Wednesday, January 7, 2009

Finding Your Niche, Part 2

Continuing with yesterdays post on Finding Your Niche, another thing that we did was to focus on certain accessories. Accessories in a musical instrument store can run up the inventory dollar cost quickly, especially in things like guitar effects pedals and other electronic items. So we decided on a niche in our accessories that was totally compatible with the guitar niche: Guitar strings. To keep good tone, guitar strings should be replaced regularly.

So we decided to go into some serious depth in strings. A few advantages were clear: 1. we could carry a wide and deep selection and have strings that other stores would have to special order, such as individual strings for custom gauges or replacing just one broken string. 2. we had a strong base of guitar students, so there was consistent demand. 3. we could create a marketing system that would help to keep business coming back--the String Club.

We chose a 6' wide section of wall and ordered up some nice spring loaded displays so the strings were attractively displayed and people could instantly see the volume of strings we carried. Because strings are a fast moving commodity, string discounts were very good and considerably better in volume. By buying in quantity and taking full advantage of maximum discounts, we were able to discount the strings to our customers and still have a full margin, unlike everything else in the store.

Next, we started the String Club. We had cards made (actually, we typed on the back of our business cards . . .) and we gave 10% off each set and every 4th set was free. This amounts to a 33% discount at the 4th set, but if they stop buying prior to buying the 3rd set to get the 4th free, the discount was just 10%. Sometimes people would buy three immediately to get the 4th free. We had a special punch to punch their card to show where they were in the buying cycle and we also had a master sheet at the store. The String Club was one of the best things that we did. We sold a serious number of strings and had the largest selection within 50 miles--all on our relatively small budget.

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