StJohn Group is a North American distribution company with global flair. StJohns four brandsARTCOUSTIC, CinePanel, Matthews Studio Equipment and Screen Researchare international dcor-first lines with natural synergy and high style. Residential Systems managing editor Margot Douaihy asked StJohn Groups founders Kevin Leja and John Caldwell why their approach differs from most custom distributors.
Margot Douaihy: How is the StJohn Group different from other distributors in the residential channel?
John Caldwell: In four key ways:
1) We are the marketing company for these brands. We are closer to the market, and we get the message right. We also give our dealers the marketing tools they need to message to the design industry; customized marketing materials, graphic production, training and consultative system and product design support are just a few of the ways we support the dealer.
2) We offer products exclusively to this channel. You cant find them in fast-floor retail or online stores.
3) The products can be highly customized and are not off-the-shelf items.
4) Our marketing goes beyond marketing to the dealer or end user. We also go upstream and actively message to the design community (interior designers and residential architects) and show them how to become specifiers of our products in partnership with our dealers. By extending the CI dealers sales force in this way, StJohn Group is looked at as a trusted business partner rather than a middleman or typical distributor.
Does your distinct nature, including your role as marketer, create difficulty for you, or does it work to your favor?
Kevin Leja: Our experience has shown us that most distributors who attempt to serve the custom channel suffer from two major problems. First, they arent marketers. The marketing, if its done at all, is done sparingly from on high. Many times it misses the mark with the custom dealer or their high-end clients. Second, most custom distributors are merely sales, warehousing and cataloging operations.
What they sell, catalog and warehouse arent custom products. What we really mean by that is that they are selling brands that have essentially topped out within their existing direct distribution system and are looking to wring out the last percentile or two of growth within the custom channel. Either that or they are selling products that cant be customized by the dealer to the high-end clients specifications.
Are you viewed as a manufacturer or a distributor?
Kevin Leja: Our dealers more readily view StJohn as a manufacturer than a distributor because were proactive and operate like we are the company, not a middleman. They like the communication, response time and follow-up. Our dealers find our approach refreshing and much more structured like their businesscustom and consultative. Our dealers also seem to like the synergy of the product lines we carry. They like how we have speakers that nicely fit behind our acoustically transparent projection screens, for example. Many dealers, in fact, are curious to know what our next dcor-first brand will be.
Value-added is in vogue now, but what does it really mean for dealers?
John Caldwell: Giving value and adding value are words that many distributors have a difficult time in understanding. Most think that value is all about something that the company adds. Some small additional service like training, something tacked onto the product like a warranty, a slight reduction in price, even something free. These things are promotionsnot values. Value is something done for the customer, in favor of the customer. It is most effective to give value first. And give it without expectation and give it often.
We give our value every day by designing ads, logos, literature, websites, posters and postcard campaigns for our dealers. We offer in-depth consultation on aesthetic design as well as system design and provide things like published tips for dealers and clients to use with their designers.
Kevin Leja: Frankly, we dont see many common distributors adding much value at all. When StJohn Group thinks and acts like the factory, then there is no disconnect.
From your perspective, what do you think is the biggest challenge facing custom systems dealers today?
Kevin Leja: Custom dealers have lots of challengesindustry consolidation, integration and IT, time and project management demands, creating customer demand not to mention a growing number of vendors vying for a piece of their business. Too often dealers shut downstop investigating whats newand often find their clients knowing more about what technology they want than they do.
But the biggest challenge for dealers is still really connecting with the customer on their level. Too many dealers fall into the trap of trying to sell products instead of trying to satisfy clients entire need sets first. Most dealers wont properly qualify the customer to determine what they really need and often sell them something they wont use or undersell them altogether, leaving money on the table. Many dealers also still think that they are on a mission to save the world from bad sound. While noble in intent, the client cares more about getting the design right first, then the sound.
What is StJohn Group doing to help?
John Caldwell: We offer high technology products you can live with. And, we emphasize live with. Most people simply will not tolerate two huge six-sided boxes in their living room, let alone five or seven of them. Every day we talk to guys who buy the latest uber-tower speaker, only to call us and tell us that their wife wont let them keep it in the house. What does that tell you? They want technology to be unobtrusive. Our entire concept is to make it easier for our dealers to use products that fit, blend and even disappear into the environments of their customers.
How do dealers respond to the notion of Designed Environment? Is it abstract to them?
Kevin Leja: For the ones who want to learn how to grow their business and also learn how the market segment we are addressing is different and potentially lucrative than what they know, they get it right away. But it is not the typical large old-school A/V retailer that usually sees this. They have their established lines and are likely locked into several programs and worry about making quotas with their vendors, so they have little or no incentive to look at new ideas and products.
John Caldwell: With a few exceptions, most of our dealers are relatively new to the business, eager, impressionable and welcome innovation and advice. Many come out of the design field or networking…and many of our most successful dealers are women. We are encouraged by some established dealers recently getting into design as customers and their designers and architects demand it. When dealers see that a well-designed product can also deliver higher performance than what they have been used to selling, they find that system design can actually be fun again!
Margot Douaihy is managing editor of Residential Systems in New York.
