Musician’s Friend Hits a High Note

Cataloger Musician’s Friend and retailer Guitar Center have been making beautiful music together for nearly two years now.

Since being acquired by Guitar Center in May 1999, sales at Medford, OR-based Musician’s Friend have soared. For 2000, the music equipment mailer posted revenue of $133 million, up 32% from 1999. The Web accounted for $45 million of those sales. During the same period, Agoura Hills, CA-based Guitar Center’s total net sales rose 27%, to $785.7 million, and its net income climbed 16%, to $22.5 million.

“Guitar Center had no experience in the direct space, and it realized it needed to be a multichannel business,” says Musician’s Friend founder/CEO Robert Eastman. Both Musician’s Friend and Guitar Center sell guitars, drums, basses, keyboards, and sound and lighting equipment, but the cataloger offers more specialized or hard-to-find items, such as left-handed guitars.

Prior to the acquisition, Musician’s Friend also had nine stores, which drained its cash reserves, Eastman says. The stores have since been folded into the parent company’s 83-store retail chain. Ceding control of the stores, along with an infusion of capital from Guitar Center, has freed Musician’s Friend to focus on its catalog and Website.

Tweak, tweak

One of the first things Musician’s Friend did following the acquisition was tweak its catalog creative so as to feature more products per page without cluttering the layouts. “We’ve picked up about 10%-20% more density of product,” Eastman says. “The layouts are much more compelling, with a better use of space.”

The cataloger also tweaked its circulation plan. “We spent more time analyzing who the catalog goes to,” Eastman says. “We did heavy prospecting in 1999, and during the past 12 months we pared down those mailings to see who in fact were our buyers.” Nonetheless, Musician’s Friend increased circulation 3% in 2000, to 11.5 million catalogs mailed, from 11.3 million in 1999.

And in March, Musician’s Friend launched its first spin off. After seeing a surge in sales of drum products during the past year, it spun off a 68-page book titled Musician’s Friend Drummer. The cataloger mailed 400,000 copies, of which 100,000 went to buyers of drum supplies and equipment from its core catalog. The remaining 75% of the mailing went to prospects.

Although focusing on its catalog, the company hasn’t ignored its five-year-old Website. Shortly after it was acquired, Musician’s Friend bought collaborative filtering software from supplier Net Perceptions. “It was something we wanted to do, but never had the money,” Eastman says.

The software examines Musician’s Friend’s purchases and looks for relationships or patterns among them. Say it finds that customers who buy drum pedals from manufacturer Pearl are also likely to purchase drum kit cymbals from manufacturer Sabian. The next time a customer buys Pearl drum pedals, a pop-up window may also suggest that he take a look at Sabian cymbals as well.

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