Back in May, Lenbrook America created a stir among independent reps when it announced that it would begin selling most of its NAD and PSB home audio brands through in-house regional sales managers for the first time after having sold exclusively through independent reps since the company's founding 20 years ago. This move, which took effect on June 1, was made under the leadership of Dean Miller, who earlier in the year had been appointed president and CEO of the U.S.-based subsidiary of Canada's Lenbrook Group. The dust having settled on that decision, RS wanted to check in with Miller and find out more about the switch and learn about the industry veteran’s leadership vision for Lenbrook’s brands.
Dean Miller, Lenbrook America president and CEO
In the few months since you have been on board, Lenbrook has made some big changes in the U.S. market. Can you describe the changes you made and the thinking behind them? Specifically, what was the primary motivation behind the decision to go factory direct?
We did indeed decide to transition our field force from independent reps to a hybrid model whereby we still have two independent rep companies, along with three (soon to be four) regional sales managers. The reasons for doing so were largely three-fold. First, as we all know, the entire consumer electronics industry has undergone a dramatic change insofar as the products that are sold and the distribution that sells them. What we have in the States now consists of one national powerhouse retailer (Best Buy) and roughly 3,000 small independents dealers focusing on whole-house automation. Secondly, in our effort to raise the quality of our distribution, we have significantly reduced the number of accounts selling NAD and PSB products. Finally, we have a very sophisticated and somewhat technical product platform and brand strategy that we believe can be better communicated by this new field force structure.
How will the new Lenbook America operate? Will you maintain a U.S. office, and what functions Lenbrook in Ontario perform?
Our parent company, Lenbrook International, is based in Pickering, Ontario, which is located about 20 miles east of Toronto. There we employ approximately 110 people engaged in a variety of traditional company functions to support our 80 distributors around the world. Lenbrook has subsidiary companies in Canada, the U.S., and in Singapore, which are responsible for sales and marketing activities in those countries. Our U.S. headquarters is located in Sharon, MA, just south of Boston. Our eastern regional sales manager, Jim Price, works out of this office along with a small team engaged in administrative activities. Our western regional sales manager, Bart Greenberg, along with our central regional sales manager, Dave Cusick, work out of their homes located in Huntington Beach, CA and Mt. Prospect, IL, respectively. Our “back office” functionality, consisting of order entry, technical support, customer support, service, and accounting, is handled by a dedicated team of a dozen people who are based in Pickering. Actually, it is surprising just how transparent these multiple locations have become and, fortunately, it all works quite smoothly.
How is Lenbrook addressing the changing market, specifically in regards to specialty retailers and custom integrators?
Hopefully, by providing high-performance products that are differentiated and relevant to what they need to be successful. The majority of our electronic product platform is designed around a technology called MDC (modular design construction), which is a software-upgradeable approach allowing for incorporation of new/future technologies and thereby minimizing product obsolescence. Between now and September, we will be introducing 16 new products to the market. Making our product “installation friendly” is an ongoing process and platform ingrained into our product development team. Part of this new product introduction will include further expansion of our line of architectural speakers. A major initiative within the company will be to introduce products that are suited toward the burgeoning “computer audio” market, incorporating such things as asynchronous DACs and music storage devices–all having the requisite USB and FireWire connectivity.
With the new housing market in a protracted slump, is Lenbrook addressing retrofit and no new wires solutions?
The great majority of our products are already geared toward the retrofit market. Regarding wireless solutions, we will have more and more products that have wireless connectivity. In most cases, we are pursuing Bluetooth technology, as it has a wider appeal to various products instead of limiting connectivity to a particular brand.
What do you see as the biggest challenges in marketing traditional AV products to an increasingly “i-centric” customer base?
This enormous shift to the iPod world that has taken place in the past 10 years has clearly demonstrated that people, by far, favor convenience over quality. However, up until recently, there has not been much understanding of the requirements necessary to create a “high-quality” download, nor has there been much availability of high-quality content. We will be working with our specialty dealer network to introduce more and more products that are “i-based,” but offer high-quality, dare I say “audiophile” performance. This will be a major focus in our product direction for the foreseeable future.
What should Lenbrook dealers look forward to seeing at CEDIA EXPO this fall?
As mentioned earlier, we will have 16 new products coming out this summer. We will showcase these new offerings at CEDIA and also are planning to conduct local regional product introductions for our dealers throughout August and September. We have a really tremendous and exciting product platform and strategy, which will position Lenbrook (the NAD and PSB brands) as an industry leader in the “digital revolution,” which is being referred to as computer audio. This isn’t your father’s NAD receiver anymore!