Some years ago, at my former company, I analyzed a season’s worth of rental and lease contracts, and found that only 27 percent of them had any add-ons at all.
That meant that over 70 percent of our customers left with no accessories, no maintenance or theft coverage, not even a method book. Most clarinet and saxophone players left without reeds. Few customers came back later on for the supplies I knew they’d need just to get started playing. As the newly appointed band and orchestra manager, I found this appalling.
1. Employee Incentives
So we set out to change our employees’ thinking. We offered spiffs for certain percentage of add-ons, and for the employee with the highest add-on dollar amount each week. We ran a care kit “contest” where employees earned one dollar per care kit sold, and the employee with the most care kits sold for the season got an additional $50. We put little colored dot stickers on each care kit, and employees collected the dots on a form which was turned in weekly. This became a huge game –people hid each other’s dot sheets; one even had a teddy bear “steal” others’ dots and hold them “hostage”… in exchange for chocolate. It turned out to be a great morale booster, as well as an effective way to change our employees’ thinking. By the end of that fall, our add-on percentage was up to 92 percent. And in the eight years that followed, the percentage of add-ons remained over 90 percent each year.
2. The Soft Sell
When I founded my own company in 2009, we were determined to make add-on sales on contracts a priority – not only because of the potential profit, but also because we knew how aggravated our customers would be to learn we didn’t adequately prepare their children for the first day of class. That being said, we knew parents would have “sticker shock” at the prices of the instruments and be hesitant to spend even more on other stuff when their children didn’t even begin playing yet.
So we developed more of an informational, “soft-sell” approach to add-ons. First, we created a “Welcome to the… (Flute, Clarinet, etc.)” handout for each instrument, written from an educational – not a sales – perspective, reinforcing that our concern was not only sales, but also ensuring their children had the best possible start in music. It includes basic instructions for instrument care and assembly, and a list of “things your child will need to succeed in class.” Parents get this handout early in the rental process, so they have time to read through it; instead of us having to talk parents into accessory add-ons, they now say, “Oh, and we need (this) and we need (that)…”
Our Welcome sheet mentions the need for each instrument to have a check-up and adjustment at least every six months, which paves the way for our conversation about coverage. We compare this to regular oil changes for a car – “You can neglect to do them for a while, and all seems fine. Then one day, your engine seizes up and you’ve got a real problem.” So instead of being seen as “piling on the charges,” we are seen as helping them keep their instrument “running well.” Customers are then asked to accept or decline our coverage on the contract (and initial), so they understand that, by declining, they are taking responsibility for maintenance and repairs on their own; this often re-opens the discussion, and gives the customer another chance to reconsider.
3. The Total Package
Packaging is a great way to help boost add-on sales. Our “Encore Package” includes the child’s “textbook” (method book), a folding stand for home use, and a care kit (with instructions and a coupon for one free lesson in our Conservatory) – all at a discounted price. Employees are taught to explain why each component of the Encore Package is necessary to give the child the best opportunity for success in music. Because we offer the folding stands in a choice of colors, the question is no longer, “Do you want a folding stand?” but “What color stand would your child like?” Referring to the method book as a “textbook” helps reinforce that music is (recognized by federal educational policy) an academic subject, just like math, science, history and English – it’s not “extra-curricular” or “co-curricular,” regardless of what parents and administrators may think. Lists posted on the wall over our method book section help parents find the correct book for their child’s particular school and grade easily. This helps reinforce that we work closely with the local band and strings teachers, and are aware of their requirements and preferences.
We make our own packages of reeds too – we buy in bulk (to take advantage of the lower cost per reed), and re-package in packs of five (with our own header, for additional branding), at a discount price. Since we opened our doors in 2009, nearly 100% of our beginning clarinet and saxophone customers have left with a pack of reeds. Nothing is as frustrating to a beginning reed player (or that beginner’s teacher!) as not having one single playable reed.
In his book, Retail Truths, Chip Averwater notes that, “profit is the sum of a thousand little improvements… every missed detail comes directly off the bottom line (p. 43).” Each of these strategies may seem like a minor paradigm shift, but all together they have had a major impact on our add-on percentages, and with that, our bottom line. We are consistently showing a 95 percent add-on rate for new leases and contracts, where very few customers leave with only an instrument and no coverage or accessories. More importantly, these strategies have also emphasized to our customers – parents and educators alike – that our foremost concern is not profit, but helping to strengthen our local band and string programs and create more successful young musicians.
Tracy Leenman is the owner/CEO of Greenville, South Carolina’s Musical Innovations – named NAMM’s 2015 Dealer of the Year this past July. Leenman has over 40 years of experience as a music educator and over 15 years in the music industry. Tracy has been a longtime, valued contributor of articles and editorials to both MMR and our sister publication, SBO.
