By Dan Ferrisi
Noted New York Times columnist Thomas Friedman famously observed that the planet is getting “hot, flat and crowded,” the middle descriptor meant to convey our increasingly globalized marketplace and world. The global flavor of commerce is abundantly evident in the music products market, in which one finds several companies that are based overseas but have either U.S. satellite offices or semi-autonomous U.S. divisions. In this month’s Five Minutes With, The Retailer speaks to John Krupa, Director of Sales, RCF USA. Drawing on the attributes of the RCF Group—based in Reggio Emilia, Italy, and boasting a storied history—RCF USA has a real story to tell. Krupa shares it with us, adding his insightful perspective.
The Music & Sound Retailer: To start, let’s touch on your background. Share the highlights of your own story as it pertains to the music and audio products industry. Recount the path that you’ve traveled, bringing us right up to the present and where you are today.
John Krupa: Like many others, I started in this industry as a performing musician and moved into MI retail to help pay the bills. After a few years of working my way up through the retail ranks, I made the transition into the independent manufacturer’s rep world, where I spent 14 very enjoyable years. During that time, I worked for RCF as a representative in the New York Metro area and made enough of a splash to be recruited by RCF to come work for them directly. I’ve been Director of Sales here at RCF USA for the last five years. I guess you could say my career path has been a logical progression. I’ve enjoyed my stops along the way and found each to be a great learning experience. I’m happy to have moved through this industry the way I have, and I feel incredibly content with the position where I currently am. This is where I want to be.
The Retailer: In terms of what you are responsible for day-to-day as part of the RCF Group, what would you say your key contributions and duties are? What is the best part of your job?
Krupa: Every day, I wake up knowing that manufacturing companies must sell what they produce in order to stay in business. I feel a true responsibility to each and every person who works for the company—for, if I fail at my job, we all hit the unemployment line. That’s how I envision my role, and I take that charge very seriously. You’ve heard the expression that “salespeople eat what they kill”? In my world, sales management is responsible for feeding the pack. Also, the word “salesperson” might carry a stigma to some, but definitely not to me. I am proud to be in sales, because I understand sales to be a critical part of a company structure. I love what I do and try to do my job better each day.
Since the day I arrived here, our sales have increased nearly 750 percent. So, I guess what I’m doing is working. I don’t mean to make light of this fact. Believe me, all of RCF USA’s (and my own) victories and successes to date have been very hard won. Personally, I am a devout workaholic who puts in 80-plus hours per week.
To answer your other question, my favorite part of the job is working alongside the great team I have here at RCF, our dealers and our rep force that I can’t speak highly enough about. They’re simply the best in the industry. I’ve known many of them for several decades, and I’m honored to be working alongside them in this role.
The Retailer: Let’s talk about the RCF Group in broad strokes. Give us a 10,000-foot view of the organization, discussing its structure and where RCF USA, Inc., fits in. What are some of the key characteristics and qualities the organization embodies? Share details of the company’s growth and development over its history.
Krupa: The RCF Group today is comprised of several brands and numerous satellite offices around the world. RCF began in 1947 in Reggio Emilia, Italy, as an OEM transducer company. It took almost 50 years before they made their first “finished” pro audio speaker cabinet and, during those years, they evolved into one of the world leaders in loudspeaker transducer design. dB Technologies began in 1976 in Bologna, Italy, primarily as an MI electronics company. The RCF Group was born by combining these companies in 2008 (and going public on the Milan stock exchange), and RCF USA then became the RCF Group’s wholly owned branch in the United States.
What I truly love, being the amateur historian that I am, is that the chronicle of the RCF Group is quite storied and complex. At the center of it, though, the RCF Group remains an engineering-centric company. At first consideration, this might not seem so unique. But, I have been around other great companies that are trying intently to become profit centers above all else. They have lost sight of the belief that it should be about the products first and foremost. RCF truly has a passion for what they do and how they do it. I know it sounds corny, but I can really sense that passion in the products they produce. That’s why I’m here.
The Retailer: When you look at RCF as it currently exists, what makes you proudest to be affiliated with it? What makes the organization stand apart, not only from its competitors but also from all companies in the music and audio products industry?
Krupa: It’s that passion…that real desire to turn out the best quality works of art they can. It’s as if I dream that there’s an accountant at the RCF factory saying, “You spent how much on that thing?!”, and I hear the engineers stoically replying, “We spent exactly what was necessary to make it right.” Actually, I know the R&D people and accountants in Italy quite well, and that fictional conversation never took place because everyone’s on the same page there! Maybe it’s a cultural thing; Ferrari isn’t producing second-rate cars and the Coliseum isn’t just another building. I’m extremely proud of the people who design and build our products, but I’m also proud of the products! I can’t tell you how many times I’ve heard from our customers, “These products should cost more,” and I can’t tell you how good that makes me personally feel. Value. What a concept!
The Retailer: In what ways is the European market different from the North American market? In what ways are the two markets similar? Proportionally speaking, has RCF dedicated energy more toward one global region than another, or is its attention spread evenly across global markets?
Krupa: That’s a great question, Dan. In many instances, the U.S. pro audio market drives the European and other foreign markets. The U.S. entertainment industry is so culturally significant in all corners of the world that it absolutely has an effect on what pro audio products are in use beyond U.S. borders. In other words, if a renowned U.S. artist uses “X” brand, it likely has global implications, whereas the reciprocal is rarely the case. As more U.S. artists tour the world, their tour riders often showcase a large percentage of U.S. brands, which then become the sought-after brands in those other countries. The influence of the U.S. market on other, foreign markets is unsurpassed. Thus, it’s a common belief of numerous European and Asian pro audio companies that, to get maximum penetration into global markets, they must first target the U.S. market.
Such is not necessarily the case with the RCF Group. RCF is currently a relatively unknown commodity in North America, but we’re very popular in many other parts of the globe, the Italian market being our largest. The RCF Group has a far more global, non-U.S.-centric strategy than what you might expect, and it’s working great. The RCF Group is growing tremendously worldwide, not just in the U.S.
While on the topic of European and North American differences, I should mention that there is a nominal, yet (to some) perceptible, difference in the products themselves. European loudspeaker products have a tendency to be more mid-frequency dominant for the purpose of greater articulation, whereas a number of North American products have been branded “boom and sizzle,” with a concentration on more low and high frequencies (a common EQ setting in America for home stereos). Some people prefer the tuning of certain products; some people prefer the tuning of others. Sound is subjective. What someone likes, another might not. Rather than chase one style of tuning or try to adapt oneself to the prevailing tuning in a certain area, I’ve always felt that companies should embrace who they are. Though we’re in a comparatively small market (relative to GDP), there’s enough diversity to allow for many manufacturers to get their share of the marketplace. There will never be one prevailing, definitive sound that’s unanimously accepted. So, companies should manufacture what they believe is the ideal product for the market, and let sales and marketing take over from there. A great analogy from one of my reps compares auto racing to the business world.
If you spend your entire race drafting behind the leader, then the best you’ll ever finish is second. If you run your own race, you give yourself the best chance of winning.
Sorry for the tangents, Dan. To answer your original question regarding the RCF Group’s allocation of resources, it’s pretty evenly apportioned. HQ has always understood that the U.S. market is important to the world market in terms of its earning potential and influence on other markets. That being said, RCF USA is pretty much self-sufficient in our operations.
The Retailer: Shine a light on some of the most recent product releases under the RCF Group umbrella. Going forward, what are you going to be pushing most aggressively? What is coming soon that you might want to preview? Why do these represent important additions to the marketplace?
Krupa: In 2012, we better understand the sales channels for our finished products. Every day, we understand our customers better, as well as what they want from us. It might come as a shock, but we’ve learned that everyone at RCF—from end users to the CEO—appreciates that we haven’t and won’t partake in the “race to zero” that so many of our competitors feel obliged to join. Entry level just isn’t our game. The RCF Group, especially here in America, is focused more on our flagship products…our top-of-the-line products.
We’ve come to see that our active line arrays and active wedges are some of the most widely accepted of our offerings, and our newest products are therefore in those categories. Up to today, RCF USA has directed its resources mostly into the live sound and retail marketplaces. In the near future, look for us to make a push into the contractor world, with new products dedicated to that market. For us, that’s our final uncharted territory to explore.
The Retailer: Articulate the company’s philosophy when it comes to working with dealers and the dealer channel. Would you say that working closely with dealers is a big part of the RCF Group’s approach to business?
Krupa: Without our dealers, we’re nothing. We know that. They are the most important link in our chain. I divide our dealers into two categories. We have “dealers” and we have “partners,” and I do take the distinction between those words literally. We appreciate our dealers very much, but it’s our partners with whom we’re most aligned at this time. Dealers resell our goods; partners resell our brand. We’re at a point in our history where we are seeking out partners. We love “outside-the-box” promotions…anything to help make potential customers aware of who we are and what we stand for. We try to support, in any way we can, those who “do” for us. We must work hand-in-hand with our teammates if we are to become who we intend to be.
The Retailer: Is there anything that the dealer channel could do that would be helpful to you, as a manufacturer? Do you have any suggestions to give the channel, which would help music retailers to sell RCF products even better?
Krupa: My recommendation to the retail market segment on something that would help us jointly would be run your own race. Look sincerely at what you’re doing and make the determination if you’re better off following someone else’s lead or better off charting your own course. In making your decision, you might want to remember that that “someone” I’m referring to might just have more competitive advantages than you have. Manufacturers seeking partners will work with you. They’ll try hard to give you what you need to win your race. They succeed only when you succeed. Partner up with a manufacturer: That’s my advice. We’re in it together.
The Retailer: Economic times have been tough globally for the last several years. Working within a corporate structure that’s based in Italy, you have exposure to far-flung markets across Europe, North America and elsewhere. How has being a global company and brand affected RCF’s ability to weather difficult economic times?
Krupa: I truly thought that the worldwide financial crisis would have had much more of a negative impact on the RCF Group, being that our HQ is geographically near the epicenter of the crisis. As your question alludes to, Dan, it’s been the RCF Group’s overall broad success that has kept us moving forward at a good clip, never even feeling the slightest bump in the road. For example, China has become the RCF Group’s second largest market outside of Italy. The Italian, American and Chinese financial crises have fortunately struck at different times, like a wave going across the globe. Luckily, when one country was being pummeled by the wave, the last country the wave hit was already in a bit of recovery. I’m no economist, but I do believe the wave has left us now and it’s all recovery from here. (Knock on wood.)
Oh, and I don’t want to leave this discussion out of my answer. Though only tangentially affiliated with the global economic crisis, the worldwide neodymium crisis is something I should mention. Due to a greatly increased demand and a contraction in the production of this rare-earth metal, the price on neodymium has skyrocketed (I believe the price has gone up something like 1,200 percent in the last 24 months), which has had a huge impact on the loudspeaker transducer market. This is something we’ve tried to explain to our customers, and I hope they understand the predicament we’re in. RCF is trying to remedy this problem quickly by utilizing other materials and removing neo drivers from a number of our products. This has made for a challenging time for us. But, our factory is incredibly dynamic and has done an excellent job in adapting to these circumstances.
The Retailer: What does the future hold for RCF? What can people who follow the company expect to see?
Krupa: One-word answer: Growth.
The Retailer: What are your closing thoughts?
Krupa: Dan, I just wanted to thank you for this opportunity and, again, to express my immense appreciation to everyone who has helped RCF USA get to the point we’re at now. We still have a long way to go before we even come close to reaching our potential here in this great country. But, with the team of partners, dealers, reps and internal staff we have assembled, it’s really only a matter of time.