Brian Mundy says it seemed like we were talking to a lot. of camera stores, so today we ll be talking to a train store, somebody who sells

Transcription

1 Mike and Steve Rausch Colonial Photo & Hobby Orlando, Florida Mike Rausch (left) and brother Steve Rausch DIMAcast March 2011 Brian Mundy says it seemed like we were talking to a lot of camera stores, so today we ll be talking to a train store, somebody who sells Lionel and other model trains. And oh, by the way, they also sell hobbies like remote control cars, remote control helicopters, airplanes, boats and you know they do framing and processing and camera repairs and they even sell cameras. What don t you do Mike Rausch? Not a lot, because if it s something that will bring people in that have never been in this store before, we do it. As a matter of fact an excellent example of that would be when we started doing the cordless telephone battery and 1

2 keypad repairs and a cordless phone back then cost, I don t $150 some of them $180, so people were looking for places to fix them. The Ma Bells were breaking up at the time and we were putting a new phone system in the store and the guys who were doing the install taught my dad how to fix phones. So he started a phone repair business as a side to the Colonial Photo and Hobby. He learned how to fix them and the funny thing about it was all the people that would come in that had never been in the store before, to get their telephone fixed. When the Ma Bell s broke up into the Baby Bells, they ran an article in the paper all about it and we had a line in the paper and it was the center of the whole page and it said Colonial Photo and Hobby says they fix telephones from five dollars up. My dad had gone on vacation for a week. He came back from a cruise. We had 150 telephones sitting in his office ready to be repaired. So a little clip like that and all of a sudden there s all these new people coming into your store, that have never been in before, that see what you do. Now Colonial Photo and Hobby has constantly been changing in a way who you are and yet at the same time you re the same old outfit was banner year? 2

3 Unbelievably good. But this year is just a banner year as far as business. It s been wonderful for us; we re very blessed doing business like we are. How was your profit for 2010? One thing I have noticed, last year we went through and did the Friedman series, which helped us learn to look at business differently learned to track each person s sales, help to work with each person to bring their sales up, but what I ve noticed is when the end of day runs, I always go and check profitability now. It s just part of the sales report that prints out. And although our numbers are up, the nice part is, our profits are up two to three percent over last year. Your gross margin is up Gross margin, yes. - points? Yes, yes points, sorry, thank you for clarifying that. A lot of it because our employees are starting to pay more attention to profitability of a sale. Everybody knows you have loss leaders like tomato soup in a grocery store. We have lenses and bodies that are very hard to make a profit on, because there s so much action out there bringing the price down to cost. You know, everybody s got the best price. Our goal is, how do you take that, market it 3

4 and turn it into a profitable sale, and it depends on the add-ons and the cases and kits that you develop and we have learned, in the last year, to get better at that. I would say of all the things we ve done marketing wise, just working our internal sales, getting our employees to sell more profitably. Fantastic. How many folks work in the store? About 30 people on payroll. Eight or nine in cameras, three in hobbies, three in trains. We keep an on-staff train repair man, we keep an on-staff camera repairman now, and also we have four people at our front desk, which handle processing only and general store ring-ups. They have cash registers for that, but their primary thing is taking in the processing and we have two framers on staff, picture framing. Now when we say we, who is we? My brother Steve and myself. With 30 employees, you do a lot of training? Like today we have Sigma, now we didn t use to carry Sigma lenses, so now we re carrying Sigma, we ve had them for Lunchtime training at Colonial Camera 4

5 about a month and a half, so today we re having a training class where will bring the rep in and he ll buy lunch for the guys it s not required, you do not have to come, but the lunch is pretty good and if they come they get to eat a good lunch, so they come and they really want to learn. So they take their lunch hour for a free lunch and learn something. Inevitably, they re going to sell more products because of it. And on Saturdays? Saturday morning is the normal store meetings, That was out of the Freidman group too. Of course everybody knows you should do these things, but until somebody pushes you and you pay money to have somebody tell you to do these things, you tend not to do them and then you think okay I spent money, we need to start doing these things. So we have a store meeting, remind people of what camera s aren t moving, what things to push with the camera s, the... package deals that we have going, yeah that was a very, very important thing. I think we got that a combination from the Freidman group and from 5

6 Tony Miresse, the kit king and in all fairness, David Guidry from Lakeside Camera gave an excellent talk about doing store meetings. I got real juiced up on it. And David Guidry is definitely right, having a store meeting every week is very important. So Steve, tell me a little bit about what you re doing with these kids running around the store. The school s all have school projects and they ve gone beyond that into there s afterschool programs now that involve building bridges and we go beyond that too, because of Boy Scouting and that type of materials, but in our hobby industry, it s always been our philosophy to help teach kids and be tolerant enough with them to encourage teachers to send people to us, to help them with their projects and we ve developed that quite well. One of the local schools does kite building; they send about 180 students over here. They all tend to show up and we teach them how to build a kite and their required to fly that kite on kite day at that school, it s part of their math program. Now why would you teach kids how to fly a kite? Well, it s not how to fly the kite. 6

7 That s right. Oh. It s how to build the kite and when the kids come in, the parents are right behind them and that s a whole bunch of people that have never been in our store. You know, it s a draw. It brings them in here, they look around, the kids tied up for minutes learning how to do what he needs to do for school, parents out walk around the store and look at everything else in the store. So you re seeing the kids as a traffic driver? Absolutely, I have no problem with helping kids do their projects. It s ways to get people in your store that have never been in before. We paired up with the Art School to teach some classes for us, because about five years ago, I just didn t have the time or the set-up to do classes, so I paired with the local School of Art, which not for profit art school they teach oil painting, acrylics, they teach sculpting and they teach photography and they re very good at it, the idea behind it was they have enough of their own students that if I paired up with them and let them teach 7

8 my photo class they would send people into the store for the supplies they needed for their cameras and it would just be another avenue of new customers. One of the guys that I got into doing radio control airplanes, indoor radio control airplanes, you can fly inside the gymnasiums now, they re small enough and light enough, he actually did a talk at his fifth grade daughter s school. So then next year he got the idea of starting an afterschool program for the kids to learn how to build and fly radio-controlled airplanes. The principal says well these afterschool programs are going to have to get at least 20 kids to sign up. He s like, man, okay I ll see what I can do. He had over 80 people sign up for that program, this year he did it again and he had over 130 kids sign up for that program. Wow. You do a lot of radio right? Radio Advertising. We actually did a radio show on Saturdays and what was nice about it is the radio stations they normally couldn t sell the time anyway, so they wanted people to fill in these one hour spots and if you listen to any of the talk radio shows on the weekend you ll hear them you ll hear the attorney talking, you ll hear the realtor talking, but out of the box things like 8

9 photography and hobbies, that s something different to them, so they loved having us on and we did it for three years and then we quit for three years. Because I was still running ads on those stations, they thought my radio show was still running and Steve and I would go down and do the radio show on Saturdays when we did it and it was successful, so we started doing it again three years later. I think advertising s very, very important and we ran some ads one year through the newspaper. They called them TOMA ads, Top Of Mind Awareness and what that means is when somebody thinks to buy a birthday present, they think of you, not somebody else and unless you re in their face on a regular basis, when it comes time to making a decision of where to go to buy a camera, to buy a train or a hobby or anything, if you re not advertising, they forget about you. Yep, you got to be there. You definitely have to do the TOMA thing. So anyway you can put your face out there on a regular basis, you got to do it. And I ll tell you something else too, when we run radio, we only run every third week, roughly. Some stations I ll only run the morning, you 9

10 know, or I ll only run the evening and one station I ll only run the weekend because they have Sunday morning acoustics. So I said give me only the weekend and I must have the Sunday morning acoustic spot and I want to be the guy that actually provides it to them that day, you know, Colonial Photo and Hobby brings you the Sunday morning acoustics. I was amazed at how many people, because they consistently heard that message, told me they heard my radio ad, now we ve been open since 1954, these are people that never actually heard ads from us before, so I knew this avenue was working, so then I starting thinking okay then it s more important to be consistent, be on a lot in one week, disappear for a week or two. It s amazing how many people say, I listen to you all the time, but they only hear an ad, it s back top of mind awareness for them, they they oh yeah, Colonial Photo and Hobby and I got to take the kids in there this weekend, you know, just because I haven t been in in awhile. Your son and his buddy was listening to a radio ad Oh yes, we were driving home from Scouts one night and we turned the car on, we got in kind of like the beginning of the ad, but not quite the 10

11 opening lines of it and he s listening to the ad and it s a general store ad, so it hits on the trains and the hobbies and the photography and it ends up with picture framing I believe, anyway he punches my son, he says now that s a really good ad, listen to this ad, it all of sudden hit the end of it and it says Colonial Photo and Hobby, he goes, Oh my God that is your dad s ad!. I knew at that point it was an effective ad, because he stopped and listened to it, he didn t even know it was our ad yet, but he pointed out to my son, you ought to be listening, you got to hear this ad. Download mp3 from to hear the radio ad What do you think? Effective, you like it? Well obviously! Your son s friend liked it. Yes. That s important. Well my wife liked it too, so I ll play them for her and she said that is just a killer ad, she said it says everything about the store, it sounds uplifting and fun, it sounds exciting, you make people want to go in there, well that s my wife what else is she going to say? So you know, but when his best friend tells him, now you know that s real public. 11

12 Yeah, let s listen to another one. Download mp3 from to hear the second radio ad Now you notice at the end the little hook of we do that too, you know, picture framing, canvas prints, digital camera repairs, we do that too. It s a quick tag at the end and it makes it they ve listened to the whole ad and here s this new thing, oh they do that too, no kidding. So part of your tag line always is something that we do that too. Something. Maybe sensor cleaning, canvas printing, doesn t make any difference you just keep throwing stuff in there. Sometimes it s hobbies, sometimes it s trains, if it s around Christmastime it s trains, you know, model railroading if we re running say a photography ad we ll throw in 12

13 something about hobbies or trains to make them want to come, or picture framing. And I have a lot of framing stores around us, but this at least makes people say oh yeah, well heck I m in there all the time maybe I ll have them look at my picture framing and Steve, you were talking about how some people come in and they ve been coming in for years One of the ladies was picking up processing in our processing booth is up in the front, she s walking around in back of the store, one of my employees says see you shopping around what are you looking for? She goes, No I ve been coming here for years only I never knew you had all this other stuff in here. She d never went past the front booth, couldn t believe it. One of the things we learned at a PRO show was parents worry a lot about their kids, you know, because they bring kids in so I know that with the kiosk a lot of people will put in a kids area, well we ve put a small train set right by the photo counter to where when the parents are shopping for cameras if they ve got kids we march them down to that area so we can show them the camera s and we know the kids will play with the train set. 13

14 It s the train set that has the wooden trains so you don t have to worry about electricity or tearing it up or anything like that Thomas the Tank, wooden trains and that age group, you know, it s like oh by the way we do sell that, it s right over there in our train department Yeah because the kids not going to go out of there without screaming sometimes, you know, they get so into playing with that train set, parents are like okay, it s time to go and they re like wait a minute, I m not done and they re like now it s a discussion, you know, so it s like why don t you just go 14

15 over there and buy one of the little tiny ones, take it with you. Buy and engine and give it to them, that ll satisfy them. Now we also have the hats and the whistles and coffee mugs and signs and I mean you want that to decorate your kids room in trains, we ve got stuff to hang up on the walls, you know, like Penn Central and brand names, it d be like buying a Nikon sign or something like that, but it s trains and what kid doesn t like trains? You re doing a lot of canvas... Canvas... we keep a canvas mounted print at the front desk, it s actually on the front of our processing booth, which is slightly elevated so they can see around the store easier when they re waiting on people, if you notice in our photos department, we have 30x40 images up high, there s six or seven of them up there that right now they have bird shots on them and animal shots, because we ve partnered with the local Audubon society s photo contest. Now you ll see salamanders, or turtles, their rule is it s got to be something out of Florida, it can t be any other animals that aren t found in Florida and it s got to be no cut grass, no concrete, no manmade structures of any kind, so by supplying the gift cards for 15

16 them, which is a minimal amount of money actually. I get two years usage out of the winners. And they went from 130 entries the year before we got involved, to over 450 entries and up. So they ll have their contest and they ll judge, if they re a winner we put all the information next to the photo, or we just put image from The Chertok Orange Audubon Society Nature Photo Contest. And so we get to use the images for free, people look at them, so as you re selling camera s and they say well, you know, it only has 10 megapixels, well look at that image up there on the wall, it s a 30x40 image and it s only a six megapixel camera. So I get to use that photo for free for two years. The person still owns the rights to their photo, but they can t wait till we put them up. Yes and they got to tell everybody they know that their picture s hanging up in our building and they re going to bring their family into see that picture and any relative that comes in during the whole year. We do one more, you saw our window s out front, they re 18 feet by 6 feet high, we actually do a window for the photo contest announcing 16

17 these are the winners from last year, are you entering this year, you know, are you going to be a part of this? A couple of people come in and they re shopping and I see kid shots or something, or I m looking at their process and I tell them about canvas prints, I go up front, I grab the canvas print and I said look at this image, is this not spectacular? It s just a picture of a river, but it s on canvas therefore it has more emotion; it almost looks like an oil painting. I said now you do that with your family shot, sitting in a tree trunk somewhere you know, and you ve got a great image that fits above your sofa. Hang it up. Make it big, you know, don t make and 8x10 or 11x14, or 16x20, make a 20x30 and I talk a lot of people into canvas pictures just showing them a sample of a canvas print, I put it in their hands so they can hold it... another point that that kind of helps you with is through the Gold Star project that we entered last year with the Freidman group, you are required not to introduce yourself to somebody with can I help you? You have to say anything, but that, you know, so kind of hard to do that a lot of times, but 17

18 anytime you see somebody looking at an image well if they re obviously looking up at that image it s real easy to walk up and start talking to them about an image and getting them to relax in the store. We all look at coming into a photo store as something that s simple. But to a lot of people, it s very, very intimidating. And we try to make the point is like, you re going to buy and expensive camera, you may not buy it from us. We hope you do. But if you don t, you still come back and ask questions, because we want you to take great pictures, because when you take great pictures you re going to blow them up big like that and hopefully you re going to think of us and you re going to get them printed here. And when you think about the fact that if you had a better lens on that camera, well maybe you ll buy that better lens from us. Which brings up classes. It was Mark Comon at one of the PRO shows that was talking about doing classes and he said Mike just do a class, start it, get it going, do a class, I don t care what you teach, but get a class under your belt so that you feel comfortable doing this and then just build it from there. 18

19 I said okay, but I got to get the curriculum, he says I ll send it to you, I said send it to me, I ll pay for it. He sent it to me. I paid him for it. He goes you don t have to do that. I said, Yeah I do. I said, Because if I pay for it, it ll make me do the class. So we started doing classes and he is great at classes. And it makes us want to do more classes. It s not uncommon for people to take a class, see something and go downstairs and buy it. And you show them that stuff when you sell them the camera, but their inundated with things you re showing them so they don t pick up on half of it and all of a sudden they come back to the class and they re like oh that s a really cool thing and you re thinking I showed you this when you bought the camera, but you now see it in a different light, in a more relaxed atmosphere to where you re not in the buying mode, but you re in the learning mode and oh that will really help. Lot of profit can be added on from classes. What do you see for 2011? Better. 19

20 Even better, you know that the media told everybody to use cash this year, next year they re going to forget why their Visa cards are empty, spend more money. And the economy is coming around, remember, you saw it on the news, it s getting better and better, so 2011 it s going to be unbelievable. What do you think of PMA being in September, being called CliQ? It s a wonderful thing, PMA. It ll be an important show to be at, it ll be industry supportive and anybody that doesn t go is missing a bet. If you don t learn something at a show that doesn t pay for that trip, you re not talking to enough people and it s not going to the show that s important, it s who you talk to at the show. You know, who do you network with, who do you have lunch with, what rep do you get to talk to away from your business that you re not hearing the phone ring and people bug you. You know, where your brain gets to think for a change and it s thinking, you know, what am I going to do going into Christmas so PMA, CliQ, it ll be fine. I m looking forward to going. 20

21 Steve Rausch, Mike Rausch thank you very much. My pleasure Bill. Appreciate it Bill. You bet. Good seeing you. Thank you Sir. End of Interview We would appreciate hearing your ideas, suggestions or comments... Brian Mundy Photomation McCurry Associates Anaheim, California Princeton, New Jersey (877) McCurry (877)