John Kiefer proves that you don’t need a college degree to make it big in the business world.

But if there’s one lesson he has learned after 45 years as owner of Kief’s Audio/Video, it’s that there’s no better place to set up shop than down the hill from Mount Oread.

“All the future high spendable-income people of America today are concentrated in college towns — college towns that are strong in engineering, law and medicine,” said Kiefer, who dropped out of Kansas University’s engineering school in 1959, the same year he opened Kief’s in the Malls Shopping Center. “And if you treat them right as a student — regardless of where they go in the United States — they do come back. And that’s good for business.”

These days, 73-year-old Kiefer continues to position his latest shop and showroom for the next few decades. He builds from a foundation that starts with tech-savvy KU students, then continues to grow through a network of 350,000 past customers and KU alumni who previously have shopped his store and remain available to come back for more.

The formula led Kief’s to pass $5 million in revenues a decade ago, and to record double-digit sales gains each year since. The place has grown from a small record shop into a high-tech, 18,000-square-foot showcase along South Iowa Street, anchoring a shopping center that he helped develop and continues to own a share of.

Kief’s sells stereo speakers ranging from $99 to $10,000, and seemingly every form of audio or video component available. The business’s burgeoning custom division dispatches employees to all points of the country — from New York to Seattle — to set up in-home control systems for everything from refrigerators to state-of-the-art home theaters.

The latest: a $270,000 system at a home in Wichita.

“We’ve done systems for a half-million dollars,” he said, reclining in his own “Jayhawk Theater” at Kief’s, where he has 15 demonstration rooms. “It’s definitely a growing part of our business.”

Retail lessons

John Kiefer, owner of Kief's Audio/Video, 2429 Iowa, has built up his business despite competition from discount electronics stores and other national retailers. The store's Jayhawk

But ask him how he can foster such growth and maintain such drive, and Kiefer defers. He’s not that smart, he’ll tell you; it’s that his customers are smart enough to understand the value of a knowledgeable shop, and have the ability to pay for the best equipment they can afford.

That means being, and staying, in Lawrence.

“Those first few years we struggled and weren’t sure, quite honestly, whether we were going to survive,” Kiefer said. “But it did start dawning on us that students remember you and do come back.

“When a student’s a student, for the most part, he’s got time and not so much money. So he does a lot of research. Later on in life he’s got money and not so much time, so he tends to go back to places he trusts.”

Jerry Kowitz remembers hearing it all before — in 1976, when he and Kiefer joined other audio dealers for a first-ever trip to the Yamaha factory in Japan.

The two dealers had started in much the same way — Kowitz had opened Jerry’s Audio Exchange across the street from Arizona State University some six years earlier — but their paths would soon diverge. Kowitz was abandoning the college market, having grown tired of students trading in Garrard turntables and a few $20 bills for refurbished Duals.

“I was really looking to write bigger tickets,” he said. “I wanted to deal with an adult consumer who made a lot of money.”

Today, after having expanded into stores in Phoenix and posh Scottsdale, Ariz., Kowitz is downsizing. He’s de-emphasizing retail — a market flooded with 80 stores in his market area — in favor of audio/video contracting.

“I questioned what John was doing at the time,” Kowitz said, recalling his lengthy conversations with Kiefer during the Japan trip. “I’m happy with the direction I took, but he’s got a lot to be proud of today. He’s had a great strategy. John’s a very smart businessman.”

Todd Towey, inside sales coordinator for Petaluma, Calif.-based Panamax, a manufacturer of power-supply equipment, counts on Kief’s and other independent shops to maintain high standards in the face of intensifying big-box competition.

“We would be out of business without them,” Towney said.

Others in the industry are taking notice of Kiefer’s success. He’s featured in a cover story of the February issue of Dealerscope, a trade magazine for consumer technology retailing.

Wal-Mart connections

The magazine runs through familiar Kiefer tales:

• How Kiefer, soon after opening the records store at The Malls, convinced KU’s dean of women to let him spin records during dinners at sorority houses — a move that led to immediate sales with students, at times $200 to $300 a night for a mere two-hour shift.
• How he supplied records for Sam Walton’s first six Ben Franklin stores — the franchised shops that preceded Walton’s own chain of Wal-Mart five-and-dimes that since then has grown into world’s largest company.
• And how the rising businessman and emerging commercial developer used to own another patch of land along South Iowa Street in Lawrence — until he sold it to Wal-Mart.

Today, he has no regrets.

Kief’s has about 30 employees, five of whom have been with him for more than 30 years. His four-stage pricing system — ranging from guaranteed top-of-the-line, first-run stock with full service down to “cheapest price” refurbished or “gray market” items without any service — allows him to be up front with every customer, whether it’s in the store or over the phone.

And he’s getting even more calls from his dealer friends these days, now that his mug has landed on a magazine cover more than 45 years after he opened that student-oriented records store.

“It’s not like I’m some genius,” he said. “I always say, almost everything I’ve learned, I’ve learned from students.”