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Junior Varsity
Uli Behringer of The Music Group Q&A
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<blockquote data-quote="Uli Behringer" data-source="post: 51452" data-attributes="member: 1604"><p>Re: Uli Behringer of The Music Group Q&A</p><p></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Dear John, (and others),</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Thank you for your comments. You make several important points here and I’d like to address them individually.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"><strong>First is the issue of product reliability and the public perception about our products in that regard.</strong></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"><strong></strong></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"><strong></strong>To be clear, there is no manufacturer who can guarantee defect-free products no matter how much emphasis they put on using quality components and quality assurance systems. Ultimately all products will fail – the question really is when and how. Just look at how many times NASA has to cancel or delay space launches as an extreme example or how frequently high-quality automotive companies have to recall cars.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">In the electronics industry we buy components from reputable semiconductor manufacturers such as Analog Devices, Texas Instruments, Motorola and others who specify their anticipated component failure rates in ppm (which stands for "parts per million"). Those ppm numbers sound very low but consider what happens when for example 7,000 parts are combined into one large mixer. Suddenly, the statistical failure rate increases dramatically and now you’re talking significant percentages.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Someone here asked for our internal failure rate numbers but frankly they are irrelevant as they can’t be independently verified. We have instead elected to direct people to the actual failure rate numbers published on the Thomann.de site which are there for public viewing. You can see clearly that ours are among the lowest failure rates of any company in the industry.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">There is however a persistent belief in the marketplace that our products are more prone to failure than those of other manufacturers. This false perception is driven by a second important dynamic that isn’t really clear to many people. That is the sheer volume of product that we produce and sell; more than 5 million pieces annually! When you think about it, even 1% of that volume equates to 50,000 pieces; enough to ensure that our products are going to be found on a repair bench more often than others.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">The reality is that our products are much better than this perception would lead one to believe. With 5 million products a year and the slim margins we work on, if our products were generally fault-prone we would have been out of business long ago. Instead we focus on failure prevention where the cost is far lower than trying to clean up a mess through after-sale service. Our dramatic growth underlines that customers are happy with what they are buying from us.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">That said we are the first to admit that we are certainly not perfect and have made mistakes in the past. But we have improved greatly and continue to get better every day by making the necessary investments in the equipment and fantastic people who care and who take immense pride in what they do. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">As a direct result, we have now reached a quality level that allows us to confidently offer a <strong>3-Year Warranty Program</strong> since the beginning of this year.</span></span></p><p> <span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"><strong>I must admit however that our customer service left something to be desired in recent years. </strong></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"><strong></strong></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"><strong></strong>As our business doubled year over year, we failed to take proper care of our customers and struggled to build the support infrastructure. We relied on external service centers and third party spare parts providers that clearly didn’t work and I apologize for that on behalf of the Company.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">We’ve learned our lesson and have since made significant investments in our Customer Care Operation. We have recently purchased a state of the art facility in Las Vegas that houses our US response team, repair depot and parts fulfillment. We also repurposed our Midas manufacturing facility in Kidderminster, UK to serve as our European Care Center. Overall, our Care Division now employs over 125 employees on four continents providing support in 7 languages and we’re investing more. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">While we haven't achieved the desired Customer Care level yet, it is our Company goal is to provide the very best customer experience in the industry.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">And finally, the new <strong>X32 digital mixing console </strong>is the most sophisticated and most exciting product we have developed in our 23 years of company history. It was the first product that was designed by our German engineering team in collaboration with the Midas team in the UK. I am very proud of the people who designed this product, also because it is a step change and the start of new journey for our Company.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">The X32 is the realization of a long quest to not only follow the market but to take a leadership position. This is a product that combines all of our expertise, our ability to build great product and just as importantly to do it at a price many can afford. We are investing in intellectual property, in design and engineering talent and the X32 showcases the result of those investments better than any brochure, website or advertising could ever do.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Of course you have every right to be skeptical and so you should be, as this is a big investment. All that I can tell you is that we have done our homework on the X32 and I believe that it will prove to be a landmark product for the industry. The very same engineers responsible for the hardware, software and development of Midas consoles as well as our other 500+ products have invested their talents into making this our best product ever. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Plus, we stand behind every X32 with a full 3-Year Warranty Program!</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Thanks again for the opportunity to answer your well-considered questions.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p></blockquote><p></p>
[QUOTE="Uli Behringer, post: 51452, member: 1604"] Re: Uli Behringer of The Music Group Q&A [SIZE=2][FONT=verdana]Dear John, (and others), Thank you for your comments. You make several important points here and I’d like to address them individually. [B]First is the issue of product reliability and the public perception about our products in that regard. [/B]To be clear, there is no manufacturer who can guarantee defect-free products no matter how much emphasis they put on using quality components and quality assurance systems. Ultimately all products will fail – the question really is when and how. Just look at how many times NASA has to cancel or delay space launches as an extreme example or how frequently high-quality automotive companies have to recall cars. In the electronics industry we buy components from reputable semiconductor manufacturers such as Analog Devices, Texas Instruments, Motorola and others who specify their anticipated component failure rates in ppm (which stands for "parts per million"). Those ppm numbers sound very low but consider what happens when for example 7,000 parts are combined into one large mixer. Suddenly, the statistical failure rate increases dramatically and now you’re talking significant percentages. Someone here asked for our internal failure rate numbers but frankly they are irrelevant as they can’t be independently verified. We have instead elected to direct people to the actual failure rate numbers published on the Thomann.de site which are there for public viewing. You can see clearly that ours are among the lowest failure rates of any company in the industry. There is however a persistent belief in the marketplace that our products are more prone to failure than those of other manufacturers. This false perception is driven by a second important dynamic that isn’t really clear to many people. That is the sheer volume of product that we produce and sell; more than 5 million pieces annually! When you think about it, even 1% of that volume equates to 50,000 pieces; enough to ensure that our products are going to be found on a repair bench more often than others. The reality is that our products are much better than this perception would lead one to believe. With 5 million products a year and the slim margins we work on, if our products were generally fault-prone we would have been out of business long ago. Instead we focus on failure prevention where the cost is far lower than trying to clean up a mess through after-sale service. Our dramatic growth underlines that customers are happy with what they are buying from us. That said we are the first to admit that we are certainly not perfect and have made mistakes in the past. But we have improved greatly and continue to get better every day by making the necessary investments in the equipment and fantastic people who care and who take immense pride in what they do. As a direct result, we have now reached a quality level that allows us to confidently offer a [B]3-Year Warranty Program[/B] since the beginning of this year. [B]I must admit however that our customer service left something to be desired in recent years. [/B]As our business doubled year over year, we failed to take proper care of our customers and struggled to build the support infrastructure. We relied on external service centers and third party spare parts providers that clearly didn’t work and I apologize for that on behalf of the Company. We’ve learned our lesson and have since made significant investments in our Customer Care Operation. We have recently purchased a state of the art facility in Las Vegas that houses our US response team, repair depot and parts fulfillment. We also repurposed our Midas manufacturing facility in Kidderminster, UK to serve as our European Care Center. Overall, our Care Division now employs over 125 employees on four continents providing support in 7 languages and we’re investing more. While we haven't achieved the desired Customer Care level yet, it is our Company goal is to provide the very best customer experience in the industry. And finally, the new [B]X32 digital mixing console [/B]is the most sophisticated and most exciting product we have developed in our 23 years of company history. It was the first product that was designed by our German engineering team in collaboration with the Midas team in the UK. I am very proud of the people who designed this product, also because it is a step change and the start of new journey for our Company. The X32 is the realization of a long quest to not only follow the market but to take a leadership position. This is a product that combines all of our expertise, our ability to build great product and just as importantly to do it at a price many can afford. We are investing in intellectual property, in design and engineering talent and the X32 showcases the result of those investments better than any brochure, website or advertising could ever do. Of course you have every right to be skeptical and so you should be, as this is a big investment. All that I can tell you is that we have done our homework on the X32 and I believe that it will prove to be a landmark product for the industry. The very same engineers responsible for the hardware, software and development of Midas consoles as well as our other 500+ products have invested their talents into making this our best product ever. Plus, we stand behind every X32 with a full 3-Year Warranty Program! Thanks again for the opportunity to answer your well-considered questions. [/FONT][/SIZE] [/QUOTE]
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