Lead-Putting in a good word for the competition

For some small businesses, the key to success might not be to trounce your competitors. Instead, the way to get ahead, oddly enough, might be to lend a helping hand to the people you consider your competitors.

Strange as it may seem, there are plenty of stores that are doing exactly that , and winning.

Pete McCall, who owns Frank the Train Man, a University Heights hobby store for train enthusiasts, frequently refers customers to other train stores throughout San Diego, and they refer business his way, he said.

McCall estimates he’ll refer customers elsewhere about three times a week, while he gets customers referred to him about twice a week.

“We got a referral last week from a radio-control hobby place in Chula Vista. And they found out that one of their customer’s interests was trains, and told him, ‘You have to go see Frank the Train Man,’” he said.

It’s fairly easy to refer customers to other stores because they don’t carry the same items. In his case, he carries merchandise for hard-core model train enthusiasts.

But other stores are different. As an example, he cited Rob Freeburn, owner of Old Town-based Trains Are Good. McCall met his colleague at a trade show, and knows that the other store features mostly train-related paraphernalia, such as T-shirts and toy trains for children.

Freeburn agreed. He estimated he’ll refer people elsewhere at least once a day, and receive referrals as often.

“If I don’t carry the product, then rather than giving the people a cold, flat ‘No’ and since I’m knowledgeable in my general area of train stuff, I would know where to send people,” he said. “If they’re looking for a certain size of train, (I know) which store would have it so they don’t go to the wrong place.”

The stores that receive the customers are grateful, and they reciprocate, Freeburn added.

Reed’s Hobby Shop in La Mesa is one such store. Dick Trotter, assistant manager at the store, said no hobby shop has the space or financial resources to carry everything.

“Our store has probably got 100,000 items in it. At tops, I got maybe 20 percent, 25 percent of what’s out there,” he said. “And that’s about average for a moderate-sized, small-business hobby shop. There’s just so much product available for the different hobbies , trains, planes, etc., etc.,” he said.

But two stores, each with a different product line, could collectively carry 35 or 40 percent of all available merchandise, Trotter said.

Trotter has few problems sending people to other stores because he remembers which stores have sent someone to him, he said.

Nor does he worry about losing customers to the hypothetical “Bob” down the street.

“My customer’s going to come back to me, because he knows what I’ve got. Sure, he may go over to Bob and buy something here or there, but Bob’s going to send his customers over here. I’m not going to try to gobble up his customers,” Trotter said.

Toy train hobbyists aren’t the only ones benefiting from mutual referrals. Ted Kniffing, of Kniffing’s Discount Nurseries in El Cajon, echoed Trotter’s sentiments.

Kniffing, who said he has the largest selection of roses in Southern California, frequently fields referrals from Walter Andersen’s Nursery in Point Loma, City Farmers Nursery in City Heights, and elsewhere.

“A lot of times Walter Andersen’s did refer a customer to me and this customer will continue coming back. And they’re still going to go to Walter Andersen’s,” he said. “Walter Andersen’s has got a lot of bonsai plants, and lily plants for ponds, which I don’t carry. So that customer’s happy.”

Mark Mahady, nursery manager for Walter Andersen’s, agreed.

“It works both ways,” he said. “City Farmers is a very small nursery. As far as plant material goes, we have a much larger variety of stuff that we deal with. But when it comes to soils and such, he is in the landscape end of it. We don’t handle that. So we pass that off to him.”

Helping each other out also keeps the independent nurseries solvent. A number of the smaller nurseries have gone out of business when faced with big-box stores like Home Depot and Home Base.

But Bill Tall, manager for City Farmers, doesn’t see the big box stores as competitors. If a large store runs an ad for bulbs, it sparks an interest in gardening, and people still have the option of going to that store or one that’s closer to home, he said.

“Any advertising anybody else does is a contribution to our sales as well,” he said.

Also, once advertising creates an interest in nursery products, the little guys will eventually benefit. As people take up the hobby seriously, they’ll go to the small stores to find specific items the larger stores don’t carry. In Kniffing’s case, it’s roses, while for Andersen it’s orchids, and Tall carries hydroponics and specialty soils, he said.

The only people Tall considers to be his competitors are the sporting goods stores and travel agents. People have only a limited amount of free time and discretionary income, and there’s a limited number of hobbies people can fill their free time with, he said.

Used book stores, meanwhile, also benefit from cooperation. Jan Tonnesen, assistant manager of Wahrenbrock’s Book Store, in Downtown, will refer a customer to a competitor if his store doesn’t carry it.

For Tonnesen, running a used bookstore is different from selling insurance, for example. In such a business, the product or service is largely identical from one location to the next, so stores have to compete against each other, he said.

But in his line of work, products vary at each location. If Wahrenbrock’s doesn’t have a particular book, Tonnesen is glad to help the customer find it elsewhere, because that person will come back, remembering the good service he received.

Another important difference is that used bookstores, unlike insurance firms, get frequent repeat business.

“If you like this one author, you’re going to come back to buy another book by that author. Or if it’s somebody that I recommended, they may come back to me for another recommendation,” Tonnesen said.

Another example of how booksellers work together is to jointly rent space at major book fairs and sell each others’ books, he said.

Brian Lucas echoed that theme. As the owner of Adams Avenue Bookstore, his shop is one of about a half-dozen used bookstores along Adams Avenue.

Just about every day, Lucas will refer his customers to another store. And other stores will refer their business to him with the same frequency, he said.

“Each of us carries a lot of books that the others do not carry,” he said. “We’ve called stores for people to check on books, or we send people to other stores. Since we’ve known the book-selling community for quite a few years, we’ve a pretty good idea which store would have the best chance of assisting someone if we’re not able to do that.”

The booksellers all know each other and are fairly close. Helping each other out keeps local bookstores alive in an era when people are turning more and more to the Internet, he said