I am going to post our 45 minute interview in 3 separate parts, including video and transcripts. Here is the Part 1 video with transcripts below:
Transcript of Interview with Cliff Levin, President of Inada USA Massage Chairs (Part One)
Cliff Levin: Hello?
Dr. Alan Weidner: Hey Cliff, how are you?
Cliff: Doing fine, thanks. How are you?
Alan: Good. This is Dr. Alan Weidner from 'Massage-Chair-Relief.com', and today we are visiting with Cliff Levin who's the president of Inada USA, and Inada USA, or Inada, is the manufacturer of of our top-selling massage chair, the Inada Sogno. They also have some other chairs that they sell, the Inada Yu•Me, the i1, and also the Doctor's Choice 3A massage chair, and we will talk about probably a good portion of those chairs today in our conversation, but Cliff, thanks for being on board with us today and taking time to visit. Hopefully, our listeners will be able to learn some things, and our viewers will be able to learn some things about Inada that I have not been able to maybe impart, or share with them, in the past, and some insights that you'll have that I think will be beneficial to them. But, one of ...
Cliff: Well, it's a treat to be on with you.
Alan: [laughs] It always is. Now, maybe what we could do would be just to begin with, I mean, we did an audio recording a few years ago when I first started carrying the Inada chairs for you. I think it was in '08, and so, a lot of things have happened since then, but, maybe you could just give an introduction to Inada, and tell our viewers a little bit about Inada, and their history in the US, and just a general once-over on the state of affairs with Inada, right from the get-go, right from the beginning?
Cliff: Sure. I'll keep it short and sweet. The Inada legacy is the longest legacy in the entire massage chair industry. We've been doing massage chairs since 1962. The Inada brand is manufactured in Japan. We are the US distributors. We're based in beautiful Boulder, Colorado, not too far from where you are, in Idaho. I'm sorry …
Cliff: Utah. My bad.
Alan: It's OK. [laughs]
Cliff: I apologize for that. And I was just there, too.
Alan: Yeah, you were.
Cliff: We've been doing this seriously for 6 years, in the US, where we've been importing containers of Japanese-manufactured massage chairs from Inada. And in every one of those 6 years we've grown actually quite dramatically. And in more recent times, the growth has been driven primarily by the chair that you mentioned earlier, which is the Sogno Dreamwave chair. And what is, kind of startling, even to me, is we established this distribution network for Inada. You became one of our dealers, and even through the sort of, worst parts of the recession, the throes, or the deepest parts of the recession, we continued to see fairly dramatic growth in, particularly in the Sogno Dreamwave, and you were very much a part of that. And I think that's a reflection of, really the value proposition, that Inada is. We are not a cheap brand, there is no question, in your mind or my mind or any consumer's mind, that Inada, there's a significant price tag with Inada. But our argument is that, despite that price tag, the functionality you get, the quality of the massage, the scanning technology you get, the legacy, and of course, the wonderful warranty that we offer, you add that all up, and all of a sudden, you know, it starts to make a lot of sense to consumers, and I think you've taught a lot of folks that.
Alan: Yeah, well, I appreciate that. You know, when that recession started in '08, that was when I actually sold my chiropractic clinic, and I was very nervous, because it'd take me a couple years to sell it, because I knew I wanted to do the massage chairs full-time. And I was scared, so scared when we sold the practice, which was the end of May '08, and of course, lo and behold, the recession hits, I think it was July of '08, and I thought, 'Oh my goodness, I finally get out of my chiropractic business, and now I'm in a business that's hit a recession, and who's going to buy a massage chair during the recession?' Well, we were very pleasantly surprised at how well the chairs sales went, particularly with the Sogno. And that's the thing that amazes me, maybe you could speak to this a bit, but the Sogno price has gone up every year since we started carrying it. Now, I know a lot of my viewers, and a lot of my shoppers are not happy about that, but I know it's not because you're just doing it to gouge the clients because you figure you can make more money out of them because the chair's so popular, but there are some economics involved. And maybe you can talk a little bit about that? February of this year it went up 800 dollars, which previous years it had gone up 200 dollars a year, so this year was an incredible jump, and maybe you can talk a little bit about that?
Cliff: Sure. Those price changes are driven primarily by the weakness of the US dollar against the Japanese yen, against the Japanese currency, and these are 100%, these are thoroughly Japanese products. When we buy them, they ship out of a port, the Port of Kobe, in Japan, for anyone who knows their Japanese geography, and we pay for these products, we pay the factory in Japanese yen. So we have to, we become currency traders, not because we want to be, but because it's a necessity for the kind of business we're in, if we want to bring these products in from Japan. And anybody that's paid any attention to the fluctuation between the US dollar and the Japanese yen, has noticed a fairly long-term trend of an ever weakening US dollar. If that trend reverses, in a significant way, I think consumers can expect that they'd expect price changes that are favorable. But of course, manufacturing costs go up in Japan as well, they could effect prices. Fuel costs seem to always be constantly fluctuating, they can impact prices, and they can impact really boring things, like transport costs, when we have to move these chairs across the water, and all kinds of other variables change over time. As I said earlier, in a Sogno Dreamwave chair, or a Yu•Me rocking massage chair, or for that matter, anything from Inada, is never going to be a cheap and cheerful product. You know, that's just not our proposition, part of what's built into that premium price is premium quality, premium service, premium results. We think we deliver an experience that makes people happier, healthier, more productive than any other chair that they could possibly decide to buy. And it's expensive, very high quality product, you know, think Tiffany's, think BMW, you got to think along those lines with us.
Alan: Well thanks, and I've noticed in my showroom that people initially come into the showroom, and we've got about 13, 14 different models from different manufacturers, including the Sogno, including some imitation Sognos, and we'll get to that in a minute, but invariably they want to sit in the Sogno because it has such a compelling look to it to begin with, and then, a lot of the folks that have come in to the showroom have done some research and they know that the Sogno is a very well-respected chair, and very few people can find a negative review on it, including the reviews on my own site, and I think we have like 20 reviews on our product page about the Sogno, just alone, the Sogno. So yes, people tend to be, tend to gravitate towards that chair, but they are not disappointed. Now, you had mentioned to me that your sales, like the price of the Sogno went up 700 dollars February 1st. But the sales in March had actually, almost 100% increased or improved from a year ago March, can you talk a little bit about that in your first quarter as well?
Cliff: I wish I could explain that. I mean, generally speaking, and I can tell you that, as an organization, we were kind of fearful of this. We were not relishing the fact that we had to raise prices on our products in a very, very aggressive way over a fairly short period of time, but as I explained, we were kind of, our hands were kind of tied over what was going on with the currency. Typically, when you have a price increase like that, which was a little more than 10% to retail price, you'd expect a very significant fall-out. That's precisely what I think any reasonable business person, including you, would anticipate.
Alan: I was anticipating that.
Cliff: Yeah, and you didn't see it, and we didn't see it, in terms of the pace of shipments that were going out in Sogno. I don't have a good explanation for you, and we don't have a good explanation for ourselves. Maybe a lot of folks were waiting on the wings in anticipation that Sogno prices, and Inada prices in general, would go down, and once they went up, there was maybe a realization that, 'Geez, if I really want this high-quality product, the longer I wait, potentially the worse it gets'.
Cliff: It's very hard to see into the future, and I can't tell you where we're going in terms of pricing. We could make adjustments one way or the other, you know, from our perspective, perhaps from your perspective as well, we want to encourage people to get in to these chairs as soon as they can and start enjoying the benefits of using this spectacular chair.
Cliff: I'm delighted that the reviews that you get are so positive, and I think, you offer extremely high level of touch, in customer service. When you're dealing with people, when you're dealing with your customers, whether they ultimately buy from you or not, you give them the straight scoop, and I think they have a whole lot of respect for you. The straight scoop from us is this, if you buy a chair, and hopefully we've done right by you as well on this.
Cliff: You buy us, and you have a problem with it, we'll be all over it, we're going to back you up, Dr. Weidner, because you've got a customer on the other end and we understand that.
Cliff: And part of what, part of the ownership experience of having an Inada chair, is that we are very, very serious with the customer experience, not just before somebody buys, but we take very good care of them, after they buy.
Cliff: We cannot get reviews like that, unless we were very serious about that.
Alan: Yeah, and I appreciate that, believe me as a retailer. That's one of the reasons I've been leery to carry some brands of chairs, because they don't have the great after-purchase reputation. And I will say that our philosophies of customer service are very parallel. I am very accessible to my clients, they can call me on my cell phone. I mean, you don't see that very often on an online store, but they can call me directly on my cell phone, any time of the day or night. I may not always hear the phone if it's in the middle of the night, and I have had some calls in the middle of the night. But I am bending over backwards to make sure that my clients are happy. But you are also very attentive, like the fact that today I had a call from a client that was having a chair delivered, in I think, in New Jersey or somewhere out East, and there was a miscommunication between the delivery people and the client. Well, I called you, Alex picked up the phone right away, and invariably, almost always you pick up the phone right away when I call, and he called the shipper right away and they had it straightened away within, I think, five minutes. And I love that. Some other manufacturers, or maybe not manufacturers, but massage chair companies are a little, maybe a little harder to get a hold of, or there's a phone tree or 'leave a message and we'll get back to you within 24 hours', but your customer service, fantastic, it's fantastic, and I really appreciate that. And like I say, it parallels the way we treat our people as well, and I'm grateful that you're at the other end.
Cliff: Well, that's great to hear, thanks.
Alan: Yeah, it's wonderful, it's been a great, great partnership. And the other thing is I have no reservation whatsoever recommending your product. It's not like, 'Yeah, the Sogno is a good chair, but …'. You know, it's a good chair, period. And the fact that it continues to sell, at this high rate, and you had told me that it was a 98% increase in sales from a year ago March, this last March, from a year ago March, speaks volumes to the number of discriminating shoppers out there, and shoppers that have cash available to purchase a chair. And it's remarkable to me, just remarkable, gratefully so, but quite remarkable. Now, you had, you've changed some colors in the chair over the years, since it's been here in the US. You've changed the warranty. You've bumped that up to a three-year, full, parts and labor, on-site warranty, which is the best in the business, and you had a few changes like that. Are there going to be any changes to the chair itself, over the years, other than maybe tweaking a module that may not be, that maybe could work more optimally, or something like that, that people aren't even aware of, but are there any plans on changes to the Sogno?
Cliff: Short answer is, no. And I think you spoke to the important piece of that, which is that ever since the Sogno has come to market, there have been many, many minute tweaks to it. All along the way the chair is ever improving. I mean, from the day it came out, it was an excellent product, but in true, sort of, Japanese, with this, the Japanese manufacturing ethos, can sometimes be very, very hard for Americans to understand, the unbelievable attention to detail, there is no failure rate that's an acceptable failure rate.
Alan. Yeah. Didn't you tell me that …
Cliff: And we've sort of borrowed that ethos, where …
Alan: Sorry, there was a little delay on the recording there, but didn't you say that your failure rate on the i2A, which was the sister chair to the i1 was near zero, like you had a near-zero failure rate. In other words, you had, very, very seldom did you have a problem with that chair.
Cliff: If we took out the shipping damage, which was somebody throwing off the back of a truck.
Alan: [laughs] Yeah.
Cliff: If you took that piece out, we were a fraction of 1% …
Alan: Wow. That is remarkable.
Cliff: … in terms of failure rate. And your buyers should know this, by way of full disclosure. There is no massage chair maker out there, I mean think of car makers, think of anybody manufacturing a complex product, think of Apple Computer, they will not bat 1000.
Cliff: And not every single Sogno arrives perfectly, and we know that, but our promise to you, to the consumer, is that should that happen, we are going to be very, very aggressive, handling that situation. Having said that, I can tell you that, the number of problems we have with Sogno, that are unrelated to shipping, are a very, very tiny portion of the total sales we have.
Cliff: And you know, if you don't like headaches after receiving a product, we're a very, very good bet, very high quality, very high initial quality out of the box, and this sort of, ever improvement attitude, which in Japanese is called 'kaizen' …
Cliff: … you may have heard this term before, is kind of part of the personality of Sogno. So, no dramatic changes, but we're always working with the factory, always informing them. And if we get a flurry of three or four issues, which would be very unusual for them to come in rapid succession, we may raise the red flag, and it's taken very, very seriously. And in the next generation of product, consumers never notice it, you never notice it, sometimes we even forget we've suggested the improvement, but it gets built in to the next generation.
Alan: Wow. That's remarkable.
Dr. Alan Weidner