My wife and I enjoy cruising. During meals, we are usually seated with new acquaintances. As so often is the case, the “What do you do?” question will eventually surface.
In the ‘80s, my response was that I was a music educator and sold musical instruments in NYC. The comments and the smiles were immediate. One person would say, “I love music,” and another person would say, “My children take piano lessons.” What followed were conversations filled with joy about an activity that captures the deepest of human feelings.
By 2000, I was forced to close my music business – MIDI hardware and software 1.0 required more knowledgeable workers than I could find and afford – and was later recruited and trained by one of the largest wealth management firms on the planet. Along the way I qualified as a licensed investment professional and obtained a Financial Planning Certificate as well as a Certified Wealth Strategist designation. The dinner table conversations then took a dramatic shift. When the subject of wealth management and succession planning came up: Silence….
Given my music background and financial training. I believe the future of music retail requires establishing a culture where employees are sharing and managing knowledge with their most profitable customers. It’s no longer viable to place most of the focus on tangible assets such as inventory turns. To successfully compete against the “Amazons” of the world, the real value is in your intangible assets including customer relationships, knowledge, culture, customer loyalty, as well as in your customer relationship management system, also called CRM.
Look how the market values Microsoft’s tangible assets versus its intangible assets. A key tangible asset for Microsoft is its headquarters in Redmond Washington. The value of the building is $1.2 billion. By contrast, Microsoft’s intangible assets, which consist primarily of its global human capital, are worth $500 billion!
Intangible assets must be measured and managed. And since you won’t find intangible assets on your balance sheet, they’re easy to ignore.
My column will offer sound advice to help the MI retailer:
• Grow and monetize its intellectual capital: its knowledge assets
• Train employees to be Value Creators
• Get profitable customers to keep coming back
• Build a culture of knowledge sharing
• Implement a customer learning process
• Accelerate business value now, and maximize value when it’s time to exit
Let me share an experience with you. I was recently on a cruise celebrating our 40th wedding anniversary with my wife. In our hurry to get to the airport on time, I left behind my travel guitar. When we got to our destination, I was able to locate a music store, which rented acoustic guitars. The staff was extremely courteous and even threw in a gig bag and some picks. Still, as I was walking out, I kept thinking what a missed opportunity for the sales person to get to know me by asking me some questions like, “What style of music do you play?” Or perhaps, “How often do you travel?” Or even better, “What type of guitar would your ideal rental instrument be?” In other words, learn about my music habits and what was important to me.
Tapping into, and successfully managing your intangible assets, is key to growing the value of your business and selling it profitably. Want more proof? Take a look at the company that sets the standard for customer service, education, and knowledge sharing: Sweetwater. Chuck Surack, founder and president created an enormously valuable and effective culture.
I first met Chuck in the mid-1980s at a NAMM show, when we both fell in love with the Kurzweil K250. With a lapse of 30 years since we had last connected, Chuck was kind enough to re-introduce me to the folks at NAMM, which triggered a series of speaking events at NAMM Idea Center, writing opportunities for NAMM U, and writing columns for trade magazines. This singular introduction allowed me to connect my musical past, and also with my passion for financial education by helping MI retailers unlock the wealth trapped in their business.
I first read MMR as a young music retailer. It was my “go-to magazine” when I was looking for new gear. The magazine has a storied history which dates back to 1879 and, under the editorial helm of Christian Wissmuller, and its publisher Terry Lowe, MMR is well positioned for continued growth. It’s an honor for me to write a column for the magazine. For those that plan on attending Winter NAMM 2018, I invite you to my talk at the NAMM Idea Center titled: “5 Ways to Add Value to your Business – Fast!”
I will be exploring value-building activities – employee talent, processes and technology, customer relationships, community outreach, and professional and personal fulfillment – to capture opportunities and ignite innovation in your business. This session has been designed for owners, and key managers who are aspiring owners. I believe brick & mortar music retailers, who continue to innovate and create new services will successfully compete against the “box pushers.” After all, Amazon can’t shake the hand of your customer, and ask them how their granddaughter is enjoying her piano lessons.
Jaimie Blackman – a former music educator & retailer – is a certified wealth strategist & succession planner. Blackman helps music retailers accelerate business value now and maximize value when it’s time to exit. Blackman is a frequent speaker at NAMM’s Idea Center and a freelance writer for MMR’s “The Sound of Money” column. Visit jaimieblackman.com to register for educational webinars and to subscribe to his podcasts.
