the piano." Similarly, an event promoting PianoDisc's Opus G2 ("an absolutely incredible product") isn't called "PianoDisc Sale!" "We call it 'This Is Not Your Grandmother's Piano.' In this case we discount the PianoDisc, but, again, not the piano.
"I see my competitors gather lines of pianos whose wholesale prices keep getting lower and lower," Saliba continues. "I'm just the opposite. Second only to our Heirloom event, our most effective promotion is the annual 'Steinway Price Increase' event. [Dealers encourage customers to buy before the company raises its prices, 'like clockwork,' every January.] We look at the price increase as a cost-of-living raise! It's also a strong sales motivator, and for our customers it reinforces their perception that a Steinway, Boston, or Essex piano is a great investment that's just going to appreciate in value."
DSH's largest event in 2007 was its Steinway Heirloom Collection promotion, which it holds each December. Throughout the year the store sends to its factory in New York pianos taken in on trade or purchased on the open market. "By that time they're not really pianos," says Saliba, "they're just cases, and the factory completely rebuilds and refinishes them. Rather than call it a 'Used Steinway Sale,' we call it our Heirloom Collection event."
Dallas Steinway Hall has also achieved great results with its "Sunday Evening With ... " promotions. These events typically feature an A-level pianist who is performing with the local symphony or at another venue sometime during the month. Due to contractual restrictions, the performance is typically limited to a half-hour, but most artists break up their actual playing time with explanations of the material, anecdotes about their playing experiences, and observations about the playability and sound qualities of the piano. DSH sales representatives meet with centers of influence--teachers, technicians--or prospects as they come into the reception and again during the intermission.
Dallas Steinway Hall's recital area has 75 seats in our recital area. The store requires RSVPs to invitations to ensure that those seats are reserved for qualified customers.
Planning these mini-concerts requires collaboration with local concert venues and the artists themselves. Typically they are scheduled on the Sunday immediately following an artist's major concert appearances. After the DSH reception Saliba takes the artist out to dinner, which gives store employees some time with the artist and the artist some time to sign posters and other materials. The symphony appreciates the store's taking responsibility for the artist's dinner and delivering him or her to the airport."
Mounting an artist performance event entails interaction with numerous outside parties, and therefore some additional complexity, but all of DSH's traffic-building promotions require plenty of work and planning. So what's the return on investment for staging multiple traffic-building events versus the same number of standalone sales? According to the Steinway system followed by Dallas Steinway Hall, the considerable amount of work these promotions require doesn't rest on the shoulders of the manager. In fact, in accordance with Steinway's promotion system, individual salespeople run traffic-building events.
"I'd like to say that I'm the person who plans all of these events," Saliba jokes, "but I couldn't run 42 events in a year! In reality, I plan only the four major selling events, the ones whose advertising budgets are $70,000. Our salespeople handle all the traffic-building events, which cost around $800 to $1,000 for some food, some champagne, and an artist. They can do that very easily by submitting a check requisition, and they can do it as many times as they want."
"Sharing" the promotional benefits of a traffic-building event--for example, an artist's performance--with other salespeople is at the discretion of the event director--in Saliba's words, "the salesperson who's willing to do the work. If the event director says he's going to fill all 75 chairs with his own people, he can have the entire hall." Often, though, it takes the prospects of two salespeople to fill the hall, and there's often some last-minute negotiating and cooperation among salespeople to accommodate the most promising prospects.
How effective are these events in the current retail environment? Saliba attributes Dallas Steinway Hall's success directly to adhering to Steinway University's formula for sales promotion. "If piano dealers aren't promoting their stores effectively--that's the key word--and giving customers a reason to shop, I don't see how they're getting customers, because customers sure aren't walking in the door by themselves these days. You have to develop them outside the stores. With the salespeople who don't do this, it's directly reflected in their sales results."
Saliba says that "there are a million excuses for discounting," and most of them, of late, have been pinned to complaints about tough market conditions. But he should know about tough market conditions. DSH's Dallas store is in the same market in which Brook Mays recently liquidated its headquarters. "The same year [investment firm SB Capital Group] discounted the heck out of all of its pianos, we had our highest gross margin year ever. I'm sure they got rid of all those heavily discounted pianos, but we didn't have to take a hit on ours.
"We never approach our jobs with a negative attitude," he continues. "We always go in from a position of strength. I would rather fulfill the customer's needs--even if I have to create that need--in a joyous way. We're not about discounting pianos; we're about the customer's joy of selecting an instrument, and we enjoy making that process fun."