Together, Milwaukee's Koss brothers, Michael and John, are expanding the stereo-headphone business their father started in 1958. In late 1991 they seized the day and entered the promising new market for computer headphones and speakers.
Today computer accessories are worth 25% of Koss Corp.'s $35.6 million in sales. Nurturing an unpredictable new product line has forced the brothers to be more disciplined at --
Â· Recruiting sales reps. Koss's longtime reps excelled at selling to stereo shops, but few had experience with computer stores. Rather than retraining them, sales vice-president John Koss decided to "split the line." He hired six computer-rep firms to take on the PC headphones and speakers in several key markets. "There was this whole other world of reps I didn't know about," he says. "You love the ones who have buyers' home phone numbers." Those independent reps brought in such retailers as Merisel, in Los Angeles.
Â· Forecasting sales. John Koss examines microeconomic and macroeconomic factors. "When you're in a hot market, you have to do more. You've got to look at that big picture." He keeps tabs on the size of the multimedia market, home and corporate. And he even watches shopping trends, strolling through malls to keep an eye on the ratio of Radio Shack bags to Gap bags -- the harbingers of holiday sales.
But the more Koss has absorbed about his 40 key accounts, the more he has focused on the micro trends. Koss gets sales and inventory data from individual retail and original-equipment-manufacturer accounts that let him analyze mass-merchant versus superstore sales, and isolate inventory turnover per item, month, and retail outlet.
Koss prepares three forecasts: "regular," "stretch," and "bomb." Sales reps, eternally optimistic, favor the stretch but are held to the regular numbers. The sales reps' forecast, though, is less rigid than a typical quota system. "Many factors affect sales. I know, I'm there," says John Koss. His job is to prepare for the best and the worst.
Â· Managing inventory. No salesperson wants to be stuck with too little or too much stock, so Koss works closely with manufacturing. "Each month, we sit down and adjust the forecast as we hear from the field," he says. "We don't just hand the purchasing manager a number."
And he's learned to stick to the plan. "I've had to say no to some big deals because there wasn't the inventory," he says. The discipline protects against the one unforgivable sin: promising the customer more than can be delivered.* * *