iMSO Opens Channels of Communication with Suppliers

Recently completed survey leads to new levels of partnership

The iMSO just wants to talk – you know, about the relationship.

“I’ve believed from the get-go that the job was to figure out what was on their minds and what their perceptions of us are,” says iMSO (Independent Music Store Owners) board member Chris Lovell and owner of Memphis’ Strings and Things. “They” are the manufacturers and suppliers whose products move down the pipeline into independent music stores all over the country and, while it would seem that the lines of communications would have always been open and that a clear understanding of their symbiotic relationship was in place, iMSO has learned what many of the members have long suspected: Misperceptions and misunderstandings abound.

The tool to break this loggerhead and change the course is deceptively simple: A bare-bones, one-page, five-part survey asking basic questions of manufacturers. Implemented by the group in January and dubbed the Partnership Survey, the exercise has yielded positive results, say iMSO board members.

The biggest take-away was the realization that too many manufacturers seem to have lost sight of a basic principle that holds true to all retailers, which is that a margin on a product needs to be in the 33 percent range for a storeowner to be profitable and that would have to include shipping. “If you don’t keep 33 percent of the deal after the sale, you’re not staying in business,” Lovell says. “We know it’s going to be hard to pry those margins up, but in the long run, if we can get them to trust that we can make the sale, we’ll all be much healthier.”

Survey Says
The group’s overall goal, their reason for existence, is still to communicate what they are now. “The whole idea is for the organization to unite independent dealers and be able to speak with one voice, and we’re trying to keep that message as simple as possible,” Lovell says. Right now there is no way to speak directly to the group of independent dealers, there’s no infrastructure in place. “It’s been a big missing link, and now we’re trying to remedy that, but right now we’re only 350 dealers out of thousands. We have to build this one brick at a time.”

An important brick is their Partnership Survey, which was described to be the beginning of a constructive dialog – no “ranting” allowed.

Of course even that wasn’t easy in these post-FCC investigation times we live in. While the vast majority of those asked were “wide open” to participation, some had to discuss the ramifications of completing the questionnaire with their lawyers, even scared off from responding to a simple e-mail on the general topic.

Section I of the survey addressed the perceptions of other independent MI dealer groups. Surprisingly, most manufacturers said that existing groups weren’t working very well, though some had in place a few programs that were mutually beneficial. Not surprisingly, the manufacturer’s felt that they, themselves, were doing a great job with their independent dealers, which was also addressed in this section. This was one of the points that iMSO found interesting because their members overwhelming feel improvements can and should be made.

For Lovell, while there was a disconnect between how manufacturers viewed themselves and how independent retailers did, even understanding each other’s point of view is strategically vital to moving forward.

Section II, about product profitability and turn (strategies, not MAP or pricing), yielded especially tangible results. When the idea of creating proprietary products exclusively for independent retailers was floated, there was great enthusiasm from participating manufacturers about developing specific iMSO-only models. This was something that the manufacturers were ready to do on the spot, and is likely to be something that comes to fruition sooner than later, and arguably the single biggest mutual benefit produced by the survey.

Section III, “What are the Keys to Vendors’ Success,” asked for business strategies and plans for the coming year, a breakdown of their distribution channels (big boxes, chains, Internet, independent retailers), et cetera. Here there were no revelations, with manufacturers all declaring they are working hard to “sell more product through as many channels as possible,” and be competitive in every area they could.

Section IV opened up the opportunity for manufacturers to tell iMSO members what they wanted from them. While having a knowledgeable staff has always been the independent’s greatest strength, assurance that quality levels would be maintained and even improved upon was something that appears to be more important to manufacturers than ever. Another common complaint, that independents merchandising techniques could be improved upon, was addressed as well. This allowed iMSO members to say that they, in fact, need help in that area, and participating manufacturers expressed an eagerness to assist in creating marketing programs, providing point of purchase displays, and other ideas to achieve stronger sales.

Section V, asking for input and suggestions, did not yield any consensus but some general ideas that can’t be heard often enough like, “become more proactive” and, “get out of the store and meet with the community.”

No One Said, “No”
As iMSO shares information from the survey, members are said to be especially looking forward to exploring deeper partnerships through exclusive product and more coordinated marketing. By manufacturers taking an existing model and modifying it exclusively for iMSO members, this would allow an edge. “Almost all were totally into that idea,” Lovell says. “No one said no.”

No one said “no” to the idea of marketing to the ideal of participating in marketing and merchandising programs shared by regional Independent groups, supporting e-mail campaigns, and merchandising aids either. (Many are chomping at the bit to sell products to the group, though that possibility is still just on the drawing board.)

Lovell assures all that this survey is just the start of an information highway that is going to be built and go both ways between iMSO members and those who create the products they carry. “The fact that we haven’t had this organization has made for tons of misunderstanding, and a lot of lost opportunities” he says.

What’s next? “I honestly believe the manufacturer is ready to listen. They need to know more and its kind of one of these things you don’t know you don’t know it. What I saw more than anything they are willing to sit down and talk. We really built a lot of partnership possibilities with just the survey, and they are looking to us to do a follow up one.”

Not that any of it is expected to be easy, he adds. “Part of the problem is we’re an all volunteer organization, and in between doing things like this survey, we have stores to run.

“But I can’t emphasize enough that if we had the types of programs we’re talking about today in place 10 years ago, we’d all be in a whole lot better shape.”