Big retail chains are a competitve menace for the single store owner. Len Wallis Audio is fighting back by sticking to its market - and providing superior service.
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Entrepreneur: Len Wallis, Managing Director
Company: Len Wallis Audio
Business type: Retail - audio-visual
Founded: 1978
Turnover: $10M - $50M
Head office: Lane Cove, New South Wales
Contact details: +61 2 9427 6755
The Len Wallis Audio Story
Strong growth within Sydney’s retail audio-visual market has sparked enormous interest from larger chains. Single store specialists - such as Len Wallis Audio at Lane Cove - are feeling the heat. Managing director Len Wallis says that increased competition from the bigger players has affected business. The company’s turnover of $14 million last year was only slightly up on the previous year’s result.
Wallis says: “[In the past], the generic Gerry Harvey-type retailers would not look at selling expensive systems whereas now they’ll happily sell a $20,000-$40,000 system. They’re going very much upmarket, driven by such things as plasma screens.”
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Key learning points:
- Service - Provide comprehensive, value-added after-sales support to your customers. Make it attractive for them to do business with you.
- Product knowledge - Know your industry and your product range. If someone asks how something works, someone on staff should know the answer.
- Staff retention - Carefully research the backgrounds of potential new employees. Keep good staff by paying them well and looking after them.
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Len Wallis Audio is countering by restructuring its internal business systems to improve efficiencies but it has no plans for a fundamental shift in strategic direction. Instead, it will emphasise its reputation for quality, staff expertise and customer service. It will continue to focus on the upper end of the consumer audio-visual market.
Wallis says it would be folly to lose sight of that core niche market in a misguided attempt to beat the bigger players at their own game. He says: “Now wouldn’t be the time to do it anyway because I’d just start butting up against a whole bunch of chains. We have stayed with one outlet because we want to retain the specialty side of the business.”
Operating from one store may constrain the company’s growth, but it also means lower overheads. Just as importantly, it makes it far easier to keep a tight rein on internal systems, emphasising quality assurance and customer service. Customer satisfaction is more than a platitude; the business depends on it. Wallis says 52% of every dollar that his company takes is return business.
Tight business controls are reflected in the company’s decision to keep its own service division on premises so that a problem can be fixed on the spot. Wallis is appointing a co-ordinator to further improve service issues. The company also does its own installations and deliveries.
The installation and service side of the business has become more important, with Len Wallis Audio now selling to the technologically advanced “smart house” market. The company is hiring new staff, including a programmer, to focus on wealthy clients who desire a computerised home.
Wallis says any successful business must keep in close contact with its customers. His company publishes a newsletter to keep clients abreast of new developments. It also includes generic topics such as guides to buying a home theatre. In addition, clients who buy a system receive a personally addressed letter thanking them and providing contact details if they have difficulties with a product.
Wallis says: “It always comes back to service. There has to be a heartfelt desire to serve your customer. This is a capital item that we are selling and it is a capital item that lasts for a long time. We go out of our way to make sure that our clients don’t have a problem.”
Getting the right staff is essential. The company employs 34 people and Wallis says that all of his sales staff have at least five years’ experience in the industry. “We also try to bring our juniors up,” he says. “They might start off sweeping floors. We bring them through the system so that they learn the workings of the business.”
The company engages in ongoing staff training but Wallis says that finding time to get everyone together is one of his most difficult challenges. Vendors conduct much of the training.
Wallis says the company’s biggest challenge is trying to attain solid growth from one store. He is ambivalent about expanding or relocating - and there is more to the question than just finance. “I really like to do what we’re doing,” he says. “We tend to drive the business through our own interests rather than marketing or business sense.”