It’s the last weekend to turn in your heaps of metal (once referred to as cars) as Monday, September 24th, marks the last day of the US’s Cash for Clunkers program. With the $3 billion of government funding quickly running out, the program has thus far amounted to 457,000 car deals and pay outs of $1.9 billion in rebates (per CNN.com this morning). The “success” of the program is yet to be determined, but car dealers need to hurry to be sure to submit all necessary paperwork (which I hear is a BEAR and quite extensive) by 8pm EST on Monday. Regardless of the outcome, this element of the government stimulus package certainly injected some much-needed consumer activity into our waning economy.
This week, Home Theater Review’s Jerry Del Colliano posted a great story “Cash for Clunkers – Meet the AV Business” article. It is a good read that likens the struggling custom install consumer electronics industry to the plight of automakers. Though GM, Ford, and the “lucky” car dealers (the definition of lucky yet to be determined) are benefitting from TARP program funding, there are plenty of other dealers throughout the country who are equally struggling to move inventory.
The Las Vegas market is one of the many nationwide to be virtually devastated (not to be dramatic, but the news makes the once burgeoning community sound like the ghost town of old) by the current economic climate. HTR’s article focuses primarily on one high-end AV dealer that is weathering the storm thanks to ample investor funding, but “Craig’s” business is being burdened by older AV product in its showroom and a plethora of inventory.
“Cash for Clunkers – Meet the AV Business” notes the “lip service that AV manufacturers give towards ‘dealer support’… You’d see how you could get an extra five percent off a nice big new order to help offset the trade-in costs. Everybody wins and everything moves forward for the first time in over a year in the world of specialty audio-video.” Well, that is exactly what Runco, a leading manufacturer of luxury video solutions in the custom CE installation industry, intended with its TradeUp and TradeOut program that launched earlier this year.
Residential Systems magazine’s editor-in-chief, Jeremy Glowacki, recently spoke with Runco’s VP of worldwide sales, Bob Hana, about this very topic; providing value to Runco customers and Runco dealers for older product and putting that value towards new, upgraded gear for their homes and showrooms.
In a recent conversation, Hana reminded me that step one of fundamental selling during tough times is to reach back to past customers, especially because so many new technologies have been introduced recently. “A lot of things have changed in the last six months to a year in this industry,” he said. “You’ve got every excuse in the world to upgrade. There’s the 2.35:1 aspect ratio, 1080p video, and Blu-ray.”
Though the specifics of the program is a mixed recipe consisting of a little of this and that, from both the dealer and manufacturer, the program has proved to be successful for those taking advantage of the opportunity. Time will tell if Runco, like the TARP program, was overwhelmingly successful in its efforts to inject sales life, activity and profit into its dealers’ businesses, but thus far, feedback has been positive.
“Runco is creating a sales opportunity where there otherwise might not have been one,” said Gramophone’s Josh Shobe about the program. “Right now, that kind of support is invaluable.”
Posted by: Katie