Case study: Delivering on service

In the second in our series of SME leadership case studies, Think Business looks at Singapore electrical retailer Atlas Sound & Vision, and its strategy for success through building a premium service experience.

Over two generations Singapore-based Atlas Sound & Vision has evolved from a small family-run record library to a regional leader in premium audio visual retail and distribution. Today the company employs over 100 staff in Singapore, Malaysia and Australia and prides itself on meeting and exceeding its customers’ needs.

“One of the big things we learned from the beginning was to be different,” says Atlas CEO Michael Tien, who took over as chief executive in 2003 following the death of his father. Exceling in customer service and engagement, he says, is at the centre of Atlas’ business strategy.

“By being different we were able to offer a different proposition to our customers suiting their needs.”

IN VIDEO
Michael Tien, CEO of Atlas Sound & Vision, speaks to NUS Business School
Pt 1: On Strategy
Pt 2: Challenges
Pt 3: Marketing and branding
Pt 4: Leadership
Pt 5: Vision for growth

It’s a strategy that has served Atlas well, carving itself a prominent position at the premium end of the market and competing with much bigger multinational retail chains such as Best Denki, Courts and Harvey Norman.

The Atlas difference, Tien says, centres on getting to know its customers, understanding their needs and matching them to the best available product package.

One of the most common shoppers’ complaints is a frequent lack of product knowledge among retail staff – something Tien says that differentiates Atlas from competitors. Atlas’ customer-centric service delivers a packaged solution to the customer, instead of simply selling equipment as a commodity.

Rather than leaving prospective customers to find out for themselves about different equipment, Atlas staff take time to demonstrate products and their different capabilities. Combining this with expert knowledge of the market and the latest technologies, Atlas can then tailor systems according to individual customer wants.

“We wow the customer, and after we wow the customer, we do what we call a needs assessment to understand the customer’s needs. We present a personalised solution to the customer,” Tien says.

“It all begins with understanding the area that you are in and the type of business you are in. We recognised that if we didn’t change, we’d be irrelevant. We observed that a number of the older, more established SMEs in our industry were falling along the way because of the big boys coming into the market.”

It’s not been an easy journey, Tien says. But it has yielded results: in FY2011, Atlas reported record turnover of S$26million.

Building passion

A challenge that many retailers – especially SMEs – face is to build a passionate sales and service staff who are dedicated to consistent customer service excellence and the need to continuously engage and impress the customer.

Unlike other retailers, Tien says, Atlas does not try not to hire people from other companies in the business. Instead the firm prefers to take relative newcomers, who have demonstrated an interest in the business, and puts them to work in a team.

“I think one of the biggest assets that we have as an SME is our people. It is because of our ability to spot the right people and fit them into the role they have to play,” says Tien.

He says Atlas pays careful attention during the recruitment process to see that new staff match the firm’s service its ethos and vision. All new staff then go through a one-week orientation course where the vision, mission and values are explained to them, before beginning an on-the-job training programme that lasts from three to nine months.

To attract and retain talented staff, Atlas also places a strong emphasis on training and development – both formal and informal. After three years employment all staff are offered the company’s ASK programme – short for Abilities, Skills and Knowledge – which maps out a career development path for employees. As a result, some employees are sent for diploma courses, degree programmes and five top management people have so far completed an MBA.

In the competitive retail market, this approach to talent development has helped Atlas become an expert in retail, maintaining its profit margin and keeping costs in check while building the high level of customer experience that is so central to the Atlas brand. That added value has enabled Atlas to build sales despite prices for top end Bose products, for example, about 15 per cent higher than in the US.

“Because of the service that we offer, the pre-engagement, the pre-sale, the post-sale, we believe we created new value that the customers can experience,” Tien says.

Top performer

customer280Being a retailer of prominent brands like Bose and Loewe, one of the challenges Atlas faces is to keep those brands for the long run in the face of a growing trend for manufacturers opening their own branded stores. However, in the case of both Bose and Loewe, Atlas’ emphasis on building good relationships has made it consistently the brands’ top performer in the Asia-Pacific region.

Singapore has a relatively small market of just five million people. But on a per capita basis, Atlas’ sales of Bose and Loewe equipment rank among the highest in the world. So for both brands there would likely be a significant cost for switching to having their own stores in Singapore.

Looking to growth opportunities Atlas has ventured into overseas operations, setting up in Australia, Brunei and neighbouring Malaysia, where the business has seen year on year growth of 20 per cent.

As Atlas expands, Tien says, the focus remains on hitting the same touch points with customers developed in Singapore. To spread the Atlas experience beyond company stores, Atlas has produced audio visual demonstration kits that keep the customers informed without the need of salesmen.

Meanwhile Atlas has also looked at broadening its business in Singapore, applying its core competencies to new businesses areas. One venture in particular is its projects division, Sovis, targeting upmarket homes as well as the hospitality industry selling its audio visual products and services to hotels.

“The competitive advantage that they have is the way we sell, how we sell and how we treat our customers. All this has been made available to Sovis as well. And from there we can expand,” Tien says.

This is the second in a series of SME case studies produced by NUS Business School in collaboration with SPRING Singapore.

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