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Marketing: Strength in Numbers?

Question:

Some local breeders would like to get together to pool our resources for advertising and also to offer more sales prospects at one time. Our thoughts are that we can put all of our sales horses together in such a way that a person could fly into our area and see 5-7 horses (visiting different farms) that would fit their needs on one trip. We want to create a non-formal group and help each other out, and in the long run increase overall sales in our area. Are there any obvious pitfalls to our plans? Can this be done in a non-formal way? How do we make sure that everyone gets equal exposure and doesn't feel angry if another breeder makes a sale? Thanks!

Answer:

One of the most common reasons that horse buyers give for heading to Europe is the ability to see and try more horses in one location. “Breeders groups” are an excellent method for horse sellers in North America to make a horse-shopping trip worth the buyer’s time and money.

Sellers can benefit in several ways from participation in these groups. As a group they can purchase more and bigger ads and pursue other marketing venues more economically than by acting alone. An established group provides a ready-made network, allowing individual sellers a way to receive referrals from other breeders as well as to help their shopping clients locate the best horse for their circumstances.

There are many variations in the structure of these groups, from corporations to much less formal arrangements. Generally speaking, the larger the group, the more formality is required. Planning is important, to define the purpose and scope of the group and establish rules that promote fairness.

When starting a group you should think about many factors, and I will discuss a few of them here.

Similarity of offerings. For the most effective group advertising, it helps if the collective offerings share a target market. For example, a farm specializing in breeding Arabians for park will probably not get the best results by allying with a group whose members specialize in breeding warmbloods for dressage. Because of the differences in the target markets it will be difficult to design and place advertising that reaches both groups. A shopper who calls an warmblood breeder is not likely to be helped by a referral to a park-style Arabian breeder, so the latter also has limited opportunities to benefit through referrals.
Similar values and commitment to the group. While composed of individual sellers, a breeders’ group is most effective when each of the members keeps the team spirit. Each member should strive to serve clients by helping them find the right horse within the group’s offerings.
Commissions and other incentives. There can be an uneven distribution of referrals when some group members offer incentives and others do not. For example, if one member offers a sales commission to the referrer and others do not, that one member may get a disproportionate number of referrals from fellow members. The reasoning is simple: If you have a shopper that needs a type of horse that you don’t have to sell to her, and you know of two horses within the group that are likely to fill her needs, it is more appealing to send the shopper to the seller who will pay you a commission.

This may be acceptable to some groups and not to others. Depending on the group’s desires and structure, a group could have a rule about handling commissions (i.e., no commissions within the group, an established commission rate for all members, or some other method of dealing with the issue).
Level of marketing assistance provided. Some groups are organized strictly to provide cooperative advertising, using print and in many cases a common website. Other groups encourage more activity and contact between the members, with newsletters, regular meetings, and group-sponsored clinics and booths at horse fairs. Even at the most basic level of sharing print ads, you need to consider how the ads will be designed, whose horses are pictured in each ad, and so on.

At the very basic planning stages, try to think of all of the possible scenarios and situations that may arise as the group operates. Then, adopt rules for the group that will promote fairness and help to avoid any negative outcomes. Plan how the shared resources will be used. And encourage members to communicate to minimize misunderstandings.

Do you belong to a breeders’ group? We would all love to hear about your experiences and the ins and outs of how your group operates. Send an email to Ingrid@equinnovation.com. I’ll publish your comments in a future issue of The Edge, and give your group a plug!

Have you got a question about equine marketing that you would like answered? Submit your question by email to: Ingrid@equinnovation.com

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