Speeding toward Success – Cincinnati Business Courier – The Business Journals

As Greg Blair scans the road ahead for Escort Inc., the bankruptcy of the company’s predecessor, Cincinnati Microwave, looms in the rearview mirror like a “Smoky” from hell.
But Blair is determined that two-year-old Escort will not fall prey to the traps that snared Microwave.
“We’re not going to stray too far from what people recognize us for,” said Blair, president of Escort Inc., the company formed in 1997 to buy the rights to the popular Escort radar detector line, which put Cincinnati Microwave on the map. “We want to rebuild the image of the Escort brand.”
Where Microwave sought growth by adding low-margin products like cordless telephones to its product mix, Escort is sticking to its lane with the new product it introduced this spring — a premium in-dash radar detector unit called the Passport SR1, that retails for about $1,000 installed.
Still, while the SR1 is a radar detector, Escort is entering new territory in how the product is being marketed.
The SR1 is not being sold directly to consumers through Escort’s traditional channels of mail order and mass merchandisers. Instead, the SR1 is being sold and installed exclusively through a network comprised primarily of automobile dealers, with a smattering of customizing and racing shops thrown in. Escort is also looking to sign deals with companies that install options like “gold packages” en masse for dealers.
“This is really a new business for us,” said Tim Coomer, sales manager for Escort, who worked for Cincinnati Microwave from 1980 until 1991 and returned to Escort last year. “We wanted to offer this product to car dealers so they could have another accessory with a good profit margin that they can bake into a sale. They can use it as a closing tool.”
Blair said the SR1 will not likely generate the high unit volume of Escort’s other products. He hopes the SR1 will eventually account for between 10 and 20 percent of the 90-employee company’s sales, which were $19 million last year. More importantly, he said, the SR1 will provide Escort, like the auto dealers, with a high-margin product.
“We are focusing the company on cash flow and profitability vs. what Microwave did — which was to go for unit volume growth just for the sake of it,” Blair said. “With Microwave, there was a lot of reluctance to dial back product lines to accelerate profitability.”
The state-of-the-art SR1 will likely appeal to high-end car buyers and hard-core highway drivers who will not balk at the price tag. The unit includes a front radar and laser sensor that mounts under the vehicle’s bumper or in the grill. A rear laser sensor mounts on the rear license plate. Both are connected to a small control unit that mounts horizontally or vertically on the dashboard or center console.
To start building a dealer network, Escort did a mass mailing to 15,000 subscribers of Automotive News, a trade publication for auto dealers. The mailer tells dealers they can net up to $500 on each SR1 sale. It also offers dealers a program to carry Escort’s other three products, which do not require installation: the Passport 7500 ($229), the cordless Solo ($199) and the Passport 6800 ($179).
“We think the SR1 will drive sales of the other products,” said Blair, who was with Cincinnati Microwave from 1984 until the bankruptcy, when he was vice president of product planning. Blair was then hired to run Escort Inc. by Matthew Coleman, the Chicago-based businessman who purchased the Escort and Passport radar detector business and factory from Cincinnati Microwave for $10.9 million. Coleman later sold the factory and moved the company to leased space in Union Centre in West Chester.
Coomer rated the response from dealers to the mass mailing so far as just “OK.” He said Escort has signed up about 30 dealers, including Chevrolet and Ford dealers along with the anticipated Porsche and Mercedes Benz dealers.
Escort marketing representatives are now undertaking the laborious process of follow-up calls. One of the challenges, Coomer said, is in determining who the decision maker is in each auto dealer. Sometimes it’s the new car manager, sometimes the general manager and sometimes the finance manager.
“Everything about this is new for us — who to call on, how to set up the accounts,” Coomer said. “We weren’t looking for instant pudding.”
Escort will face competition from several firms that already market built-in radar detectors to auto dealers, including Chicago-based K-40 and Canada-based Beltronics Ltd. But so far, the response from dealers has been positive.
“This unit (the SR1) is higher tech than the others and it’s less expensive. But our margin is just as good,” said Mike Stagge, parts department manager for Dana Motors, a Mercedes dealer in Montgomery. Dana installed one of the first SR1s in a $68,000 Mercedes E55, an ultra-high-powered sedan recently purchased by a local physician who was “already having trouble with the gendarmes,” Stagge said.
“I’ve handled this type of product for years,” said Stagge, who expects to sell about a dozen SR1s a year. “This is the best I’ve seen.”
In addition to establishing a market for the SR1, Blair said Escort plans to roll out more products in the future. While he did not give details, he said the SR1 will likely be a model.
“Our customers are people with cars.” Blair said. “What we’re doing here with the SR1 is creating a distribution network for other products that require installation.”
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