A Conversation with George Hines

Catching up with George Hines is not for the faint of heart. He’s not just busy running his 10-store MI chain, but also an active leader in the Alliance of Independent Music Merchants (AIMM). He’s traveling not just because he gives presentations and seminars on the art and science of doing business, it’s that he’s also attending sessions himself.

“We’re in a period of rapid change — truly a revolutionary period,” he told MMR one recent Thursday. It’s a moment he, and the other members of AIMM, feel prepared for. By gathering the “best and the brightest” in MI retail and partnering with like-minded forward thinkers on the supplier/manufacturer side, AIMM as an entity is prepared to “lead the charge through the changing landscape.”

The group, which today represents 54 retailers with approximately 200 storefronts, is a “pretty unbelievable group in terms of talent,” Hines says. “They are a largely a pragmatic bunch who live and breathe the business. After 10 years of AIMM being an organization, we are still warriors.” The group is still selectively growing, and most recently added a young, fresh retailer in Hawaii, Peter Dods of Easy Music.

On a Mission

MMR: What has changed for AIMM from year one to year 10?
GH: Our primary interest is the same: leading the charge as the industry goes through some radical changes in history. We want to have control in helping guide the industry in a good way, a way that will benefit all of us who love this business dearly… We’re on a mission from God! [laughs]

MMR: AIMM seems to be a group that is stronger than the sum of its parts.
George Hines: Yes. We’re constantly looking at who in the group is doing something particularly well, and we try to bring the rest of the group up to that level. For example [co-founder and Skip's Music owner] Skip [Maggiora] and [co-founder and Musicians Superstore owner] Bob [Bankston] are extremely strong on the promotional and marketing side of things. We can look at things as they do, and recreate some of their programs elsewhere. Another example is Jon Haber of Alto Music. He’s been experimenting with unique online sales approaches. So we share information that leverages each other’s strength.

MMR: What general things are you trying to leverage to your advantage?
GH: Certain forces are working for us, and we are going forward. We’re going forward with technology, using it to increase customer satisfaction. We’re doing online video, e-mail blasts, and just increasing how and how often we communicate with customers.

We’re in the middle of a communication revolution – instant messaging, all these tools. We’re using them as retailers, but we’re also looking at how to use them with our vendors. There’s a lot of opportunity to speed up the way we do business.

MMR: What are some of the things you’re working on now?
GH: One of the key things is the development of the relationship between suppliers and retailers. We rely heavily on each other, but the challenge is in the way we each look at business. We have different issues. Suppliers look at the time it takes to go to market and what will be popular in three or six months. They deal with foreign currency issues, global market issues, etc.

Retailers are dealing with an ever-demanding consumer. We’re working to provide the extra services necessary for succeeding… so we’re looking at things from totally different sides. So building a trust, an understanding, and working together to best serve the customer are key. Without trust and understanding, we lose an opportunity to gain market share.

MMR: How many vendors does AIMM use as a group?
GH: We pretty much have all the product categories covered, and in some cases, multiple vendors where we are dealing with a large category such as guitars or accessory suppliers. It’s a very select group. We don’t add a lot of vendors, and we’ve had very few changes over the last 10 years.

MMR: Is AIMM working with its vendors closer than ever?
GH: Yes. AIMM develops product. From the ground up – design, what features are included… we have situations where manufacturers build goods and license names that we create. We try to find where there’s an opportunity with the consumer and then help meet a particular need.

Nationally, we can offer a consumer finance program that is extremely competitive, and it allows us to do 14-month and even two-year extended financing programs. Right now we’re doing a national promotion in association with one of our guitar suppliers. It’s a situation where both sides are focusing on our common customer, and it’s good for the industry.

Bad Times = Good Times?

MMR: Speaking of finances, are AIMM members feeling and seeing the credit crunch?
GH: Everybody is looking at what is going to happen down the road. Everybody is in a cautious mood, and that’s okay. But we have to look at what we want, not what we don’t what. Focus on what you want, and then just figure out how to get it. So what we’re focusing on is how do we appeal to our customers and get them to buy from us?

MMR: What are you hearing from AIMM members in regards to the economy, and what’s your outlook?
GH: If you were to ask that question in the beginning of the year, I’d say we’re really optimistic! [laughs] If you asked that question during the financial bailout in October, you’d get a different answer.

But the members are all warriors. They are used to being in the business, and many have 30, 40, 50 years in the business. They have a lot of battle scars so whenever something like this occurs, there’s some experience to draw from. Also, we have to remember that for many independent retailers, it’s not just about money. It’s passion. It’s lifestyle. Being in this business is a choice they feel very strongly about.

MMR: So it’s an especially good time to be a member of AIMM…
GH: We’re all in this together, and these groups are especially important during times like these. It’s like what they told us when we were growing up: “choose your friends wisely.” We learn and look out for each other. That’s what makes it great.

MMR: Are there things you’re encouraging your members to do, to try during these times?
GH: [laughs] Be lean! Otherwise, there’s a lot of listening going on.

I have a saying: Complacency is the enemy of excellence. One of the things we look for in a retailer, when we’re considering bringing them into the group, is that they are not complacent. We’re not looking for people sitting on how many years they’ve been in business. We’re looking for people who want to get better, learn new ways of doing things. We all want to take things to the next level. We get together in a room, and it’s energizing. We feed off each other.

MMR: Is there possibly an opportunity with the current economy?
GH: It’s funny – sometimes we forget that we are in fact in the entertainment business, and if we’re in a recession, we should remember that people tend to go to entertainment during times like this. It’s something that makes people feel better. It grounds them. Singing and playing music is part of that.

MMR: I do remember being surprised right after 9/11—I was speaking to MI retailers, and many reported an upsurge in sales. People wanted to buy pianos and stay home and make music.
GH: I know what you mean.

I was on the phone with a customer two weeks ago. I noticed he was buying a lot of high-end guitars. So I called him to thank and then said I was curious, and wanted to know why he was buying so many high-end guitars. He said he was a retired accountant, he thought the stock market was going in the wrong direction, and thought guitars were a better investment! This is a guy who bought approximately $60,000 worth of guitars, and is looking to buy more! So not only is it a better investment, but he gets to look at them and play them! It doesn’t get much better than that …

The Future of AIMM

MMR: How often do you meet, and how do you share ideas?
GH: We have two full membership meetings a year, and we typically do them before a trade show. These are all- day meetings, and we bring in outside keynote speakers. Then we have a lot of break out groups on different topics – Web-based ecommerce products, ways to communicate with the customer, financial balance sheet topics, et cetera.

MMR: How do you decide on the topics?
GH: We’ll do surveys during the year, learn what’s of interest, and find people within the group with expertise in that area. It’s great to allow members to make presentations.

MMR: With such a diverse group, you probably have a lot to pool from…
GH: I’d say at this point, half of the membership has been involved in some presentation or another.

MMR: Going forward – what’s the future of the organization? Where would you like to see AIMM in five or ten years?
GH: It’s harder to look at the future than it used to be. We’ll be adding additional retailers, cautiously and slowly. It’s not a matter of numbers but of quality. We may add or subtract from our vendor list.

But we see the growth of AIMM coming from different levels. We will create better relationships with vendors, and get more involved in the designing of product … the possibilities are almost limitless. Also maybe create a subgroup of AIMM comprised of younger, newer retailers. Maybe mentor more.

We did a leadership conference a few years ago and invited 100 up and coming retailers, smart guys in the market, younger like we all used to be! [laughs] AIMM paid for the event and asked them to come, and thought they might benefit from learning some of what we’ve learned over the years, and we knew that we could learn from them.