Garden retailers who 'go it alone' and are exccessively protective of information about their business and its performance can miss out on all the many benefits to be had from joining a retail group. There's much to be gained from sharing and learning with your peers.
There are lots of ways we can learn, and improve and develop – schools and universities, courses, seminars, in- house training, on the job, by our mistakes! All of these are good and have merit in their own right. Our job is to ensure that we take advantage of each of these opportunities as they present themselves.
We can take this new knowledge or skill back to our place of work and hopefully apply it to our day to day activities ( though sadly how often is this not the case!). We can see improvements and get a sense of doing better. Often our sales figures tell us we are doing well! But how well are we really doing? Are we doing as well as we have the potential to do, are we doing as well as our peers?
As garden retailers we can be quite possessive and protective about our business performance. To a degree this is fair enough. We would be foolish to give away information of a commercially sensitive nature. Or would we? Are we possessive and protective, or are we paranoic?
Over the years I have, and still do, worked with a lot of garden retail groups. In every case without exception they have performed better than their independent peers. Why is this? It could be argued that they have economies of scale, better buying power, cost effective marketing practices, centralised administration etc. All of these are true and valid. But not every group I work with is a Corporate, Co-operative, or Franchised group. Some just work together to share and to learn.
The key element that links the groups that we work with is that they all take part in Key Performance measuring and monitoring. This not only enables them to take better control of their own business, but, because they share and compare this information with their fellow group members ,allows them to benchmark their performance and pick up tips and information from their peers.
Benchmarking can be done in a confidential way. Shared results are often given in percentages, not actual dollar figures. The performance indicators that are benchmarked and shared are sales by product category, customer numbers, average sale, gross margins achieved, stock turn, GMROI, expenses by category. How does this benchmarking and sharing help us to learn? In a sense it is easy for us to operate in a vacuum – not really sure what others are achieving. But if we knew that a similsr store to ours had a 30% increase in tree sales, or that their wages percentage of sales were 3% lower than ours then wouldn’t we want to know what they were doing and how they were doing it?
Only this morning I had a classic example of how this group sharing can work in a practical way. A member of one of the groups we work with has emailed all the other members to get some information on what wage rates they are paying to differing levels of staff in their business. As in all businesses his staff are keen to have wage increases. What he wants to know is, are the wages he pays in line with what others are doing – is he really the tight skinflint his staff would have him believe, or the over generous benefactor he sees in the mirror each morning? This knowledge will help him to manage his business better.
The trick with groups is to select from a wide catchment. In New Zealand we are running a pilot programme under the auspices of the Nursery and Garden Industry Association. Our group is made up of retailers from one province in New Zealand, but each is from a different town, some distance apart the one from the other. Another group in NZ is likewise spread across the country, similarly in Ireland and in Australia. So you are not sharing information with your immediate neighbour in direct competition with you, but you are sharing with simlar sized retailers from similar sized towns who operate in pretty much the same environment as you do.
At the same time don’t spread your selves too far and wide. One of the real benefits of being part of a group is to physically meet 2-3 times per year for workshops, networking, comparing results, getting to know and trust each other, sharing and learning.
So if an opportunity comes along to be part of a group don’t be shy. You don’t have to reveal the most intimate or secret details of your business, you don’t have to lose any of your independence. All you need is an open mind, a willingness to share and to learn. The benefits to you and your business will be far greater than you think. That’s why groups invariably perform better than individuals.
- John Russell
There's further information about Structures, Strategies and Operations of Groups in Module 6 of our Marketing Manual
Read more about Benchmarking