Growth Through Defying the Odds (2014 Summer NAMM)
Tracy Leenman opened her school music dealership, Musical Innovations, in 2009—at the height of the recession. Since then, her business has grown by leaps and bounds. During the NAMM Retail Summit at 2014 Summer NAMM, she revealed her roadmap to NAMM President and CEO Joe Lamond.
According to Leenman, Musical Innovations rented 135 instruments in its first year. Last year, the company rented approximately 1,000. "Our rentals were up 15 percent last year," she said. "Our overall gross sales were up about 10 or 11 percent."
More highlights from the video:
On establishing her business:
"Ninety percent of our business the first two years was on the road," Leenman said. "It took about four years for that to get into balance, where it was almost half and half.
"We do a lot of guerrilla marketing. The first year, we did a lot of 'tell a friend.' If you rent an instrument from us and your friend comes in and says, 'I'm going to come in and rent because Mr. Lamond told me about you,' then Mr. Lamond gets a free month. And so then all our customers were our advertisement.
"We did a lot of free-month coupons the first year, where we said, 'If you rent from us, we'll give you a month free.' And a friend of mine said, 'You're throwing away all that money,' and I said, 'No, I'm not. Because if you look at the lifetime value of those customers and the total value of rental contracts, we're good.'"
On staying small:
"Our store's not much bigger than this stage—it’s 1,300 square feet,” she said. "It's actually a huge advantage because it means I have to be very careful [with] what we buy. We have to keep things moving, turning. It means that we can't grow too fast.
"It's also built our relationships with the manufacturers because we have to say to them, 'We can't display 75 trumpets. We can't display 13 trombones. We don't have room. So you work with us. We'll promote your stuff. You've got to help us do it in a way that suits us.'”
On generating sales:
“You hear this old adage that you shouldn't sell to people—you should help them to buy. We do a lot of that. Say you're looking for a step-up flute. We would put out six or eight flutes and show you all of them and tell you about the difference between them and let you play them. We would never hand you just one flute.”