Australia’s Len Wallis Audio Takes Home CEDIA’s Top Dealer Honor CEDIA’s increased international presence was never more apparent than on the night of September 8, in Indianapolis, when the award for the industry’s Dealer of the Year was announced. That night when the words, “The Dealer of Year award goes to… from Australia, Len Wallis Audio!” gasps of surprise and appreciative applause were heard. In one fell swoop, it seemed, CEDIA truly became a worldwide organization.
Len Wallis’ surprising introduction to the industry offered living proof that there’s much more to the custom installation industry than meets the eye. And upon further inspection, it’s intriguing to learn how much a company located literally on the other side of the world, truly resembles many of the veteran custom A/V installation companies in the U.S.
Len Wallis Audio was formed in May 1978, as a hi-fi retail store, well before the custom installation industry was a reality in the U.S., let alone Australia. One of the company’s main selling features was that they would deliver and install everything that it sold, free of charge.
“When we first started out we were simply distributing audio through the house, using some locally developed technology,” explained Len Wallis, who serves as president of the company. “We gradually moved into different technologies as they evolved. It was not a huge leap from there into what we do now.”
Len Wallis Audio was one of the first companies in Australia to recognize the potential of this new market, forming a separate division of the company, in those days called ‘Living Media’ (a name that it has since dropped) in 1985.
Currently boasting 32 employees, including retail manager, Trevor Rooney, custom manager, David Vale and manager of audio marketing (the company’s import arm), Nigel Macara, the company has grown at deliberately steady rate over its 22 years and is still experiencing consistent growth at its Lane Cove location.
By Wallis’ description, Australian designer/installer companies face many of the same challenges as their U.S. counterparts. Among them, Wallis says, are a difficulty finding qualified staff, finding the time to keep up with sales growth and constant technology developments, and the struggle by dealers to create a greater awareness and a desire for their product in the marketplace. On the staffing issue, Wallis contends that he has found it to be essential to pay “good money for good staff.”
“Once you have these staff, treat them in such a manner that they will not leave,” he continued. “In Australia, staff turnover is a little over 20 percent per annum. We have lost one staff member in the last 18 months, and that was to have a baby. She now works part time for us on special projects.”
Like many U.S. dealers, Len Wallis Audio also depends on its cooperative relationships with its vendors. “We have always worked on having very special relationships with our main suppliers, and it has paid huge dividends,” Wallis explained. “Suppliers are a huge source of recommendation–they are also someone who should be there when we need them–and someone who can supply stock to you without the fear of being dudded.”
Wallis also places the same emphasis on customer relations as many designer/installers in the U.S. “I realize that this sounds obvious, but we have always worked to create a reputation for creditability,” he explained. “We have never taken the cheap way out, we have never carried inferior stock because the margins are good. We offer money-back guarantees if the product is not suitable (or even if the customer imagines it is not suitable). We even offer a differential refund if any product is reduced in price within three months of the sale–although I must admit that this one is hurting with the way that plasma prices keep falling. While at times this may take its toll financially, it has worked very well for us in the long run.”
Currently, 57 percent of every capital sale made by Len Wallis Audio (and 52 percent of the company’s cash flow) comes from customers who have previously purchased from them within the last six years. This percentage, Wallis contends, is the result of the great effort his company takes to stay in close contact with its customers.
“Every customer receives a ‘thank you’ letter after their initial purchase, and we have always produced a newsletter to keep them informed of new developments,” he said. “We [mail] 22,000 copies of this newsletter three times a year.”
Overall, the Australian custom installation market also possesses many similarities to that of the U.S. Wallis maintains that, while the size of projects and the market is generally much smaller in “Oz,” the multi-room and automation installations that are being carried out are very similar to those in the U.S.
“In his class at CEDIA, Randy Stearns [president of Engineered Environments, Oakland, California] mentioned that his company was doing jobs in the $2-3 million bracket; there is no one here doing work like this. (This is market-related; for instance we only have a few billionaires in Australia). Our small population also limits the potential; despite the size of the country, we have a population base of around 20 million people.” Quite unlike in the U.S., a lack of homegrown A/V manufacturers makes pricing more of an issue for Wallis and his Australian peers.
“Australia has a very small manufacturing base, and the majority of what we use in this industry is imported, with most custom products coming out of the U.S. With our dollar valued at US$0.50, plus freight, duties etc., our sell price is usually around 2.5 times the U.S.
Australia, as a country, also has a lower average income than the U.S. That, Wallis added, means that his customers are getting somewhat less for their money than they would in the U.S. Wallis pointed out that Australia’s construction methods, and therefore its installation methods are different, as well. “Ninety-nine percent of the homes we work on are brick, in many cases including internal walls,” he said. “Concrete floors (including the second level) are also common. One of the differences is that we use a far greater proportion of round speakers (in-ceiling) than U.S. designer/installers.”
While he acknowledged the presence of dedicated home theaters in his market, Wallis also noted that Australian designers haven’t reached the same level of craftsmanship and design as their U.S. counterparts. “It is not uncommon to install a dedicated theater here, but no one is approaching the work of Theo Kalomirakis or Russ Herschelmann,” he said. “This will happen, but it is probably 2-3 years down the track.”
Even in Australia, the A/V industry varies greatly from company to company. Just like in the U.S., there are firms that maintain low overhead by subcontracting out all of their installation work, while many others run their custom division from within a retail storefront. Len Wallis Audio maintains the latter approach. While Wallis says his retail sales staff has a good working knowledge of the industry and is competent in designing systems, the company also maintains a dedicated division that does nothing else but custom. This division consists of sales staff, program staff and installation staff.
“We have found that this has given us a tremendous amount of control over the work that we do,” Wallis explained. As his company has evolved over the years, Wallis says he has gradually learned to let go of control, empowering his managers more and more. However, there are still some areas of the company he can’t relinquish.
“Some of the divisions, in particular our import arm–Audio Marketing–is running itself with only a few hours a week from me,” he explained. “We have not been able to achieve the same level of independence from retail, because of its dynamic nature, and custom, due to the incredible growth in sales and awareness, plus speed of development. This is an area that I am working very hard on at the moment.” While he says that he is first and foremost not financially driven, Wallis is, however, quite competitive and would like to create a company of world standing in terms of management, expertise and recognition.
“Most of my professional goals have revolved around creating this type of organization, and I will be the first to admit that we still have a good way to go,” he said. “We do work to a business plan, which always seems to be out of date. I personally feel it is not a bad thing, as long as it gets re-evaluated.”
On that very point, Wallis noted that his “proudest moment so far” has been picking up the CEDIA award for Dealer of the Year. Previously, the company’s highest honor was being listed by the now defunct High Fidelity magazine in the U.K., as being one of the five best hi-fi stores in the world.
While he’s hardly a member of the CEDIA old guard, it’s appropriate that the award was presented to an active member like Len Wallis. The company is proud to have been a founding member of CEDIA Australasia, with a staff member on the original board. Wallis has personally served four years on the board–two as president. The company continues its strong supporter of the organization, and Wallis himself has taught at the last three local EXPOs.
He credits CEDIA for the success of the Australian branch of the industry. “The custom industry in Australia is very strong, as I know it is in the U.S, and is growing rapidly,” he said. “In my opinion, a great deal of this success could be directly contributed to CEDIA. In fact, I would go as far as to say that the face of this industry would be very different if it was not for CEDIA. It has afforded my company, and many others like us, the forum to learn, network and market. While it is inevitable that some form of custom installation industry would have eventually emerged, it would have never been as strong or as profitable without CEDIA.”
Now that the honor of Dealer of the Year has been bestowed upon his company, Wallis admits to feeling the added weight of living up to the award. “Certainly there is pressure, and yes the insulation of distance does help,” he explained. “Without sounding corny, most of the pressure comes from living up to the award. I am well aware of the standards being set worldwide–including here–and I must admit that its a very high bar. It has been a tremendous catalyst for us to try and be better at what we do.”
–Jeremy Glowacki is editor of Residential Systems.