Down Economy Causes Small Market Stores to Think Big

Creative Three-Prong Assault Creates Business, Profits

By Spencer Brewer
Owner, Ukiah Music Center
Ukiah, California

The question is this:
What to do in a down economy, especially if you’re in a smaller market?

At the last NAMM show, I spent several evenings over wine and dinner with different retail owners, all sharing and brainstorming for ideas. I took several suggestions away and since have instituted each and every one of them with success.

First, a word about Ukiah Music Center. We are located in Ukiah, in the northern most county of the California wine country where we meet the redwoods in the mountains of Mendocino. We cover two counties in northern California, and in a survey done a few years ago, Ukiah came out number six on a “100 best small towns in America” list. We’ve been in business for five years and had an average growth of 18 to 25 percent a year. We grossed $750,000 last year, despite five other MI stores in the region going out of business in 2007 alone. This year our numbers won’t dive bomb, but will probably not make those of past years.

These are the things we’ve done that I believe have allowed us to have a good year despite the economic challenges.

Creating Community Awareness
We created events where community building is the focus—so called “soft guerilla marketing”—and thus we become “top of mind” when folks think about local music stores.

Acoustic Café We added the Acoustic Café, a summer concert series out back that featured a stage, holiday style lights, and Parisian-style catering and wine sales tables benefiting local community functions. We ended up selling out every concert. We highlighted local acts that performed “unplugged” in an intimate setting and it worked better than we expected. At intermission we opened the store and had folks check it out. These are people, mostly non-musicians, who otherwise would have never walked through our doors. Not only did we generate sales at the gate and percentages of the beverage booth, but upon polling the crowd, over 75 percent of the audience had never been here before.

We bought all of the tables and chairs at the local Goodwill and Hospice stores, so nothing matched, which people thought was way cool. We put on tablecloths (nothing matched) and glued vases to the top of old 33s, then filled the vases with flowers. We hung all the old junk instruments lying around on the walls for the “Walls of Fame” and it now looks like a cool instrument gallery/graveyard.

As far as our locals were concerned, we couldn’t hold enough of these concerts. They were cheap to do and the buzz we generated was huge.

Instrument Giveaway We started a giveaway program to school music departments of our pianos and instruments that were older, but still in good condition. At a time in California when virtually all school music budgets are being cut, these gifts not only helped the school programs, the local news media liked the stories and ran front page articles on them. It was the kind of press you couldn’t buy. We also were able to write all of these instruments off. Instead of selling some items way cheap and moving them on, schools need these items and we need the publicity.

Rock Camp We started our own version of Rock Camp for kids. We offered four camps outside on our Acoustic Café stage, gave away CDs of the gigs, and sold DVDs of the performances. We made money on the camps, but more than that, we got kids and their parents now upgrading and buying new gear. The best part was the concerts. All parents, friends, and family were standing up yelling for their kids and bands! Talk about developing a loyal following for our organization.

Makeover on a Budget
We made our store as people friendly, interesting, and as “cool” a place to hang out as possible.

Cool We have 2,500 square feet of retail floor space divided into four rooms, and we gave each its own cool vibe without spending a lot of money. For the front room, which held guitars, amps, and accessories, we closed in the front windows with wood panels and insulation (which also saves us 20 percent on our utility bills!). Then we put up plainer slat wall, which we picked up used on Craigslist. Next we bought sticky contact paper which was diamond plate simulated and applied it to the walls and cut out the grooves.

We also bought out a furniture store’s track lighting on Craigslist for $450, and redid the entire room. We put in new carpet ($500 at Home Depot), added new ceiling guitar hangers, and painted the ceiling black, which really helps. Now we have a room that customers want to hang out in, and including labor and a used counter we also picked up, we only spent $3,500.

Classy We needed the piano room to be classy. We painted two walls and the ceiling a warm brick red and the two other walls gold and hung inexpensive chandeliers. We then bought classic re-issue posters that advertised pianos or concerts and framed and hung them. You walk in and now you have the feeling of being in a old European castle room. I placed an old gramophone, vintage microphones, et cetera, and now people come in with their friends just to see the cool displays. Total cost with labor for this room was around $1,500.

Bold In our third room where the drums, keyboards, and pro audio products are, we went “in your face.” We did the same thing as the front room for the slat walls with diamond plate contact paper, painted the walls bright purple, painted the ceiling black, replaced the carpet, and added more of those Craigslist track lighting. The room now visually explodes and makes a statement that something exciting is happening there. The total cost for this room was about $2,000.

Serene Our fourth room used to be pro audio and keyboards, but we switched it over for print music and made it a place everyone wants to cruise through to see what we have. We framed 75 to 120 year old pieces of excellent quality sheet music covers and hung them throughout the room. It now looks like a gallery. We kept the room white because people are looking at sheet music and need to see. Total cost of the room was about $300 for the frames.

Wacky Finally, we thought about what will catch the customer’s eye when they are driving by whether they are interested in musical instruments or not? Well, why not throw an organ through the front window?

Not literally, but for a total cost of $500 (which was all labor), we gutted an old pump organ, sliced off three-quarters of it, and mounted it to the window frames. We then painted the cracks and from the road driving by, it looks like someone made a huge “owie” in our front window. This has been our best advertisement because it is the talk of the town.

The word on the street now is that Ukiah Music Center is one hip, cool place to come in to and check out gear.

Working Smarter
We believed it was time to get smarter with our ordering and inventory system and service to our customers.

Upgrade Equipment We tried a software program that did not work out so we upgraded Quickbooks.POS. We then upgraded QuickBooks POS to 7.0 and put into place reorder minimums. Now we print out a weekly list of what is needed, not what is wanted, thus keeping our inventory numbers down. We’re turning products quicker and I am not warehousing lots of inventory. The upgrade cost was $1,000 for two terminals from eBay, and is already paying off because now less unsold inventory on the books.

Spiff We instituted a system so that if any item is on our floor for more than six months, it is to be sold around cost, and the sales rep who closes the deal quickly, gets a spiff (a small, immediate bonus). It always amazes me that if I have been pushing a certain amp or guitar for months or even years, and there is no movement at really discounted prices, the second there is a spiff for my employees – whoosh, within days the item is sold. All I can do is shake my head at why, smile, and walk away.

Kid “Credit Cards” We give students credit cards! Well, they aren’t real credit cards, but they look like them. They allow the user a 10 percent discount on all items in the store.

These are made at Two Street Music in Eureka, California, and they have been great. When a kid buys anything in our store, we give him or her (not the parent) the card. There is such a sense of pride and ownership from the kids that they always want to come back here to use it. It immediately develops a long-term client at little up front cost.

Freebies With every purchase of a set of sticks, heads, picks, or strings, we give them a card and stamp it for every purchase of these accessories. When they reach ten of whatever they are buying, it’s free. Now this is not new, but what we call the card is what gets people’s attention. For sticks, the card states at the top ‘Got Wood?” On the strings, they get a ‘Well Strung” card. For drum heads it says “Great Head.” Regulars like this a lot and ask for the cards.

Have Fun, Get Creative
There are so many other ideas out there, but these are just a few that have worked for me. These were spurred by my behind the scenes talks with other owners, but the fun is in the pudding when you unleash your staff and state “have some fun, get creative, and cook up some interesting and unique ideas” – and they do!

The next part is also getting creative with how and where you get the materials and thus keep your costs low. It’s a matter of turning every opportunity into an advantage, and in these challenging economic times, we have to make our own opportunities and advantages.