Recently, Koss discovered that he and his reps have been chasing the wrong buyers at PriceCostco and Brookstone. Or that's what he's been told. And it was only after penning a letter to Kmart's buyer Hooks, several years ago, that he went "direct." The buyer replied, "It's good that you wrote me." The sales vice-president took that as a sign he should handle the account himself, and he says, "I will live and die by that."
Milwaukee, February 23 -- Hooks phones Koss to check sales projections. The Kmart buyer is planning a detailed presentation to his own boss. Koss grows hopeful. "I'd been told no by now in prior years."
It's easy to become agitated by the long selling cycle. It's said that even buyers grow weary. To alleviate the tension, Koss has taken up an aggressive form of gardening he calls "yardening." He has no patience with seeds; he plants large trees.
Sometimes the faxes, the phone calls, the Fed Ex packages, the trade shows, and the endless discussions about pricing, positioning, and turnover ratios add up.
Milwaukee, February 24 -- Kmart calls. It will take two Koss units. After four years of pitches, Koss will get 1,700 new outlets.
A few weeks later Koss is at work on a special Kmart promotion. He imagines a huge bin of earbud 'phones selling for $2.99. "It's great exposure," he says.
But $2.99? "The more traditional thinking is, 'Oh, man, that's dragging the name down into the dirt," he concedes. But from his perspective, he's buying tens of thousands of billboards for $2.99 each. "We've been talking about this a lot, our mission," he continues. "We had a very complicated mission statement. Finally, we all just looked at each other and said, 'You know what it is? We want a Koss stereophone on every head.' That's really what we want. Just like Taco Bell wants a taco in everybody's hand."
Milwaukee, April 26 -- John Koss is gratified to have added Kmart, Wal-Mart Canada, and Media Play as customers in 1995. He continues to improve relations with Target (which will test the SportClip at Koss's price), Wal-Mart, Sears, Best Buy, Service Merchandise, Bradlees, Ames, Lechmere, the Army and Airforce Exchange, the Good Guys!, Software Etc., and CVS. Circuit City, Office Depot, and OfficeMax still have him on the edge of his chair. And he's already admitting he'll probably wait until next year for Lowe's, Brookstone, and Caldor. As for CompUSA, the computer superstore, Koss says, "we're not even on square one."
HOW TO COURT THE POWER RETAILERS
The power retailers are all the same -- and all different. In the absence of a rule book, we offer commonsense approaches:
Take names. Ask around to identify absolutely the right contact at corporate headquarters. State your case on your own or with the aid of independent reps. And don't go above the buyer's head. Marty Burks, a buyer for Sears, is blunt: "If they don't know whom to get the information to, they're not going to get any consideration from me."
Leave your name. "You'll make six phone calls before you get a call back," Best Buy merchandising manager Bob Griffin warns. But "if a sales rep is a pest," he cautions, "that can definitely hurt."
Get help. Don't underestimate the value of a few good rep firms -- they eat rejection for breakfast. When you reach buyers, ask them for reps' names, but don't put them on the spot. Your company should be "rep friendly," but distributors and rack jobbers can also open stores' doors.
You oughta be in show biz. Trade shows are excellent places to be "discovered" or to meet the buyers with whom you've been playing phone tag. "I like to see people we'd otherwise never be exposed to," says Target buyer Teri Kohler.
Make your pitch. Be opportunistic. "A lot of it is the pitch," agrees Best Buy's Griffin. What impresses? Knowledge of the competition and the consumer. "If you're not customer driven, nothing else matters."
Watch the details. Follow-up is everything. Send out what you've promised. Pronto. After a trade show "there are a hundred people you have to see," asserts Jeff Martin, a onetime sales manager at Koss who now heads his own rep firm, House of Representatives. Be ready -- with promotional ideas and an advertising allowance -- for that next call from Wal-Mart.
Get the first order. This is a test and only a test. How you handle the initial order defines your product's nationwide rollout. One power retailer gave Lisa Frank, CEO of a Tucson arts-and-crafts business, a huge first order and requested immediate turnaround. "We scrambled," Frank recalls. The retailer did delay the ship date, but only after Frank met the deadline.
Get the next order. "Initial orders don't mean anything," states Jeff Martin. John Stone, president of Opus, agrees. Product innovation and snazzy packaging "got us in the door," says the Bellingham, Mass., manufacturer of bird feeders. "What you do beyond that is what keeps you in." Stone has invested close to $100,000 in technology to meet retailers' inventory needs.
SUPERPOWER SUMMIT: A LEXICON
The power retailers. Wal-Mart, Kmart, and Target combined operate more than 5,000 stores and account for 80% of sales among 42 discount-department-store chains.
Category killers. Specialty retailers like Home Depot, Office Depot, Toys 'R' Us, and Best Buy have seen their influence expand faster than you can say Newt Gingrich. In 1993 the category killers' sales were up 19.9%.
Regional discount department stores. After years of consolidation and brushes with bankruptcy, regional chains have revived. The strongest -- Caldor, Ames, Bradlees, Venture, Hills, and ShopKo -- kicked in nearly $12 billion in 1993 sales.
Warehouse clubs. Their popularity waxes and wanes. PriceCostco and Sam's Warehouse Club lead the pack.
Supercenters. Wal-Mart, Kmart, Target, and others operate warehouselike stores combining food and general merchandise; they stretch out to 100,000 or 200,000 square feet.
