Harman Luxury, JL Audio, Integra Named to Azione Advisory Board
Azione Unlimited, the nascent buying group for custom integrators and retailers, delayed its launch by a month but named five of 11 founding members to its advisory board, President Richard Glikes told Consumer Electronics Daily Tuesday. Glikes is targeting 11 board members “to have an odd number and have one more dealer than vendor,” he said. He'll firm up the remaining six board members -- four dealers and two manufacturers -- after meetings at CES, he said. “After those meetings I'll know exactly who’s with me and who’s not,” he said, and post-CES he'll finalize vendor programs and release them to dealers.
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The five launching board members are David Daniels, CEO of Electronics Systems Consultants, Aspen, Colo.; Mike Thul, founder of Thul Electronics, Vail, Colo.; Andrew Oxenhorn, president, JL Audio; Keith Haas, director of sales for Integra; and Philip McPhee, global sales manager for Harman’s Luxury Audio group.
Glikes originally planned to launch this week but pushed the inaugural date to Feb. 1. “I'm a month behind where I wanted to be, but CES is critical for face time, and trying to put a group together in the holidays “is a formidable task,” he said. Dealers weren’t thinking about a new buying group during the holiday season, he said. “They were concentrating on their own business.” One month in the long run of an organization “is no big deal,” he said.
Regarding the number of dealers who have committed to Azione, Glikes said it was a “difficult question to answer because I'm not really allowing anyone to join until CES.” By the end of Q1, he expects Azione to have 50 dealer members and by the end of 2012 he’s eyeing 150 dealers total. He anticipates reaching his target maximum of 250 dealers by mid-2013. In its member search, Azione is working from a database of more than 750 dealers, he said. “Dealers will recommend other dealers,” he said. The number won’t exceed 250 dealers for competitive reasons. “I don’t want two dealers from the same town,” he said. “Why would you want to give tips to your competitors?” he said.
Ninety percent of dealers who have shown interest in becoming Azione members are not currently with another buying group, Glikes said. “I'm trying not to be a poacher,” he said, although he is talking to dealers with other groups. The database splits evenly between members who are in groups and those who are not, he said. To the ones who aren’t in groups, “it’s found money,” since the group will give dealer members $1,000-$2,000 worth of “free marketing,” he said. Azione is further enticing dealer members with free lodging and meals for the group’s three member meetings to be held this year.
When asked what would make a buying group attractive to dealers who haven’t joined existing groups such as the Home Technology Specialists of America, PRO Buying Group or HES, Glikes said they are “probably uninformed.” Dealers making more than $1 million in annual sales (Azione is targeting dealers doing volume of $1.5 million) will come out “in a plus situation” in a buying group, he said. Savings from rebates, discounts, and demo programs add up to a larger amount than the dues, he said, “so why in the world wouldn’t anybody who ends up with plus dollars not be in a buying group?” The additional benefits Azione offers over other groups, he said, include marketing and meetings where they can share ideas and learn from each other. “If you're able to question your weaknesses and see if there are solutions and then share your strong points, then everybody gets better,” he said. Idea and information-sharing, he said, was the “number one benefit of HTSA,” the buying group Glikes left in August after a contract renewal dispute.
Glikes compared what he’s trying to do with Azione with PARA in its early days, prior to being folded into CEA. PARA dealers came back from meetings with “a dozen ideas,” and they'd implement two or three of them, he said. “It was well worth the price of admission, and that’s what we're trying to do for them,” he said. He referred to roundtable and panel discussions and guest speakers: “We'll be very similar to early PARA conferences when it was 100-150 people."
At the same time, Azione’s “value proposition” will attract members from other groups, Glikes said. Those dealers are “more excited” about the advantages offered by Azione since they can continue to “do what they do and get a deeper discount.” He said the arrival of Azione will “make other groups stronger” since others have to offer “more value and more substance.” But David Young, president of The Sound Room, an HTSA member retailer, said HTSA makes the most sense for his business and he doesn’t believe any HTSA member would jump ship because of Azione’s larger group focus. “We have the crème de la crème dealers,” Young said. “We're not looking for 250 dealers … . We couldn’t handle 250 dealers."
A few plans have changed since Glikes put out notice of the new group last summer. “You have to be nimble,” he said. Originally, Glikes planned to charge a $500 membership fee and $1,200 per quarter, or $4,000 annually, for dues. When dealers balked, telling him “it’s tough out there,” Glikes adjusted the dues to $1,000 per quarter. He made changes in the vendor lineup, too, but wouldn’t say what they were. “I've seen some people in a different light so I've chosen to go in a different direction,” he said. Dealers will get $1,000-$2,000 of “free marketing,” Glikes said, referring to the organization’s website and a “leave-behind” brochure Azione has developed for architects or Parade of Homes events where dealers will be able to promote their custom business to new clients, Glikes said. He calls the brochure a “possibilities book.” Most people don’t know about networking or lighting control, he said. “We'll show the possibilities in nice environments and give them ’soft brushstrokes’ on how we can integrate it in their home."
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HTSA added Pakedge Device & Software to its vendor roster as part of the buying group’s mission to support the growing role of networking in residential custom electronics, the group said. Pakedge’s “higher performance” wireless and networking products will enable integrators to offer “more features with great reliability” when installing networks into their clients’ homes, said Bob Hana, managing director of HTSA.