As a follow-up to my “Guitar Center bought by Mitt Romney’s Company: No More Haggling Allowed“ I recently received a good comment from a Guitar Center employee. It provoked me to delve further into the whole Guitar Center issue. I was going to email this person, but I felt the comments were valuable, and merited posting in the main blog, including my wordy responses.
—–…yes….the prospect of the commission thing going away is quite probable. However, employees are and still will be REQUIRED to pass certifications on their knowledge. Also, despite not being a commission based job, you are still required to hit your goal (sales figures based on your skill/lenth of job/job title….all business’s have a daily goal people…not a huge industry secret). So, if you think that average ‘Joe Blow’ can just waltz in and get a job, think again.
How long will that last? I wanted to get a job at Guitar Center because I was pretty sure that I knew more about guitar stuff than most of the people on the floor, and therefore I felt I would do a good job informing people and selling guitars, earning a good commission by developing a dialogue with them. Incentive being that I could take the price down and get them coming back. Without commission, it wouldn’t matter at all if the person knew anything about guitars, a wage job is a wage job.
It’s like most big name stores without commission; salespeople don’t go around asking people if they want anything, they just sit at the register waiting to check someone out. There’s no incentive or reason for them to ask, so they just sit around waiting. Deals and commission were all about incentive. Incentive to work at Guitar Center, incentive to sell, incentive to buy, incentive to get a deal.
Now Guitar Center can’t have the whole friendly vibe, or at least there’s no point to it. I went in to the store that day looking for the guy I knew, and he knew me. He would give me good deals on things and I wouldn’t waste his time with other people, i’d ask for what I wanted and pay. Instead, if I go I can just buy whatever from whoever and know i’m paying full price, and the salespeople no longer matter. People with knowledge won’t matter, they’ll just show it on the computer if someone asks for information.
—–People can whine all they want about having to finally pay what the instrument is worth. If you want to go to a mom and pop shop, that is your business and your right. GC is simply trying to get away from that archaic way of doing business. Car dealerships have been doing away with it as well. There are many flaws in the “haggle” way of selling. Look at it from a different perspective…..Let’s say you own a business, and you have to pay rent, utilities, insurance (public, employment, property), overhead (cost of goods and the cost to maintain those goods) and so forth…..and then you get Johnny McDouchebag coming into your store…. occupies 3 hours of your time, and then when it gets down to the sale, he grinds the hell out of you until you are 5-10% above cost. That 5-10% will not cover your overall costs of selling that piece. You actually lose money. Do you honestly think that is fair? Is it fair to the business? Without income, the business cannot grow. Is it fair to the employee who is trying to earn a living? If someone feels the need to grind me on a price, I feel like that person doesn’t care about my time, my livelihood or my knowledge and it’s disrespectful.
That was the thing, it was the only reason I went to Guitar Center. By creating a haggling atmosphere, it was an entirely different entity and it was the reason I didn’t go to mom and pops. If I have the option now of paying full price at Guitar Center or at a small store, i’m going to the small store. I feel my money is going to better use, i’ve had a better experience, and i’m making sure they’ll be there by supporting their livelihood. Before this new price set thing was in action, I would care if Guitar Center left. Now not so much. Unlike technology stores and emporium stores, there’s still a grassroots guitar store movement out there, and if Guitar Center is just another one of the options, i’ll let them go.
I was willing to buy more things overall because I knew I would get good prices on things I wanted, and by talking to people for hours who gave me a deal, i’d always come back and give them my business. Unlike a Car Dealership, you don’t just go to Guitar Center once. Most people have more than one guitar, amp, pedal, and accessories. If I know your name, and I know you treat me well and give me good prices, i’ll just keep talking to you and probably buy things I don’t need, but get them just because it’s a good price. Same reason I went in there in the first place. Obviously this doesn’t apply to everyone. Tourists, beginners, rich people with money to burn.
—–Obviously, I work at GC. I spend an enormous amount of my time learning all I can to insure that the information I give to someone is correct. I’m not very high up in the ranks (just an AM), but I do believe in the direction the company is taking. It will take some time to get all the bugs worked out, but believe me…I know what’s up the road and it looks good. Try not to be so negative people. GC is trying to make a change for the better. Yeah, sure, you may have to pay the tagged price now….so what? Do you haggle your groceries? Best Buy? Anywhere else? This is a business, and it has to be run as such. Why else do you think the company was in trouble before Bain bought it? We were giving away too much stuff below the price to cover our overall costs. I’ve seen the IBITA (your overall costs vs. profits…..that is if I spelled it right) reports, and it was UGLY. Cost was not outweighing our income. Hopefully, a few open minds out there will see where I was coming from with this and perhaps see reasoning. -Z-
Guitars are a store driven market, and Guitar Center was the only big chain out there. I feel no loyalty to a Best Buy or a grocery store because those are things I need. More people need and buy cell phones, cameras, TVs, computers, and food than they ever buy guitars. It’s why Panasonic, Sony, Samsung, Toshiba, SHARP, and so forth are household names and brands, while i’d give a guess and say that if you asked someone to name a guitar company, you’d be lucky with a “Fender”, “Martin” or “Gibson.”
They don’t offer haggling because they don’t have to. Guitar Center is purely luxury items for a specific market, and in order to captivate an outside, seemingly uninterested market, there needs to be some (back to square one) incentive that will cross the mental barrier of them wanting to spend money. Guitar Center is all over America, but the consistency was that we could get good deals at all of the stores if there were good people there. And the salespeople were unique instead of just a clan of blue-wearing khaki pants robots. As I said, people wanted to work there, and Guitar Center knew it. It has/had an extremely high employee turnover rate because GC knew if someone wasn’t performing, they could get another worker in quick.
So here’s an open question to employees and readers alike:
What sets Guitar Center above anyone else now?
Give your comments and thoughts.