Fast Lane: Ryan J. Kugler

Because

Ryan Kugler sought new outlets online, Distribution Video & Audio Inc. stayed cutting-edge during the recession. He didn't know the Internet would also boost his customer service.

DVA, which purchases CD and DVD inventory excess from studios and labels to resell, moved online by selling to other Internet resellers. By finding new ways to expand and attend to his customer base, Kugler - president and co-owner with his brother Brad, who also serves as CEO - has grown DVA to 35 employees, selling 20 million units per year to 350 accounts with 24,000 storefronts, which totaled $24 million in business last year.

Kugler spoke with Smart Business about finding and keeping customers online.

Q . How has technology changed your business?

It has changed the way that we do business because when you're dealing on the Internet, you're dealing with people who are not multimillion-dollar companies like Target or Big Lots. You're dealing with a whole different species of an animal - someone who might complain more, to be honest with you. You need to have a little bit more customer service when you're dealing with Internet resellers.

No. 1 rule [of customer service is] get back to every single person that reaches out to us ... within 24 hours. Even if we don't have an answer to their question, say, 'We are researching it. We will get you the answer, give us a minute.'

On Amazon, if you don't get back to (customers), you get a bad rating. Technology has helped us (stay in touch) because we want to keep a good rating with Amazon; otherwise, you're kicked off.

Q . How do you handle your marketing?

The biggest challenge ... is finding new customers. We are always marketing. We buy mailing lists. We send out letters. We send out postcards. We send out e-mails. We place ads in trade magazines.

If you cut your marketing, you're not going to get new customers. Now, you can cut marketing (by keeping it) to the same amount of people at a lower price. Instead of sending out a letter with an envelope - which, with a first-class stamp, might cost you 60 cents - you can go to a postcard, which will cost you 32 cents. You're still mailing to the customer, and that's the whole point. Never cut the outflow.

My advice is: Do not cut marketing. Find another area to cut. Cut your water usage. Cut your coffee usage. You need new customers because that's what's going to sustain you during a rough economic period. There's little things you can cut (instead of) marketing.

Q . Is the customer always right?

It doesn't matter if it's true. If the customer says this, we just try to work it with that. We want to close the sale. If it doesn't work financially or if it's going to put us out of business, then we just say, 'Sorry, can't do it.'

We will do anything the customer wants as long as it's legal. If a customer wants a banana taped to each DVD, I'll say, 'Sure, we can do it, but here's the price.' I'll apply to the Food and Drug Administration to attach something perishable to a DVD. It's just going to cost the customer money, and we always tell them that. That's why I'm still here doing business, because we'll do whatever the customer wants.

Q. Is there a pitfall to that approach?

My board will complain, saying, 'Hey, the margin was low on that deal.' But then I'll say, 'What goes around comes around,' meaning I might have sold something at a low margin, but that customer's going to order from me again because I did what they wanted.

That's the whole key. The more attention you put on (customers) and the more you do what they want, the more likely you're going to get the business again.

HOW TO REACH: Distribution Video & Audio Inc., (818) 848-6111 or www.dva.com