03.20.2008 — American Home Cinemas (AHC) is truly a unique business model.

Today, many integrators are retreating to commercial and industrial parks. This daring integrator, however, has decided to plunk his showroom, or "experience center" amidst a "high-traffic mall."

It seems to be working. The approach recognizes and captures potential new clients with an extremely strong first impression.

The company was founded and is operated by Chad Clifford and his management team. AHC focuses on working with high-quality builders and architects in the greater Birmingham, Ala. area.

Here, Clifford shares some of his showroom insights.

What factors caused you to consider investing in this showroom approach? We really wanted to expand our business and, with all the opportunity in the retrofit market, we felt this location would be a perfect way to grow the number of our $10,000 to $15,000 projects.

With all the opportunity we see in the markets we serve, we had the idea that if we create a truly special experience in a major shopping mall, we would impress a much broader market segment with our skills and products.



What was the most difficult decision in going ahead with this project? It really was not that difficult once we decided to do it.

Once we found a good space in the right mall, we moved as quickly as we could.

How did the staff respond to the project? The staff was extremely excited about our concept and the plan.

We brought them into the process where it was appropriate and brought in other specialists where we believed their experience was appropriate.

How did the staff respond to the showroom project after it was completed? Every one of our staff members worked really hard in bringing this to completion.

They are very pleased with the response from customers.

How did you finance it? We budgeted for it and were able to fund it out of cash flow. We consider the investment to be a big part of our advertising budget.

Why did you hire a specialist in the A/V industry to help with design? We had the concept, but we did what we preach to our customers -- we hired experts.

I was at a national meeting in Las Vegas and heard Spencer Kalker of ImageCrafters present on the importance of merchandising and store design.

I knew ImageCrafters had the experience required and we knew if this was going to work, we needed the best team we could find. Immediately after the meeting, I went up to Spencer and asked when he could fly down.

That was Monday. Our first design meeting was in Birmingham that Friday.

How long did it take? We planned to do the impossible and complete the build-out in four weeks.

However, due to the time of the year, some contractor issues and permit issues, it took three months with full-time construction crews and a lot of management support.

How much did it cost? More than we budgeted by a factor of three, mostly due to permit delays that caused a tremendous amount of overtime.

What did you expect to happen? We wanted to take advantage of what we see as the untapped mid-priced retrofit market.

We believe this investment will help us expand into more repeatable home theater and home automation systems. We also hoped it would help establish American Home Cinema as the leader in the market and an innovator with our suppliers.

What might you have done differently? We would have budgeted for more time to complete construction of the store and hired independent project management when our original contractor went out of business during the process.

Has it met your expectations? In sales it has, but not the way we planned. It has actually increased our per project sale.

It has not, to date, increased the volume of our middle price points, but the showroom has measurably increased our projects scale.

It has made all our suppliers take notice and given us additional credibility. The quality of the presentation has established a new standard in the market and become our major marketing tool.

What does American Home Cinemas need to do now to maximize its investment? We need to get our skilled outside sales people out of the store again, calling on our builders and architects.

We need to staff the store with appropriately trained demonstrators that can present the concepts with a level of excitement, without getting too deep into the technology.

The next step would be to set up an appointment to meet with an experienced system designer.

If you could go back, knowing what you know now, would you create this space again? It was a lot like having triplets -- really painful during birth, a serious commitment to providing everything required to sustain them and a huge investment in effort.

But like anything worthwhile, absolutely. Yes, but ask me that again in a year.