Podcast

In this episode, we have our guest Brian Beck from Enceiba, who discusses key trends in B2B e-commerce, including the rise of Amazon’s prominence in B2B product research and buying, and why manufacturers and distributors should be paying attention and acting now. 

We also touched on the digital transformation landscape for B2B e-commerce businesses, and how CEOs can begin their journey of e-commerce enablement. If you are looking for research-based insights from an industry expert, long-time practitioner, and author who spent 4 years interviewing your peers and competitors, this episode is a must-listen for you.

Chapter Markers

• [0:00] Intro
• [2:55] Personal journey and current focus
• [8:07] Perspective on growth
• [11:15] how COVID is going to change B2B E-commerce?
• [14:47] How is B2B E-commerce different from B2C?
• [19:18] Difference between B2B e-commerce versus B2B Commerce
• [24:15] How big is B2B E-commerce opportunity?
• [27:58] Is Amazon a threat to manufacturers and distributors?
• [31:48] B2B E-commerce platform selection process
• [34:10] Closing thoughts
• [39:40] Outro

Key Takeaways

• Within three or four years, by 2025, 75% of the B2B buyers are going to be millennials, who are Amazon natives, digital natives; they use Amazon for almost 100% of their online shopping. So these folks are coming to your website with an expectation that you’re going to deliver. And if you’re not, those customers are looking elsewhere.
• Once you show people that this is an easier path or and saves them time and, in some cases money, to use e-commerce, they’re not going back. They’re going to stick with e-commerce because, particularly in B2B, if you make the buyers’ job easier, they’re going to continue that behavior.
• At the end of 2021, we’re still going to have 30% of the workforce here in the US working remotely 30%. That means that’s 30%; you’re not going to go show up at someone’s house to sell them a product. You have to reach them digitally.
• Amazon is getting 70% of product search where, in other words, where the product search starts. So people kick open their browser, and they, five years ago, they would go to Google and type in a product name. That behavior has now shifted 70% of it to Amazon. And if you look at Amazon’s B2B business, it has become the fastest-growing part of Amazon.
• Amazon is selling if you look at where they’re making progress; it’s in things like MRO, industrial products, medical dental. Last year, Amazon and the medical and dental space did over $2 billion in revenue. And this is not just over-the-counter stuff. If you’re in the medical field, we’re talking about regulated type II, class II medical devices, which the FDA regulates. Amazon is putting in workflows to accommodate this.

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About Brian

Brian Beck has 20+ years of experience, including more than a decade as a hands-on C-level Ecommerce executive. Brian currently serves as the Managing Partner of Enceiba, the industry’s only Amazon consultancy focused on serving the B2B industry, and he is the author of the first comprehensive book on B2B Ecommerce, entitled “Billion Dollar B2B Ecommerce”.

Resources

• Connect with Brian
  • LinkedIn
• Connect with Enceiba
  • Website | LinkedIn

Full Transcript

Brian Beck 0:00

So I think the long-term impact number one is increased adoption, and it’s accelerated. You know, we’ve seen ten years of acceleration in eight months in the B2B e-commerce field.

Intro 0:13

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies. So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast, where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta 0:50

Hey everyone, welcome back to another episode of The WBS podcast. I’m Sam Gupta, your host, and principal consultant at a digital transformation consulting firm, ElevatIQ.

Traditionally, B2B businesses have been relationship-based. However, in the modern digitally centered buying process, 70% of the buyers now fully define their needs on their own before engaging with a sales representative. B2B businesses need to critically review their go-to-market strategy before it’s too late. COVID has further fueled the rise of e-commerce. Also, with Facebook buying Kustomer, we will see a convergence of B2B and B2C. And marketplaces such as Amazon will play a key role in the success of B2B businesses.

In today’s episode, we have our guest Brian Beck from Enceiba, who discusses key trends in B2B commerce, including the rise of Amazon’s prominence in B2B product research and buying, and why manufacturers and distributors should be paying attention and acting now. We also touched on the digital transformation landscape for B2B e-commerce businesses and how CEOs can begin their journey of e-commerce enablement. If you’re looking for research-based insights from an industry expert, longtime practitioner, and author who spent four years interviewing your peers and competitors, this episode is a must-listen for you.

Let me introduce Brian to you.

Brian back has 20 plus years of experience, including more than a decade as a hands-on C-Level ecommerce executive. Brian currently serves as the managing partner of Enceiba, the industry’s only Amazon consultancy focused on serving the B2B industry. And he is the author of the first comprehensive book on B2B e-commerce entitled Billion-dollar B2B E-commerce.

With that, let’s get to the conversation.

Hey, Brian, welcome to the show.

Brian Beck 2:52

Hey, Sam. I’m glad to be here. Thanks so much for having me.

Sam Gupta 2:55

Okay, amazing. I’m super excited to have you as well. So to kick things off, do you want to start with your personal story? What are you focusing on these days?

Brian Beck 3:04

Yeah, no problems. And well, hey, again, thanks for having me. So yes, I’m a 20 year veteran in the e-commerce field. I’ve been an executive in charge of e-commerce and a CEO and COO at companies throughout the e-commerce field.

Most of my career was spent as an e-commerce expert for retail and consumer brands. And Sam, I got into the e-commerce field for B2B about five years ago, advising companies on how to develop their e-commerce and digital transformation efforts for companies. Again, the kind of B2B manufacturers and distributors folks who have had no real history in selling or leveraging digital to reach their customers.

And, Sam, when I got into doing this, I was asked by my clients, hey, is there a place I can go to read about these? How to do this? And Gosh, I couldn’t find anything.

So I decided foolishly to write a book.

Sam Gupta 4:17

Okay, you are being super humble here. And by the way, you mentioned 20 years veteran. When I talk to book authors, typically, that’s going to be 4 times as much experience. So, in my mind, you are an 80-years veteran.

Brian Beck 4:26

Thank you, Sam. Yes, I ran e-commerce for several companies and successfully built some companies’ e-commerce efforts to over $100 million in revenue. And so I did some things right, I guess. And I wanted to put that into writing. Because what I realized was that, without a resource, like a book, people didn’t have a good foundation. So I basically wrote my 18 years.

Brian Beck 5:09

So the book is called billion dollar B2B e-commerce. And it’s 100 pages long. It’s 12 chapters. But it’s every element that a B2B company needs to build its digital transformation. It’s everything from the leadership and organizational elements required to manage channel conflict, align your selling channels, and make sure your sales forces align with what you’re doing in e-commerce.

It also includes building a technology foundation. This effort requires investment in technology to do this well. And then how to market and how to deal with and manage your presence on marketplaces like Amazon. And how to adopt the principles of B2C e-commerce for B2B success.

There is so much we’ve learned Sam over the last 20 years. From our work with B2C e-commerce, there are so many best practices that have been well established now. And your B2B buyer today expects those from you.

So interesting fact, Sam. Within three or four years, I think by 2025, 75% of the B2B buyers are going to be millennials. These are people born between 1980 and 2000.

Brian Beck 6:32

These people are Amazon natives, digital natives; they use Amazon for almost 100% of their online shopping, at least a portion of it. So these folks are coming to your website with an expectation that you’re going to deliver.

And if you’re not, those customers are looking elsewhere.

So there’s a real mandate. And, frankly, this whole event with COVID has just accelerated everything that’s going on in the market. So, it’s a mandate; it’s a call to action. And, the book, I didn’t time it this way. But when it came out earlier this year, Sam, it’s been a resource for a lot of companies. I get calls from these companies, and their whole executive team has read the book, and they’ve got it all your marketing, got post-it notes sticking out, and it’s great. And I am grateful and thankful that people have found a lot of use for this book. So anyway, there’s a lot of concepts in there.

So I love to dive in on whatever you want to Sam.

Sam Gupta 8:07

We are super hungry for growth as millennials. Okay, so the next question, and we follow this ritual here, asked every guest that we get on the show. So what is your perspective on growth?

Brian Beck 8:29

Well, gosh, it’s the whole subject of the, what I wrote about it, growth, the digital has become the center of everything. And is the key to growing a business these days. And I talk about this not only from the standpoint of digital enablement for commerce because that’s important. But it’s also if you think about, particularly with COVID, the physical doors being locked, you’ve got to enable the sales team as well digitally.

So if you’re a B2B company, the mandate for digital as the driver for growth just got a lot louder. So when you think about the return on investment, the ROI, right from an investment in digital commerce and digital enablement, a lot of it is about meeting that need. It comes from places like incremental revenue from e-commerce, obtaining more share of wallets from existing customers, and capturing new markets by leveraging e-commerce.

Brian Beck 9:36

I’ve got several case studies in the book that talk about companies of all sizes ranging from smaller companies $10-20 million in revenue to multi-billion dollar enterprises. The companies that have captured more revenue and entered new markets using e-commerce, finding customers niches they’ve never had before. And in doing so, through reaching out in e-commerce, you know, being found, for example, in Google.

I have one case study in there of a distributor, for example, that almost doubled the size of its business leveraging e-commerce. Why? Because they’re getting new customers from Google searches that are finding them in more geographic markets, they historically never served. We’ve got another case study of a manufacturer that is achieving millions in new revenue by reaching beyond the OEMs. This company, in particular, makes metrics, measurement tools. They’ve always sold to Boeing and all these big OEMs. They’re reaching into new markets.

They started selling their products to bicycle shops because they had no idea that these people could use their products, but now they’re finding them on Google. And these are hard to find tools.

So it’s real growth, Sam. To get to your question growth is, is now is digitally enabled. And so whether that’s ecommerce or helping your sales team reach customers because they can’t get into C-Suite people due to COVID and other things. It’s drives growth for you. If you do it right, and that’s what I talk a lot about, how to do it right.

Sam Gupta 11:15

You mentioned that you had done 100 interviews with the executives, and you have tons of case studies. So the amount of insight that that book authors bring to the table is phenomenal. And it just so much learning for manufacturers and distributors.

So the next question I’m going to ask you is, and I find you guys to be predicting what will happen in the market. So from the macro perspective, what is your perspective on ecommerce? What is your perspective on how COVID is going to change the economy?

Brian Beck 12:00

Great question, Sam. I think you have that expectation now of e-commerce. And so look, there’s statistics around what COVID has done. Another most striking data I saw recently was from Forrester, which showed that the penetration of e-commerce in the United States went from 16, about 15-16%, right before COVID to over 30%. I think almost 35%.

Now, what I mean by that is the number of people using e-commerce B2C and B2B to buy products. So it’s doubled. So I think, number one, you’re seeing that customers are, are now reliant on e-commerce. The long-term implication of this is that people who were reticent to use e-commerce earlier, particularly referring to B2B buyers. A good example of this would be maybe your heating, ventilating air conditioning contractor or your electrical contractor, or people that maybe hadn’t used e-commerce in the past. They are now learning how to use e-commerce and find that it’s easier and more efficient for them to do their job in many cases.

Brian Beck 13:25

And once you show people that this is an easier path or and saves them time and, in some cases money, to use e-commerce, they’re not going back. They’re going to stick with e-commerce because look, at the end of the day, particularly in B2B, if you make the buyers’ job easier, they’re going to continue that behavior.

So I think the long-term impact number one is the fact that you’re going to see increased adoption, and it’s accelerated. We’ve seen ten years of acceleration in eight months in this B2B e-commerce field. So I think that’s one and then the other. The other big one is I think you’re going to see fewer people taking appointments and physical appointments, and that’s going to continue as well. So that means your sales force needs to continue to become digitally enabled the physical sales force.

I read a statistic, Sam, that said, at the end of 2021, we’re still going to have 30% of the workforce here in the US working remotely 30%. That means that’s 30%; you’re not going to go show up at someone’s house to sell them a product. You have to reach them digitally. So you know, it has implications for the physical Salesforce as well as the digital. So I think these are long-lasting implications.

Sam Gupta 14:47

Interesting. When I used to think about e-commerce, I always used to think, B2C just because it has the commerce word in it. But lately, when I’m interviewing my guest, and I don’t know if you know Curt Anderson. So we did an episode with him. And he is super bullish on B2B as well. In fact, nowadays, ecommerce folks are not even talking about B2C.

For me, when I think of e-commerce. I used to think that this is going to be my Shopify site where I am going to have a beautiful product. Maybe I’m going to have a cart where I can check it out. But you guys are talking about something different.

So why is B2B different from B2C as far as the e-commerce landscape goes? And why is everybody trying to push on that right now?

Brian Beck 15:37

Great questions. By the way, Curt is fantastic. He’s just super knowledgeable and amazing energy. So I’m glad to hear you’ve done some interviewing with him. So yeah, why is it different? Well, so you know, it’s a different customer. Ultimately, B2C e-commerce, which is the field I lived in for 17 years, is well-established, highly competitive, very evolved, and it’s still alive.

And well, in fact, the same kinds of things are happening there with COVID that are happening in B2B. However, the fact of the matter is that B2B e-commerce, in other words, businesses selling to a business, other businesses via digital commerce, is far behind where B2C is. Only 50% of B2B firms have e-commerce capabilities.

Brian Beck 16:31

So, I’d like to say it’s 10 to 15 years behind where B2C is, and what’s different about it that was the core question? Well, it is what’s different is that the B2B buyer number one has different goals and aims, and behaviors when they use B2B e-commerce.

The primary difference in their goal is, is it’s all about efficiency. They’re using e-commerce to get their job done, not go, shop and look, look for the next greatest look for my hairdo or my outfit or whatever. I worked in the fashion apparel space for a while, which was very much about immersion into an experience. It was about getting people to engage with a lifestyle brand and things like that. So when a consumer shops, it’s partially about efficiency, but it’s also about, you know, fun, enjoyment, and engagement in the experience of shopping.

With business-to-business e-commerce, it’s all about efficiency. You have got to get the customer to what they’re looking for quickly, give them the information they need, and allow them to check out quickly.

Brian Beck 17:37

And they also need to do things that are specific to how businesses buy. So the other key difference is not only the buyers’ intention and behavior. But it is also about the expectation and accommodating the traditional workflows they have in their business.

A good example would be that businesses often buy on credit terms. A manufacturer, for example, will extend credit terms to its distributors to buy from it, or a distributor might extend credit terms to that contractor or the medical office or whoever’s buying from them. That workflow needs to be accommodated in the e-commerce arena, which doesn’t exist in B2C in the same format. So buying on a purchase order, for example. The other big example is pricing. So in the world of B2B, many companies have contracts. They’ve negotiated pricing with their supplier, or when that supplier initiates e-commerce, they need to make sure that that pricing is reflected on the e-commerce website.

One of the key ways to kill off an e-commerce effort is if you don’t present the pricing the customer expects to see in the e-commerce effort. Guess what, don’t even bother starting. It’s not going to work. The customer needs their customized pricing through the e-commerce experience to make the purchase. So those are some of the nuances and a lot of differences, Sam, but those are some of the key areas of difference from B2C to B2B.

But, the fact of the matter is B2B e-commerce is two and a half times the size even today of B2C e-commerce. It’s enormous, and a lot of people don’t realize it.

Sam Gupta 19:18

Interesting perspective. And when we look at the B2B e-commerce term, and I am going 20 years back, to be honest. So B2B e-commerce is not new, but I think you guys are pointing to a slightly newer term here. So when I think of B2B commerce, I think of portals such as Ariba or Coupa, and I don’t know if you’re familiar with them. They used to be your supplier network enterprises used to work with them, and then they will use a bidding platform. You could have your marketplace inside the office. So how do you differentiate between B2B e-commerce versus B2B Commerce?

Brian Beck 19:58

Yeah, great question. So it’s an interesting and evolving world. So you’re talking about e-procurement, EDI, punch-outs, there’s a variety of approaches to, to traditional sort of electronic commerce. And it’s to your point it has and continues to evolve. There’s still a very significant role for those types of E-procurement systems. When we look at the world of e-commerce, it’s very closely aligned.

And I believe many of those electronic commerce formats and procurement platforms will continue to exist. In fact, they need to. In many cases, they need to integrate and plan and work with each other. So what I see happening, Sam, those traditional platforms remain a significant part of the volumes that are done between suppliers and buyers. In B2B, those are systems once they’re set up are, they can run efficiently.

Brian Beck 21:06

Often, the way companies will approach e-commerce is for a certain segment of their customer base, which particularly wants to use the e-commerce format. But at the same time, they’re using those procurement systems alongside them. So they’re not, it’s not a sort of rip and replace, it’s an addition to, in many cases, insert and in some cases, they’re integrating them, or allowing the e-commerce platform, in some cases, will integrate to and support some of those systems.

For example, suppose you’re familiar with a punch-out where a customer can order through their ERP system, leveraging their traditional purchasing past. In that case, some ecommerce platforms will enable you to support punch out and be integrated into that system so that they’re reducing some of the complexity of management. So I don’t view e-commerce as a replacement for those kinds of systems, but in fact, complementary to, and in many cases, will serve a different customer than the EDI customer or the E-procurement customer who’s buying from a supplier?

Sam Gupta 22:18

I’m going to rephrase my understanding of how I’m interpreting the e-commerce world the way you describe it. So, in my opinion, B2B ecommerce has a lot of different benefits. Because here you are trying to utilize the ROI from the Amazon Marketplace from the Google ads.

But in the case of your supplier and portals, I mean, you are basically going after your existing relationships. Yes, there could be some of the newer relationships as well, but you will not be able to generate business.

So am I accurate there in my understanding of B2B e-commerce versus B2B Commerce?

Brian Beck 22:54

That’s a great way to think about it, Sam. So you’re in a closed environment with EDI or E-procurement, as you’re describing them. And so you’re not exposing yourself, your product offerings, your company, your brand, etc., but through those sort of closed environments to reach new customers and to allow them to transact the way you’ve described it. That requires e-commerce that requires a website that people can go on to they can perhaps register or maybe not even need to register to buy from you via your e-commerce website.

And so yeah, it’s a way to reach into new customer segments that the case study I alluded to earlier, the company that is now selling to bike shops, they reach them through Google searches. And that other distributor I referred to, you know, their new customers are coming through Google searches on SEO. The same thing can happen with Amazon. If you have a well-functioning Amazon presence, people are searching on Amazon more than ever and increasingly B2B. So you’ve got another whole sort of platform there as well that allows you to reach new customers. So a lot of it is about exposing more of to exposing your product catalog and your brand to new customer segments.

Sam Gupta 24:15

And it’s kind of interesting how you put this because even Curt talks about the same thing. He is super bullish on the marketplaces. He’s super bullish on Amazon. And in fact, I’m going to connect this with the recent story that Facebook just bought the new CRM platform called Kustomer. So I guess they are probably trying to get some of that B2B revenue and the ad revenue as well because everybody’s trying to jump into this marketplace boom. So to me, these marketplaces are going to be the next Google, especially for B2B.

Brian Beck 24:49

I mean, it’s not even going to be Sam. They already are. So a couple of stats for you. If you look at Amazon and their division, called Amazon business. Amazon has become the number one place people go to search for products. And this is increasingly in B2B. Amazon is getting 70% of product search where, in other words, where the product search starts. So people kick open their browser, and they, five years ago, they would go to Google and type in a product name.

Well, that behavior has now shifted 70% of it to Amazon. And if you look at Amazon’s B2B business, it has become the fastest-growing part of Amazon. I’m talking about all of that, including Amazon Web Services that it surpassed earlier in 2020. In terms of growth rate, Amazon B2B transactions are projected to be the latest numbers I’ve seen, over $70 billion by 2023. That’s three years from now. That makes them seven times the size of Grainger, which is recognized as one of the largest distributors in the world. Amazon’s going to be seven times their current size.

Brian Beck 26:16

Okay. And guess what, it’s not all office products. Amazon is selling if you look at where they’re making progress; it’s in things like MRO, industrial products, medical dental. Last year, Amazon and the medical and dental space did over $2 billion in revenue. $2 billion, folks, and this is not just over-the-counter stuff, too. If you’re in the medical field, we’re talking about regulated type II, class II medical devices, which the FDA regulates. Amazon is putting in workflows to accommodate this. So, you know, Sam, why marketplaces? Why is Amazon? Why are these other folks, you know, why they are growing so quickly?

Well, frankly, it’s that the marketplaces do a better job than most companies do with e-commerce. They provide more products and an easy experience. Also, they do the things I’m talking about related to ease of purchase, removing friction, getting the customer in and out quickly. And they are meeting the need of that millennial buyer. I mentioned there already, you know, in the case of Amazon, those buyers are already using the platform for their personal consumption. They’re just shifting over to business. So look, this is, you know, a marketplace strategy. I always tell my clients this. You have to have a marketplace, particularly Amazon’s strategy, whether you’re a market, whether you’re a manufacturer or a distributor. The implications are different. But you know, having that strategy is critical. We spend our time helping folks, that Amazon strategy because it’s not easy. I mean, there are a lot of things you have to think about as you approach a marketplace.

Sam Gupta 27:58

I find this whole Amazon thing very interesting, especially when I hear in the news that you need to be careful of Amazon. The mom-and-pop shops are gone because Amazon is just too big and too powerful. But here, actually, the sense I’m getting is it’s the exact opposite story because Amazon is opening the door for you. You come here, hang out on my premises, and make money. So it’s exactly the opposite. Amazon is actually trying to help.

Brian Beck 28:27

I think Amazon would say, look, we enable business. We enable a lot of mom-and-pop businesses, and that’s very true. I talk to people all the time who have built very successful businesses on Amazon. Ultimately what we have to realize is that business and consumer business buyers and consumers, where they shop their preferences, you can’t control that. You as a business, you have to recognize how the world is changing around you and confront it. There’s this great book by Jim Collins, written almost 20 years ago, Good to Great. Maybe it was ten years ago. In Good to Great, he talks about confronting the reality of your situation, the best companies they confront and acknowledging the reality of what’s changing and how they understand their customer.

Brian Beck 29:22

If you look at Jeff Bezos, the founder of Amazon, and what he has preached for 25 years since he founded that company in 1994. He’s talked about the customer incessantly and focusing on the customer’s needs. And they do it. There are a million employees. It amazes me when I talk to them. I have hundreds of relationships at Amazon when I talk to these people. They’re all saying the same thing about the customer at that scale. It’s amazing what they’ve built.

And, to me, they continue to execute with the same strategy is a testament to where the businesses need to be these days. It needs to focus on the customer and recognize how that is changing and how the world is changing?

So to your question, Amazon is enabling a little guy, but it also causes all kinds of disruption if you’re not paying attention to your customer. So you’ve got mid-market distributors that are losing market share right now to Amazon. You got manufacturers losing market share to other manufacturers on Amazon because they’re paying attention, and they’re selling their products there. And some of these companies, guys, you’ve never heard of, these are manufacturers you don’t know exist, the whole competitive landscape is changing. Go on Amazon and search your product, and you will notice what I am talking about.

Sam Gupta 30:49

In any community, Brian, you need to be nice to the big guy. You can’t mess with the big guy, as simple as that. Otherwise, they won’t let you hang out in their promises. Right. So as long as you’re nice with the big guy, you are good?

Brian Beck 31:03

I think it’s nice. And I think it’s smart, right? You have to have a strategy. You have to be smart about how you work with Amazon. And you have to be smart about it because there are many things you don’t control there. Even as a large manufacturer or distributor, there’s not much influence you have even if you have influence in your traditional relationships; it’s a different animal. It’s a different way of doing business.

So you have to be smart and informed and have people by your side that knows how to work through these things. So anyway, to your question, yes it would be nice. But I think the most important thing is understanding what’s changing, understanding where your customers are going, and then having a smart strategy around all of it.

Sam Gupta 31:48

Okay, Brian, so we are running out of time. And I know that you wanted to cover the platform, as well, the rollout for B2B, the selection process. I don’t know how much you can cover. Do you want to touch on that briefly?

Brian Beck 32:01

Yeah, happy to. That was an area, Sam. You wanted to cover off a bit. And I think you know that I have a whole chapter in the book. Chapter nine is all about platform selection and how to go about that. So I think there are two things I’ll touch on there. One is that it’s important to make sure you take your time when you go through this process. I find companies too often go with the first one or two platforms they talked to because the sales pitch sounds great.

Make sure you take your time and do a careful selection process, which involves customer input. It involves inputs from other folks in your business, your sales team, your marketing, finance, fulfillment, etc. And you want to make sure you do that step up front, and it might take you 4-5-6 months to do that, right. But you want to choose a platform that you can live with for a long time.

Brian Beck 33:03

And by platform, what I mean is software, right? So I think the first thing is making sure that you’re taking your time with it. And then make sure you get good partners alongside you.

Now, the good news is, in all this, is that the whole landscape has evolved rather considerably over the last even five years. So there’s a lot of options available to you in the platform marketplace, which is good news. And it’s also bad news. Because you’re going to have to decide between them a lot of options, it can make the decision more difficult but brought down the cost of ownership to get into and launch an e-commerce platform for your business. So, I think there are many nuances, and there are many options in the market. And there’s a lot of details to an effective process.

But I would advise that my number one piece of advice in terms of establishing the right technology foundation is to take your time with it upfront. You will thank me or your people or whatever later if you do that because you won’t have to rip and replace it in two years, which is never fun.

Sam Gupta 34:10

So in closing, there are two things I want you to cover. Number one the advice for a CEO of a B2B firm. And the next thing I want you to cover is you are a super humble guy. You have not even mentioned the name of your business as far as I remember. So, can you tell us a bit about your business?

Brian Beck 34:32

Sure. I can. Yeah, Sam, I believe in sharing value with folks and, as a first and foremost, not just shamelessly self-promoting. So yeah, so I’ll touch on my business a little bit, and then I’ll offer some advice as in closing.

So obviously, I sell books. I’m an author. The book’s name is Billion-dollar B2B E-commerce. If you put a .com at the end of that, you’ll get to the book, my book website, and you can read about the book and contents and also buy it. It’s available on Amazon. So that’s one aspect of what I do.

The other is I own a company called Enceiba. I’m a managing partner. I have some partners in the business. Our business is helping B2B manufacturers and some distributors understand their Amazon business opportunity, the right approach to Amazon in terms of strategy, and then executing on that. So we have a team of folks based here. We’re all here in the US, helping them execute the content, the marketing, the advertising, the strategy, the fulfillment, etc., for Amazon and Amazon business. We’re the only firm in the marketplace that focuses on the B2B aspects of Amazon. And so that’s the firm and again, Enceiba.com. So and my email, by the way, if you want to email me, is Brian@enceiba.com.

Brian Beck 36:02

Now, Sam, to close this up, one piece of advice. Thanks for that question. I talked about this in the book, right at the beginning of it, and it’s really about, and I have a case study on it one piece of advice is take action. And this is directed right at the leaders, right at the CEO, at the C-suite, the VPs. And the boards and the business owners.

You don’t have perfect information in this field. I’ve learned in 20 years that in e-commerce, things change all the time. You have to take action and succeed without perfect information. The tendency for b2b companies is to wait until everything is perfect before you take action tends to be very conservative. That’s fine and served you well for 100 years in business, however long you’ve been in business, but ultimately taking action is the key. And, in the absence of perfect information and gets people alongside you, that can help you think through this. And move.

So The first case study I have in the book is a company called Petra industries. There, I think about a 30 or 40-year-old distributor. Back about 15 years ago, the CEO said, Gosh, I don’t know what’s happening with this e-commerce thing, but I need to invest in it. And he took action. He didn’t understand everything about it. But he learned along the way. He got people on his side alongside him. And today, they’re a digitally evolved business; they get a lot of the revenue, I believe more than half of it from me from e-commerce channels. They’re doing well in this pandemic situation because they’ve invested because he made those investments and continued to evolve the business over the last 15 years. They’ve succeeded and captured new customers and customers and increased their share of wallet from existing customers.

So my advice is to act. And do so without even the fear of not knowing exactly what you’re getting into. And get people alongside you that can help.

Sam Gupta 38:05

Yeah, the advice cannot be more real than this. So definitely take action and act. And on that note, Brian, I thank you so much for your time and insight. It’s been super fun. Awesome.

Brian Beck 38:15

This has been really great. I really appreciate the opportunity to be with you.

Sam Gupta 38:20

I cannot thank our guests enough for coming to the show and sharing their knowledge and journey. I always pick up learnings from our guests, and hopefully, you’ll learn something today. If you want to learn more about Brian or Enceiba, please visit enceiba.com or his book website, billiondollarb2becommerce.com. You can also email him at Brian@enceiba.com. Links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business. You might want to check other related episodes, including the interview with Curt Anderson from B2BTail, who touches on what custom manufacturers need to know about starting their ecommerce journey. Also, the interview with Chase Clymer from Electric Eye, who brings a unique perspective on DTC from the angle of ecommerce toolset and Shopify.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform or DM me on any social channels. I’ll try my best to respond personally and make sure you get hope.

Thank you, and I hope to get you on the next episode of the WBS podcast.

Outro 39:40

Thank you for listening to another episode of The WBS podcast. Be sure to subscribe on your favorite podcasting platform, so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Chris Luecke from Manufacturing Happy Hour, who discusses several case studies where he has been involved in improving the manufacturing processes and making the plants smarter. He also touches on the basics and key advantages of smart manufacturing. Finally, he discusses the core challenges SMB companies face in growing their businesses.

Chapter Markers

• [0:00] Intro
• [3:02] Personal journey and current focus
• [4:05] Perspective on growth
• [5:04] Importance on communication and soft skills
• [6:19] Important skills for a podcaster
• [7:15] Manufacturing subject matter expertise in manufacturing marketing
• [9:25] How to convert from marketing expense to marketing investment?
• [12:24] Growth challenges for SMB manufacturers
• [18:56] Importance of standard operating procedures for SMBs
• [21:11] Smart manufacturing across different verticals
• [23:00] How to enable smart manufacturing at a facility?
• [29:28] Smart manufacturing trends
• [34:44] Closing thoughts
• [37:22] Outro

Key Takeaways

• When you have the manufacturing background, in addition to some marketing skills, that’s when you’re really able to communicate in a way that’s going to resonate with the person on the shop floor.
• When we talk about industry 4.0, digital transformation, smart manufacturing, we really focus on the big bang technologies like augmented reality and virtual reality. But really, we need to focus on the challenge first, and then we can talk about how augmented reality or something like that impacts that.
• Whether you are a contract manufacturer or the Med Device manufacturer, you need to first reflect on who I am selling to? Who is my ideal buyer persona, for example, and figure out the most common questions and most common challenges that person has?
• Whether I’m talking about cybersecurity, whether I’m talking about asset management, whether I’m talking about connecting devices, whether I’m talking about smart manufacturing, it really comes down to making sure you have the right people in place and then the right processes to take things on as well.

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About Chris

Chris Luecke is a Podcaster, Marketer, and self-proclaimed “Media Maverick” in the manufacturing industry. As the host of the podcast and video series Manufacturing Happy Hour, Chris interviews leaders in the industrial sector to simplify and explore the latest trends and technologies impacting modern manufacturers. Chris recently left his sales job of 11 years with Rockwell Automation to pursue podcasting and marketing full-time. He now helps manufacturers and other industrial companies create lead-generating digital content and build dedicated customer communities.

Resources

• Thanks for listening! If you’re a manufacturing leader or if you’re involved in the industry in some way, make sure to subscribe to Manufacturing Happy Hour on your podcast player-of-choice. You can subscribe and check out all episodes of Manufacturing Happy Hour at ManufacturingHappyHour.com.
• While you’re at it, don’t forget to join the Manufacturing Happy Hour Industry Community on LinkedIn. With over 300 members and monthly virtual happy hours, it is THE place for industrial innovators and go-getters to collaborate, share ideas, and make new connections.
• Connect with Chris
  • Website | LinkedIn | Twitter | Facebook | Instagram
• Connect with Manufacturing Happy Hour
  • Website | LinkedIn | Twitter | YouTube | Instagram

Full Transcript

Chris Luecke  0:00 

They get hit by a truck the next day how someone going to pick up the slack for them. It’s probably going to take the next person that takes over twice as long, four times as long, 10 times as long whatever it might be to get that done. I mean, that’s the danger that someone’s in when they’re relying on tribal knowledge.

Intro  0:17 

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes and technologies. So, if you’re a business owner, operations or finance leader looking to learn grow strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS Podcast, where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta  0:54 

Hey everyone, welcome back to another episode of the WBS podcast. I’m Sam Gupta, your host, and principal consultant. At digital transformation consulting firm, ElevatIQ.

Growing companies are obsessively efficient with their smart business processes. When it comes to making a manufacturing plant smart, there are limitless options available. Whether you talk about making your existing machines smart or upgrading your old machines, the smarter your plant is, the more efficient are likely to be your manufacturing processes, and the more cost-effective will be your operations.

In today’s episode, we have a guest Chris Luecke from manufacturing happy hour, who discusses several case studies where he has been involved in improving the manufacturing processes and making the plant smarter. He also touches on the basics and key advantages of smart manufacturing. Finally, he discusses the core challenges SMB companies face in growing their businesses.

Let me introduce Chris to you.

Chris Luecke is a podcaster marketer and self-proclaimed media Maverick in the manufacturing industry. As the host of the podcast and video series, manufacturing happy hour, Chris interviews leaders in the industrial sector to simplify and explore the latest trends and technologies impacting modern manufacturers. Chris recently left his sales job of 11 years, with Rockwell Automation to pursue podcasting and marketing full time. He now helps manufacturers and other industrial companies create lead gen campaigns, digital content, and build dedicated customer communities.

With that, let’s get to the conversation.

Hey, Chris, welcome to the show.

Chris Luecke  2:41 

Good to be here, Sam. Thanks for having me.

Sam Gupta  2:43 

I’m super excited to talk to you, Chris. I love your background because you have had so much experience in the manufacturing space. And obviously, our target audience is ops and finance. So, it’s always good to have that insight in terms of the work that you have done.

Chris Luecke  2:57 

Absolutely, yeah, excited to talk to your crew today. The folks that listen to your show.

Sam Gupta  3:02 

Okay, so before we get started, do you want to talk a little bit about your background and journey and what you are focusing on these days?

Chris Luecke  3:08 

Sure, I’ll quickly introduce myself. So, my name is Chris Luecke. I am an industrial podcaster, for lack of a better word spent most of my career in sales and marketing for the past 11 years with Rockwell Automation. I’m a degreed engineer, and I recently took the leap to really focus on podcasting and start my own business. Helping manufacturers create content that converts into new leads new customers, and really helps them turn their marketing expenses into marketing investments that yield new business.

So that’s what I’m up to. My main show is called manufacturing happy hour. That’s what I’ve been focused on for the past four years. And it’s been a great opportunity to learn about industry 4.0 digital transformation, and really a lot of the challenges that manufacturers face on a regular basis and the type of solutions, the people, and the technologies that are out there to help solve those problems.

Sam Gupta  4:05 

Great, thanks for sharing that. Now, I like to ask one more question pretty much with every single guest that I have. And that is going to be really the focus of our podcast, which is growth. So, what is your perspective on growth?

Chris Luecke  4:17 

So, when I hear the word growth, I mean, obviously, as a salesperson, I think of top-line revenue and sales growth. But before we even get into that, I think about personal growth as well. And career growth. You know, I think in order, you know, and this is, again, coming from the perspective of someone that’s been in this business for about 11 years, primarily from a sales and marketing standpoint.

You know, I really think the way the more skills you’re able to develop, the more you’re able to figure out what you’re good at self-awareness, that’s going to help you with whatever your role is within a company, whether that’s in finance, whether that’s an operation, whether that’s in sales and marketing, once you’re able to hone those skills and build those as you grow personally. You’re going to be able to do more things that help your company grow financially.

Sam Gupta  5:04 

So, what are some of the common skills that you see that everybody needs to have common skills that everyone needs to have?

Chris Luecke  5:10 

Well, it’s hard to pinpoint, because every role is a little different. But I will say, and this was I was just doing a podcast interview last night, and my guest was reflecting on her experiences doing business abroad. And she’s like, you know, one of the things that really taught me was how to listen. And at the end of the day, whether you’re in the C-suite, whether you’re on the plant floor, whether you’re in finance, operations, etc., you’re going to need to know how to listen, because I think we all have an idea of how to share our ideas.

We all know how to talk. I’m a salesperson, you know, I think one of our one of our flaws is sometimes we do talk too much, but really listening and really empathizing with the person that you’re working with. That’s one thing that I think goes a long way, regardless of your role within an organization.

Sam Gupta  6:01 

Yeah, I cannot agree more there. I think listening is way harder than talking to be honest. It’s so hard.

Chris Luecke  6:10 

I mean, there’s, there’s not only what you hear. There’s also body language that goes with it. There’s a lot that needs to be paid attention to.

Sam Gupta  6:19 

Totally right.

I know. And you have been doing the podcasting for a while, and you don’t really have the body language here with podcasting. So how can you make sure you’re still listening to the person on the other side?

Chris Luecke  6:31 

Yeah, I think part of it comes into it, is having a plan for your podcast, having some like when I go to an interview, I kind of know some of the directions that I want the interview to go, you know, I do my research on my guest, I see what their experiences are.

But at the same time, you don’t want to be overly prepared that you miss an opportunity. If a guest brings up something really insightful, or a story that you weren’t aware of, you want to be able to dig into that you want to be able to hear them versus just being like, okay, thank you for answering my question. On to the next question. You want to be able to veer from your planned path if it’s going to add value. And a lot of that comes from being able to listen to your guest and what they’re saying.

Sam Gupta  7:15 

Seriously, I mean, I cannot agree more. Nobody wants to talk to a robot. So, you are so right there. Now, I’m actually going to move to the next question related to your comment about the degreed engineer. So, tell me I mean, you are doing obviously sales and marketing, and you have a very deep background in terms of having this engineering degree. And then you did a lot of manufacturing fields.

So obviously, you have very deep expertise in manufacturing. Why is it important to have the manufacturing expertise for sales and marketing when you are selling to a manufacturer?

Chris Luecke  7:50 

Sam, that is a fantastic question. I think what it comes down to is really being able to relate to and empathize with your you know, your customer’s audience, at the end of the day, you know, when I work with people that are trying to reach a particular customer audience, whether that’s an end-user, whether that’s an equipment manufacturer, you know, located in X region of the country, we really, you know, what’s important to know is what does that engineer at the end of the table go through on a regular basis, what are the challenges they face every day when they step out on the shop floor, for example. And, I’m talking about speaking to a technical audience right now.

Chris Luecke  8:34 

But I think, when you have that manufacturing background, in addition to some marketing skills, marketing savvy, that’s when you’re really able to communicate in a way that’s going to resonate with the person at the other end of the table. You know, for example, like, I know how technical a guy on the shop floor is going to want to speak and engineer on the shop floor is going to want to speak.

At the same time, I want to make sure when I present an idea, it’s in an approachable fashion where it’s not overly over the top overly technical, you want it to be something that they’re going to get the idea pretty quickly. So, it’s being able to balance you know, some of those hallmarks of communication, communicating in threes, three bullets, whatever that is, but also being able to speak the language and, you know, empathize with the challenges that someone is experiencing, that has to use these technologies on a regular basis.

Sam Gupta  9:25 

Yep, could not agree more with respect to having that that subtle depth that is required in a stream, but at the same time, it needs to be high level as well.

So now I’m actually going to move to the next topic that you mentioned, which is going to be converting from marketing expense to marketing investment. So, tell me your perspective of what is marketing expense, the people who don’t know what an expense is, what is more than investment as far as marketing is concerned, can you touch more on that?

Chris Luecke  9:54 

Sure. And this is really from my perspective, as a sales guy. You know, my marketing Experience is limited to me being in sales. And I don’t think that’s a bad thing. Because the reality is when I’m thinking of marketing, I’m thinking of Okay, what’s going to what, how is this piece of content? Or how is this tradeshow we’re participating in? How is that going to turn into a lead that could turn into an opportunity that could turn into new business?

So what I mean by marketing expense and marketing investment, I’m glad you asked this question is, I think, for many, many years, even now, especially as we’re doing virtual trade shows, a number of companies look at, you know, investing in, let’s say, a booth at a trade show, for example, this is an easy one as something they just have to do, you know, to maintain their brand to show face at whatever the big industry trade show they’re participating in, they’re looking at it just as an expense they have to spend, they’re not always thinking in terms of Okay, how is this going to translate into a new customer? You know, yes, there’s the lead collection that takes place at these events.

Chris Luecke  10:56 

But when it comes to, let’s say, something like social media or content, I don’t necessarily see people thinking of it’s like, hey, what is what, you know, how are we going to get this to turn into a customer? I think part of that starts with one getting the content, right making, it’s making sure it’s something that when someone is scrolling LinkedIn, for example, when they see a 45 second video, is it something that’s going to get someone to stop scrolling to be like, wait, I need to listen to this, because I’m having challenges, you know, recruiting the next generation within my business, for example, or I’m having challenges addressing the skills gap, you want to make sure you’re putting content out there that addresses challenges in the way, you know, the challenges that your company is able to help other companies solve.

So, you know, Rockwell Automation is an example I worked there for 11 years, they help companies connect their enterprise, they help companies get data that allows them to make better manufacturing decisions that impact the bottom line. So, the reality is, people need to be thinking about when I’m creating this content when I’m investing to be at this trade show. Is this really an investment?

Or is this just something I’m paying for because it’s something I’ve always done? So that’s where I think people really need to be shifting that mindset of, hey, let’s not just make these expenses, marketing is actually going to be an investment that drives our business forward.

Sam Gupta  12:24 

Okay. That’s a great perspective. I love that insight. Now, Chris, since you have worked with so many different SMB customers, especially in the manufacturing space, I would like to hear your perspective about overall, you know, manufacturing landscape, if you’re thinking from the growth perspective, obviously, you know, sales and marketing is great.

Those are the problems that are always going to be there. But from your perspective, let’s say if we look at the landscape of small to medium-sized businesses, 90% of them, it’s very hard for them to grow. So, what are some of the core challenges that they are facing at this point in time to cross that chasm, core challenges for small, medium-sized businesses to grow?

Chris Luecke  13:05 

Well, it’s interesting that you bring this up because as I was preparing for this conversation, I was really thinking about some of the things that I’ve done with Rockwell Automation, as well as some of the lessons that I’ve learned from my podcast.

And, you know, I’ll start with, with my experience at Rockwell, you know, I was when I left, I was basically calling on equipment manufacturers in the greater Bay Area, and the challenges that I saw them coming across, we’re reaching more customers, a lot of times, you know, small to medium, a large company like Rockwell, for example, has a brand name people know about them. People know how to find Rockwell, that’s not always the case, with a small to medium-sized business, that findability is one of the first things they need to solve. Not just findability, but their differentiation as well.

Chris Luecke  13:59 

So, you know, we talk a lot about digital transformation, industry 4.0 on my podcasts, and, you know, a challenge that I saw as an equipment manufacturer, a small to medium-sized business, like one of them was, how do we add something to our machine that allows us to upsell add value versus, you know, having to cut our price to compete with the people that we’re up against.

And, as a Rockwell account representative, those things could be anything like cloud-based analytics solutions, you’re going to be able to help your end customer get information quicker, or something like connected sensors, smart sensors, things that allow you to pull more data that again, allow an end-user to make decisions quicker.

So, you know, from a Rockwell perspective, working with equipment manufacturers that I’d say qualifies small and medium-sized businesses, finding ways to add value add features that would allow them to impact their top line in their state.

Chris Luecke  15:00 

And in turn, win more business. That was one of the core challenges I was seeing. But overall, when I think of, you know, I know I’m going down a smart manufacturing path here, you know, I think of smart manufacturing, as what are the technologies that really help solve the biggest problems that most manufacturers, especially small to medium-sized ones are facing, you know, baby boomers are retiring, there’s going to be a generation gap. There’s also a skills gap, there aren’t as many people to address some of these critical trades for advanced manufacturing roles.

And then, you know, being able to procure large equipment, those are, you know, these are things that I’ve come across on the podcast before that, you know, as a smaller, medium-sized business might not have the same capital dollars as a large organization. I see that as a potential challenge as well. So, plenty of stories I could go into around these. But, you know, I’ll go back to my first answer of helping companies differentiate themselves, so that way they’re selling on value versus trying to cut their costs.

Sam Gupta  15:59 

Yeah, so definitely, we want to touch you know, more on the stories, I think that’s what is going to help our audience visualize the automation initiatives that you have taken or digital transformation initiatives that they have taken. And that has had a real impact on the growth and the P&L.

So, do you have any specific story that you may want to talk about? So, let’s start with where they were before you got introduced to an account? Okay, what you did? And what was the impact after doing whatever you did?

Chris Luecke  16:34 

Yeah, you know, one, one thing that and this is kind of a tertiary story in some regards, but I’ll talk to an industry that I served out in the Bay Area, and one of the cooler solutions that that one of my peers had come across in the space.

So, I mentioned that with smart manufacturing and, and baby boomers retiring, your critical thing is getting the next generation or the new people stepping on the shop floor, getting them trained. The reality is training takes a lot of time. And it takes a lot of dollars. And I think a lot of times when we talk about industry 4.0 digital transformation, smart manufacturing, we really focus on the big bang technologies like oh, augmented reality, virtual reality, that’s cool. But really, we need to focus on the challenge first, and then we can talk about how augmented reality or something like that impacts that. So, I’ll give an example.

Chris Luecke  17:25 

And this is a case study that your audience can search for it’s out there, large semiconductor company called Global Foundries, they were looking for a way to better train their employees cut down on their training time, you know like I said, the older generation is starting to retire, there’s a solution out there called de forea. Expert capture that not a Rockwell solution, per se, but our partners at PTC, they do that it’s an augmented reality solution for standard operating procedures, essentially, it shows people that are on the factory floor, assembling equipment, or going through some process exactly how to do what they do.

The reality is the results, I think this cut down on their amount of standard operating procedures they had or the amount of time it took them to create a standard operating procedure by like 10x, and it cut training time in half as well.

Chris Luecke  18:16 

And, you know, for the CFO audience out there that’s listening to this, you can apply the dollars that that makes, you know, to your particular business, whether that’s a small or large business at the end of the day, you know, that’s where I really think the beauty of industry 4.0. And these new technologies come into play.

Because this is where augmented reality, you know, has been able to see what you’re doing. When you’re putting a widget together, for example, being able to see that and then translating that into a tool that you can replicate that process over and over. That’s where augmented reality becomes cool. So, a quick example from the industry that I served. Hopefully, that helps add some perspective to that.

Sam Gupta  18:56 

Okay, amazing. So, since you mentioned the word standard operating procedure, and that should be very common in the manufacturing sector. But when we work with a lot of small manufacturers, they don’t even have a defined process. Okay, they don’t have their documented BOMs that they use for their manufacturing.

Okay, so if you are, let’s say, working with this kind of manufacturer, who does not have the defined procedures. So, what would be your advice for them from your perspective? And what do you think they are missing by not having the standard operating procedure?

Chris Luecke  19:34 

In terms of what they’re missing, I mean, some of these are major things like you’re it’s, we call it the Guinness truck scenario, like if Joe or Sally that works on this equipment all the time, if they get hit by again his truck The next day, how someone going to pick up the slack for them, it’s probably going to take the next person that takes over twice as long, four times as long, 10 times as long, whatever it might be to get that done. That’s the danger that someone in when they’re relying on tribal knowledge without any documentation. That’s, you know, for what I would say, you know, look to see if you can invest in a technology solution like that.

Chris Luecke  20:13 

And just based on, like the example I just gave, figure out what the ROI of that technology solution might be, if it can help with standard operating procedures, at the bare minimum, start capturing those in some sort of, I don’t want to say Excel file per se, because that’s just as difficult to, to keep track of, but something that can be put into that, assuming that company has a business system, you need to, I would say the business, what the business needs to do is figure out where they are, do you have some sort of overall software within your company where you can log this type of information?

If not, can you at least write it down to get that procedure in place? Do you have the money to invest in that? And is there good ROI on that, those are the steps I’d take, the company needs to be self-aware of if they have those systems, but at the very least start writing it down? So that way, when you do implement something more robust, you have something to go off of versus just starting from tribal knowledge. When that day comes. Okay, amazing.

Sam Gupta  21:11 

Let’s talk about some of the manufacturing verticals. So, you know, from your perspective, do you believe that when you go from one vertical to the next, let’s say, we are going from the machinery to custom manufacturer or the contract manufacturer, or it could be Medical Device? Does the approach differ across these verticals?

Chris Luecke  21:38 

I think the content and the challenges are going to differ a little bit, but the reality is the process of coming up with that is going to be the same, you know, whether you are a contract manufacturer, or whether you’re the Med Device manufacturer, you need to first reflect on, who am I selling to? Who is my ideal buyer persona, for example, and figure out what are the most common questions and most common challenges that person has this is, in many ways, this is marketing 101, in a lot of ways?

And then from there, you work back to, you know, figuring out what, what type of, you know, how do we get the right messages in front of them? I think you, you know, for example, you and I, before this interview, we were chatting about, you know, pay-per-click and campaigns and things along those lines, I think there is a gap where people know some of these marketing tactics, but they often jump to those before making sure they get the content, right, that can actually reach and resonate with the people they’re trying to get out to.

So, to answer your question is as quickly as possible, the basic principles remain the same figure out who you’re selling to, and who their challenges are, what they are, what their challenges are, what their questions are. But depending on the industry, those challenges, those questions are going to be unique to that industry, but the process you need to follow is the same.

Sam Gupta  23:00 

Okay, and since you are talking a lot about smart manufacturing, and I want to dig deeper into that, yeah. Okay. So, let’s say if you work with a customer, that wasn’t so smart, so tell me how that was? Why they were not smart. What was the state of the site? So, let’s say if I’m walking down the site, how did the site appear? You know, just by looking at the machines just by looking at the process. So, help me visualize that, in them, what changes you made? And how that turned into a Smart factory or a smart site?

Chris Luecke  23:36 

So good, big, big question. I can answer this from what’s the more from the machine builder standpoint since it’s been a long time since I’ve been working with the factories themselves? But you know, I think, and I guess that the other thing I’d say is, I would never say someone’s factory is not smart, or they’re not smart, I’d make sure to be more gentle within the conversation.

It comes back to people processes and technologies. But I mean, those are the basics that whether I’m talking about cybersecurity, whether I’m talking about asset management, whether I’m talking about connecting devices, it really comes down to making sure you have the right people in place and then the right processes to take things on as well. You know, when I’ve worked all answered this kind of from the sales guy perspective a little bit you know when I’ve worked with folks before from, you know, developing a strategy that would help an equipment manufacturer sell more equipment, I kind of look to see it’s like, what are you doing to market to reach your audience and things like that, you know, I start with who are the people that can help get that message out there.

Chris Luecke  25:01 

So same thing goes on the factory floor, if I’m walking a plant floor, or if I’m doing a cybersecurity assessment, for example, I’m looking to make sure you have people that are assigned to the right tasks like patching, like security management things along those lines, you know, once you have the people in place, you get them to put the right processes, and then you can start implementing the right technology.

So, I’m taking a bit of an alternative answer to what you’re asking. But, you know, when I think of walking a plant floor, seeing something that’s not right, that could be improved. Before I even tried to diagnose a technology that could help solve that problem. I want to know what the people and processes are behind that to make sure that’s addressed first, because otherwise, you know, I can I, you know, speaking from a Rockwell standpoint, I could sell a controller, I could sell a drive, I could sell a panel, I could sell an information solution product. But if you don’t have the right people behind it to really enable that, then you know that that’s an investment that, as I said, might not be the investment or the ROI that you’re looking for.

Chris Luecke  26:34 

I think in the brewing industry, the brewing industry is a great one, when you think about automating that one, like automating the recipes, when, you know getting the making sure the temperatures are right when to add the right stuff. Like that’s, that’s an industry where especially craft brewing, you know, you’re bootstrapping a lot of those companies, for example, and I’m going to the brewery, I’m looking to see where I’m like, hey, you know, are you thinking of putting in a solution that really the easiest way to phrase it, it’s like it can help you make sure in like a whole batch of beer does not go bad, because you don’t want it to, you know, boil at the wrong temperature, ferment for too long at the wrong temperature that can cause off-flavors.

So, you know, a recipe management solution is something I’m going to be recommending there. It’s more going to be a consultative approach along the lines of, hey, have you thought about putting in some sort of automation that swaps out those paper records? And has those automatically logged in the system for you, and then starting the conversation from there, I think that’s where I go with that, Sam.

Sam Gupta  27:43 

Okay, and I’m not sure if I’m touching the sensitive topic here or the confidential because I can see a lot of posts from you on social media, like related to a craft brewery and brew beer, your target market next target market from your marketing agency perspective.

Chris Luecke  27:57 

I will say the credit to the craft brewing industry, I’m glad it falls into the manufacturing category because I personally love beer. I’ve enjoyed working with them before I actually have a second podcast called PubCast worldwide, where we just talk about the beer industry.

So, no doubt they are certainly someone I’d love to have as one of my clients. And you know, it’s, it’s a space I understand. I didn’t mention this. But before my time at Rockwell, I worked for Anheuser Busch, I was on their canning side of the business. But you know, when you’re part of that, when you’re part of that family, for lack of a better word, you certainly see the brewing industry so it’s an industry I find a lot of fun. I love the people that work in that space. So no, this isn’t given anything away at all. For someone that has a podcast called manufacturing happy hour, it would be a crime if that person did not put some craft brewing industry.

Sam Gupta  28:49 

Oh, my goodness, you have a tough choice to make there. You have to choose between a smart machine versus a craft brewery, which one is going to be your choice?

Chris Luecke  28:58 

I would probably say let’s put a smart machine in the craft brewery that’s probably you know, these, these brewhouses have a lot more intelligence than they used to. So, I just tried to meet in the middle right there.

Sam Gupta  29:10 

That’s a great idea, but it’s probably going to be screwed-up marketing. Because of the mixed marketing message.

Chris Luecke  29:17 

Maybe well, I’m willing to make you know, with any new venture mistakes need to be made. I’m willing to make some mistakes as I go through that. So, well. We’ll see what happens.

Sam Gupta  29:28 

Okay, so tell me some more stories. I think you wanted to share some horror stories. And I don’t know if we were able to cover all of those stories. So, do you have any that you wanted to discuss in this episode?

Chris Luecke  29:38 

Yeah, I do. So, I’ve got a couple more that all go out there just to talk about smart manufacturing from a couple of other standpoints. Because going back to my point, let’s think about smart manufacturing as a new tool. We have to address the biggest challenges in manufacturing. Let’s think about what the problem is first, and then let’s look at how these tools are able to solve it. And, you know, the cool thing is we’ve talked a lot about my Rockwell experience so far, but I encounter a lot of cool solutions by being a podcaster.

As well, I think that’s been one of the advantages. It’s just being able to hear what other people are up to. You know, for example, one of the coolest episodes I did in the past year was with an app called variable speed VRYAB, a very good company. So variable, they, they build themselves, I hope I get this, right, it’s like the Uber for the factory floor.

You know, we’re talking about the bottom line, top line, and CFOs here, you know, this is a solution where, you know, imagine like the same way you call an Uber, you click a button, you’re like, hey, I need a ride to get me here and get me at this place at this time. Let’s say you run a warehouse, or you run a manufacturing facility, and your production is up, it’s a holiday season, right now, when we’re recording this interview.

Chris Luecke  30:54 

So, you know, people have production ramped up for certain things to get more product out the door, you know, if you want, if you have, like, let’s say, a variable operation like that, where you need to hire folks, for peak seasons, this is an app where you can go into, you can say, hey, I need an operator, I need a tradesman.

With these skills, you can, and can search for someone in that area that you can hire on an as-needed basis. And you know, again, think of it as Uber, this is as much of an advantage for an operation that needs to pull on some temporary work as it is for the person looking for temporary work, you know, the way my guest described it, he was interviewing a mother of four that you know, I’m sure ours are kind of, you know, they’re, they can’t be consistent, she used to take care of her family.

But using this app, she’s able to get the right gigs at the right time. So, you know, I love talking to solutions like that, like an app that’s been created the same, you know, the same way that we use for something in our daily lives, how it applies to addressing a critical manufacturing issue, like filling the skills gap.

Chris Luecke  31:55 

And then, you know, just one other example, before I hand it back to you, you know, as I’ve made the jump from being full time with Rockwell to serving other companies, one of the first groups I’m working with is a company called SteamChain, and also again, a guest on my podcast from a year ago, where they’re really changing up the way people procure capital equipment, you know, we think about the procurement model, where you pay a large sum of money for a piece of equipment, and then the end-user owns that equipment outright.

But, you know, the equipment manufacturer that sold the equipment they’re on in the next job, you know, the reality is there are ways like to sell this equipment as what SteamChain calls machine-as-a-service.

Chris Luecke  32:37 

Think of it like others as the service industry, as the office printer space, no one really buys a Xerox printer anymore, they have it in their office, they’re paying for its usage. The same thing can go for a piece of factory equipment, it requires a bit of a mental paradigm shift.

But man, if I’m a CFO, or I’m an operation, and I’m thinking of Wow, how can especially if I’m a small to medium-sized business that needs to buy capital equipment, I probably don’t have the same capital dollars that someone like a Craft, or 3M has, like this is a way that you can pay for equipment based on performance and usage, instead of having to incur that CapEx dollars.

What this does, you know, I find it to be a cool solution because then it enhances that ongoing relationship between the OEM and the end-user, the OEM is now incentivized to stay in touch with that customer, help them get throughput because they get paid on the performance of that equipment, you know, and the end-user, now they’re able to acquire that piece of capital equipment without having to pay the upfront dollars.

So, the reality is just seeing how smart manufacturing smart industry 4.0 solutions are really, you know, improving collaboration, impacting bottom lines impacting top lines, and just making life easier, and more productive for all the parties involved. That’s something that I’ve found pretty cool.

Sam Gupta  33:57 

Well, because I’m gonna have to admit here, this is, this has been one of the coolest conversations that I have had in my podcast. So, thank you for that. And when I look at this episode, overall, I would say, you know, I definitely appreciate that in anyone, especially marketers, when they can talk manufacturing when they talk engineering. So, I’m super excited to see you making that step and doing the marketing agency that step that you are going to take. So, I’m super, super pumped, and excited about that.

Chris Luecke  34:29 

This has been a fun conversation. It’s been cool to spitball and some of the favorite solutions I’ve seen in the manufacturing space, whether it’s through Rockwell or through my time as a podcaster.

Sam Gupta  34:41 

Okay, amazing. Do you have any last-minute closing thoughts?

Chris Luecke  34:44 

The only thing I’d say is, you know, for way too many people to connect with me. I’m super active on LinkedIn. You know, in addition to Manufacturing Happy Hour being a podcast that I’d encourage people to subscribe to on their platform of choice. You know, I think that the biggest thing behind it that that keeps it so fun and so impactful is that we also have a LinkedIn community of 300 Manufacturing leaders, it’ll probably be more by the time this podcast airs.

But people that are really just interested in helping others advance their career, enhance their businesses, it’s a great networking tool for, you know, at least here in 2021, we’re all stuck at home, probably into 2021. A little bit. It’s a great way to connect with other forward thinkers in the manufacturing space.

And the easiest way to get there, ManufacturingHappyHour.com/community which will take you straight to our group on LinkedIn. And I’d love to love to have anyone listening that that’s a forward thinker in the industrial space join or you know, someone that’s more forward-thinking in the B2B space in general. We’ve got a great crew there, and we’re always looking for more great people.

Sam Gupta  35:49 

Okay, amazing. Thank you so much for your time. Really appreciate it. This is great.

Chris Luecke  35:52 

Sam, Thanks a ton.

Sam Gupta  35:55 

I cannot thank our guests enough for coming on the show for sharing their knowledge and journey. I always pick up learnings from our guests, and hopefully, you learned something new today. If you want to learn more about press head over to ManufacturingHappyHour.com. You can also join the LinkedIn community by going to ManufacturingHappyHour.com/ community. With over 300 members and monthly virtual happy hours, it is the place for industry innovators and go-getters to collaborate, share ideas and make new connections, links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business, you might want to check other related episodes, including the interview with Curt Anderson, from B2BTail, who touches on what custom manufacturers need to know about starting their e-commerce journey. Also, the interview with Jason Chester from InfinityQS where we discussed the challenges today’s manufacturers face with changing consumer behavior.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform or DM me on any social channels. I’ll try my best to respond personally and make sure you get out.

Thank you and I hope to catch you on the next episode.

Outro  37:22 

Thank you for listening to another episode of The WBS podcast. Be sure to subscribe on your favorite podcasting platform so you never miss an episode. And for more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Greg from Winbond, who talks about why manufacturing organizations need to adopt the approach of Digital Twin to augment their sales teams with content marketing. He also touches on several stories where he has made a significant impact on the organization’s growth with his Digital Twin content marketing approach. If you are looking to learn how to grow with innovative marketing methods while having a good laugh, this episode is a must-listen for you.

Chapter Markers

• [0:00] Intro
• [2:42] Personal journey and current focus
• [6:54] Perspective on growth
• [8:21] What is content marketing?
• [12:30] Why are manufacturing sales-driven organizations?
• [15:22] What is copy and copywriting?
• [19:55] How to convert a sales-driven org to marketing-driven?
• [24:16] The most impactful pieces of content for B2B manufacturers?
• [29:39] Closing thoughts
• [34:10] Outro

Key Takeaways

• When you’re writing on the web, there are so many more metrics you can use to measure the success of your content marketing and your copy. It just helps streamline a lot of things. Today’s marketer is much more metrics-driven and focused on their metrics than ever before.
• Customers have a whole range of issues that they need help with. And if you integrate more people who can help those customers in different ways, that typically translates into what we think of as referral sources. We’re getting those people that you’ll work closely with featured in your content. And then they share it. They share it on their social network.
• The case studies that are on your website, and what your customers say about you. A lot of people kind of take those for granted. But those are gold for content marketing. When you go out and you are looking for a good place to eat, or you’re looking to buy a lawnmower, you’re looking at the reviews. The case studies serve the same purpose in the case of B2B content marketing.

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About Greg

Greg Mischio is the Owner and Founder of Winbound, a content marketing agency that provides content marketing for small marketing departments with a focus on manufacturing and industrial verticals.

Winbound provides a content + marketing approach, creating content that’s mapped to the customer journey and marketing for distribution via search, social and niche-based paid advertising. Winbound’s clients have enjoyed double and triple-digit increases in traffic and leads.

Resources

• Connect with Greg
  • LinkedIn | Twitter
• Connect with Winbound
  • Website | LinkedIn

Full Transcript

Greg Mischio  0:00 

You know what’s interesting is when people call me up, I used to have to talk to them for about an hour on the phone to get them to come in for an appointment. Now they come in and they’re ready to sign up. They’re ready for business. They’re ready to close.

Intro  0:16 

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies. So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta  0:52 

Welcome back to another episode of The WBS podcast. I’m Sam Gupta, your host, and principal consultant at digital transformation consulting firm, ElevatIQ.

Traditional manufacturing organizations are typically sales-focused. Even with complex products and longer sales cycles, where research-based content would be crucial, manufacturing organizations rely on relationship-based sales. With 70% of the buyers fully defining their needs on their own. before engaging with a sales representative, manufacturing finance executives and owners need to understand the value of content marketing.

In today’s episode, we have our guest, Greg from Winbound, who talks about why manufacturing organizations need to adopt the approach of Digital Twin to augment their sales teams. He also touches on several stories, where he has made a significant impact on the organization’s growth with his digital twin approach. If you’re looking to learn how to grow with innovative marketing methods, while having a good laugh, this episode is a must-listen for you.

Let me introduce Greg to you.

Greg Mischio is the owner and founder of Winbond. A marketing agency that provides Content Marketing for Small marketing departments with a focus on manufacturing and industrial verticals. Winbound provides a content marketing approach, creating content that’s mapped to the customer journey and marketing for distribution via search, social, and paid advertising.  Most Winbound clients have enjoyed double and triple-digit increases in traffic and leads.

With that, let’s get to the conversation.

Hey, Greg, welcome to the show.

Greg Mischio  2:40 

Thanks, Sam. Good to be here.

Sam Gupta  2:42 

Okay, to start off, do you want to start off with your personal story?

Greg Mischio  2:47 

Let’s see. I’m going to go all the way back to the date of my birth 1968. Do you want me to go back that far? And start from there? Okay, we have five minutes here. The first couple of years. I mean, second grade is really fascinating stuff. So if you don’t want me to go to it, that’s fine.

Sam Gupta  3:14 

I mean, if you did, balance sheet and cash flow statement, my audience is going to appreciate that a lot. So if you can talk about what cash flow statements you created earlier.

Greg Mischio  3:41 

You should have seen the lemonade stand. We were raking it in the gross margins. They were just amazing. I’m a writer, you know. So right away. The CFOs are probably skipping on to the next podcast. But no, that’s my background. I’m a writer. What is that? Is that right-brain thinking? Right. left brain Right, right. Yeah, left, right. Yeah,

Sam Gupta  3:58 

Left, right. Yeah. I think I have three man.

Greg Mischio  4:04 

I think you do too. That’s true. Um, now. So that’s my background. And I was a copywriter. When I started my career journalism grad. And I was like, kind of the Don Draper thing. That was what I wanted to do. I was a copywriter and I was writing headlines, and one plus one equals three print ads and stuff like that. And that was great fun. And then this internet thing came along. Suddenly, you know, there’s, there’s an old saying, and this, this probably is what CFOs pull their hair out. There’s an old saying, back in advertising. I know 50% of my advertising is working. I just don’t know which 50% of it is.

And that was, you know, people could never the CFOs could never prove out and the advertisers were hard for them to prove out where they were making the money. Then the internet came along and Google Analytics And we really start to be able to track what the results are. And so for a writer, I’m like, you know, it’s not just enough to write the catchy headline, now you got to be able to sell the products. So I started to really get into, you know, I, I’m not a CFO, so I still have to apply my creativity.

Greg Mischio  5:20 

And so started to get into content writing, and really started to learn how it works within the, you know, the realm of the internet and the web page. Then we started to start to do it for a couple of clients, and they were getting traffic to their sites, and their business was going up. And I’m like, this is cool. This is fun to do. And, you know, I started to build in some of the analytics pros behind me and really started to learn some of the mechanics of it, the SEO component of it, and then we started to build with Winbound. So what we’ve done with Winbound, which is a content marketing firm. So we help and we specifically work with manufacturers, we help them develop content that brings people to their website, and helps build referrals for their salespeople, and ultimately helps you increase your sales.

Sam Gupta  6:20 

So, since the purpose of the podcast is growth, and we are looking at 2,000% growth, and we are not selling lemonade, here, we are selling extremely serious stuff. In fact, this is a COO and CFO community. So I want to, you know, caution a bit there that you are not supposed to laugh.

Greg Mischio  6:40 

I’ll stop that.

Sam Gupta  6:45 

Okay, only I’m supposed to be laughing, not you.

Greg Mischio  6:48 

You make me laugh, Sam. So I’m sorry about that. I was laughing at you.

Sam Gupta  6:54 

OK. Tell me about growth, man. What is your perspective on growth?

Greg Mischio  6:56 

That is such a tricky question. You threw me, I gave you an answer. You posted that on LinkedIn. And I said, A wise man once said to me, and this was a CFO-minded guy he said, great companies or companies cannot standstill. You’re either losing ground, or you’re growing? And I think that’s a very simple answer. You are either going backward, or you’re moving forward. And so what is growth? How does that happen? How do you move forward? And I guess my approach to that is kind of a Ying Yang thing. It’s you know, when you’re setting a marketing plan, you’re using qualitative and quantitative or qualitative and quantitative goals.

So I always, I always kind of shook my hair, scratch my head when I was working for companies, and they’re like, the sales team is projected to do what we need is projected to do 23% growth this next year. And I was always like, what, where do they get their number? And how are they even going to do that? So that qualitative and strategy has to be a big part of it. And to me, that’s growth is easy. If you can have a good qualitative and quantitative pair of those two things, that’s when the growth occurs. How’s that?

Sam Gupta  8:21 

Yeah, that’s pretty good. So let’s talk about you know, manufacturing a bit. You said that you know, you are doing the content marketing for the manufacturing. So why do we require the focus as far as the content marketing goes, if you ask me if you’re simply writing some of the English sentences? Can you describe what content marketing is?

Greg Mischio  8:44 

We’ve come up with a way to describe what content marketing is in the context of manufacturing so this is a reason why we really have focused on manufacturing because we feel that there’s a number of eternal challenges that manufacturers face.

1) they have long sales cycles, too They have complex products and this is a reason why they’re always sales-driven. So manufacturing Yeah, let me back up. Manufacturers are typically sales-driven organizations. And the reason why they’ve always been sales-driven is they have complex products, as I mentioned, long sales cycle, a lot of parties that they’re trying to reach out to address you know, purchasing technicians, engineers, and CFOs.

Greg Mischio  9:48 

They also have you know, people are looking for different aspects of it. And then the third the newest challenge for manufacturers is the digital channel. And that means is suddenly the sales-driven organizations, and this has always happened because they’re sales driven, because their products are so technical, and they are dealing with so many different people.

So it’s been easier just to have a technician and engineer, train him a little bit on sales and just get them out to the golf course, or get them to the trade show and get the relationships there. along comes, the digital environment, which you know, changed my life. And it’s changing manufacturers. And suddenly, the customers are looking for things online, you know, they’re not always going to the tradeshow. In fact, they say, upwards of 70% of the prospecting occurs online, out of the hands of the salesperson. So what we’ve come up with is based on a term that’s used in manufacturing is called the digital twin.

Greg Mischio  10:51 

And the digital twin in manufacturing is a digital recreation of a machine or a process. So you can recreate this thing digitally. And then you can test the machine, you can prototype it, you can try different raw materials or alter your process with it. So it’s used in manufacturing, well, we said, well, let’s apply that to marketing. And let’s create a digital twin of a salesperson. So when people are searching and your salesperson isn’t there, your content is, and to take it one step further, just to make this very easy for CFOs, who are usually kind of, you know, hear a lot of marketing terms that get thrown around like SEO and etc, we kind of boil it down to three simple things in sales, it’s all about getting people to know you, to like you. And trust you, if those three things don’t happen, you’re not going to get the sale.

So we create content for those three different things to get people to know you kind of that type of what we call the top of sales funnel or just content where you’re introducing yourself to them and talking about their problems and their issues, content to get them to like you where you’re giving away like you know, typically think of white papers and things like that. And then content to get you to trust you case studies, the bottom of the funnel, sales pages, things on your website, so that in an essence, that digital twin, that think of the content as the digital twin of your salesperson, and that’s what we’re shooting new to help manufacturers with.

Sam Gupta  12:30 

Okay, so you mentioned a couple of things with respect to the long sales cycle and complex products. But then you also mentioned that it is sales-driven, that does not make any sense, to be honest, because typically, sales-driven organizations are going to be the ones that are not long in nature, because longer sales cycles are going to require a lot more content, a lot more research-based information, because that has to be supported in the sales cycle.

So why do you believe that they are a sales-driven organization?

Greg Mischio  13:18 

You just answered the question. I mean, that’s what they need to help fill in the blank blanks there. I think the typical kind of comes back to the complexity sometimes of the products and just the commitment to generating the content and even the means of communicating a lot of those things, you know, with video now, just you know, websites page, you know, web pages like that you have the means to do that.

So I think the long sales cycle might just be they get the information upfront, the salesperson has been back in touch. You tell me, Sam, you know, you’ve been involved in a lot of long-term sales and things like that. Why do you think it takes so long?

Sam Gupta  14:05 

Well, we are in the ERP space, and nobody is going to buy from me if I did the sweet talk over the phone, I can tell you that. Okay, what they care for is very insightful content. And that’s what we like to do in the case of the ERP sales cycle. The ERP sales cycle could be anywhere from six to nine months. If you close before six months, I think you are going to be a hero in our community.

Greg Mischio  14:31 

You’ve had some really good experiences with your sales cycle is speeding up because of content. And I’ve noticed that too with our clients. We had a customer who once said that this is not in the manufacturing realm but one of our B2C clients, she said, You know what’s interesting is when people call me up, I used to have to talk to them for about an hour on the phone to get them to come in for an appointment.

Now they come in and they’re ready to sign up, and They’re ready for business. They’re ready to close. And I think maybe, you know, maybe that sales cycle is occurring and is shortening because they are doing the research at their pace and getting the information they want as you said, you’re producing in-depth copy, they’re calling you up, you’ve gone through the pre-qualification process right there, they’re further down the sales funnel, and they’re ready to closer to the sale.

Sam Gupta  15:22 

So let’s say if we talk about the sales organization, and obviously, as a marketer, you talk a lot about copy. So what exactly is a copy for a manufacturing organization?

In your definition, let’s say they are sales driven, they don’t do any marketing, for some reason they are getting the business. I don’t know from where. Maybe from trade shows, and maybe you are defining that as sales-driven. So what is copy for a manufacturer or a CFO who does not understand what copywriting is?

Greg Mischio  15:49 

Right? So really, it’s an answer to somebody’s problem, you’re answering questions that people have about a product, even just about bigger strategic issues. You know, how do I become more efficient? How do I get quicker changeover on my converting equipment? You know, am I so you’re just addressing questions within the depth, quality answers. And so that’s, that’s what we’re writing about.

Now, when you get down and that’s more kind of like, top of the funnel, I mean, just think about, again, go back to the digital twin, when you meet somebody for the first time, you’re not selling them your solution right away, you’re trying to find out what they need, you’re trying to find out what the problem is. That’s what we’re doing with the content, we’re answering their questions, we’re trying to provide them with some in-depth background, particularly, specifically research-based content.

Greg Mischio  16:48 

And then, you know, once you get down to the sales, then you know, the content or the copy, you’re talking about benefits, how’s this helping them, you’re talking about social proof, or testimonials or case studies, in, you know, the case studies, you want to show how you move the dial, you want to show, again, the qualitative and the quantitative.

So we were just writing up a case study, we improve client sales by 32%, for a particular product, and we could have said, we’ve helped them improve sales, which we have. We have helped them improve their brand, which we have. But then, you know, you also have to include the quantitative part as well. So that’s what I mean by copy, I guess, to the bottom of the funnel, then as well. So you know, it’s really answering questions with your content.

Sam Gupta  17:42 

So let me ask you this. I mean, you know, let’s say if I’m a manufacturer, and I have my salesperson, obviously, the salesperson is going to be an expert of their game. And that’s why they are here. Right? And they are right there standing in front of the customer, they are able to answer any questions as the customer wants because they are trained in that.

So you are saying you are answering the question. So how is your answer going to be different from the salesperson’s answer?

Greg Mischio  18:11 

It’s not, it’s a digital twin. I mean, I want to pull from that salesperson, his expertise, his insight, or hers, and I want to put it online. So if that salesperson isn’t there, the answer is,

Sam Gupta  18:26 

Okay. So you mentioned that you know, the digital changed your life, how did it change your life? Can you describe an example?

Greg Mischio  18:32 

I think kind of going back to my personal story, a lot of the advertising back in the day, again, that 50% of my ad budget is working. I just don’t know what 50% it is. So I was just working in just, you know, some big ad agency or his ad agencies and doing copywriting strictly a writer and there wasn’t as much focus, I think, on really making the content work. And the performance of it was a lot more brand-based.

And it wasn’t as tied to the bottom line, I guess I would say, with the website, when you’re writing on the web, there are so many more metrics you can use to measure the success of your content and your copy. So I do think it just helps streamline a lot of things. And then today’s marketer is much more metrics-driven and focused on their metrics than ever before.

And so you know, it, it just for me personally, those are skills I had really develop and focus on, you know, so I can go in and talk to a CFO and just say, look, you know, we’re starting with our goals, lower your cost per acquisition, give you clear ROI.

Sam Gupta  19:55 

Yeah. So do you have any stories that you might want to share? Where you have made some difference in the organization? Maybe they were sales-driven, based on the definition that you mentioned. And then you made the marketing-driven. So can you walk me through the entire process? Where they were and what you did? And what was the impact of what you did?

Greg Mischio  20:18 

I’ll talk a little bit about Delta ModTek, which is one of our clients. And let me just be very clear about this in terms of the Digital Twin, we are not replacing salespeople. We do not believe that that that is going to happen. And we are complements to the sales team. We want to bring marketing closer to the sales team, you know, there’s always been those silos and a lot of finger-pointing between sales and marketing. Why isn’t marketing generating more leads, why aren’t sales closing more leads, we need to bring those two parties together.

And I think through the kind of the digital twin mindset, we can do that. So we were contacted by Delta Montek. They wanted to, and this happens a lot. They wanted a new website and they wanted to improve their, their digital presence or their presence on the internet. And they weren’t really too sure how to do it. I mean, they knew a little bit about SEO, they knew a little bit about social media. They just didn’t quite have the strategy behind it. And they were looking for someone to help them execute it.

So you know, we started out with the website. They definitely needed a redesign. But we built their sales pages. And then we employed a content strategy to get them in framework out there. Then we just started to generate content and reach out. And a big thing. And I think you’re really good at this. Sam. Kudos to you on your marketing outreach.

Greg Mischio  22:37 

So we’re working with Delta ModTek. And this was a big gamble for them. Most manufacturers are very conservative. And they don’t get the whole, marketing. They’re skeptical of it. And so we just started to do what we do. And we started to get an increase in traffic. Now, our traffic generated a 273% increase in traffic.

Now, this was over four years. So you might say, well, that’s not that much. But it was an increase in quality traffic. And that’s, that’s the key is to be very focused there pretty narrow niche. And we did it, we started to really get some good rank for some of their bottom of the funnel, product pages.

So that’s, you know, where you’re getting the sales leads, and generating more sales. So when we started with them, they had like 140 conversions off their website. By the time we were done, they add up to 487.

In the year 2019, this is a case study on our website. So 245% increase from their product pages, kind of turning this website brochure into the digital twin that we’ve been talking about.

Sam Gupta  24:16 

Okay, do you have any marketing material that you build that you felt maybe was really impactful?

Greg Mischio  24:23 

One of the things and I think this is more, it’s not a specific piece. Sam, it’s more of this philosophy.

Greg Mischio  24:48 

What we like to do with our top-of-funnel content, and that’s the content that gets people to kind of know you and like you as we do what’s called collaborative content. Okay, we reach out. And we work with partners, you know, suppliers, other experts in the industry, and we try and integrate them into your content.

So, you know, I’m going to do a blog post on, you know, great marketing for manufacturers. And I’m gonna reach out to Sam and say, Sam, give me a quote here because I know Sam likes to talk, and he’s got a great speaking voice, but here, I’m gonna get him actually in our blog post. If you only covered one point, I am gonna get him in our blog post, and I’m gonna get him, he’s gonna participate. And so we do this with manufacturers, you know, again, their suppliers, partners, experts in the field, and we get them integrated into the content.

Greg Mischio  25:59 

And it’s a really cool thing because suddenly you’re sharing your expertise, you’re talking about yourself, and, sharing what, you know, that’s critical. But you’re part of the larger picture that customers need help with. You’re solving the bigger picture.

So like your product might serve and help you with one specific part of what they’re looking for. But you know, customers have a whole range of issues that they need help with. And if you integrate more people who can help those customers in different ways, that’s a great thing. That typically translates into what we think of as referral sources.

And that’s traditionally how salespeople have done that made a lot of referral sources, you know, people uncomplimentary, you know, professions and things like that. We’re doing it with our content. And we’re getting those people that you’ll work closely with featured in your content. And then they share it. They share it on their social network.

Greg Mischio  27:20 

On LinkedIn, he’s sharing the content people like it, he likes, he connects with them. They set up a meeting. And really at the end of the day, you know, the stuff we’ve got a lot of, you know, technical terms are thrown out here in terms of SEO and landing pages, you know, a lot of the marketing terms were really is coming down to a systematic way for your sales to me team to make referrals and connections and those connections result in sales.

Sam Gupta  28:06 

Okay, good stuff. What else did we not cover that you plan to cover as part of this interview, Greg?

Greg Mischio  28:20 

You know what I one thing I do want to say. And this is really something that we’ve noticed over the last year or so. The case studies that are on your website, and what your customers say about you. A lot of people kind of take those for granted. But those are gold. Those are really gold, especially in manufacturing. So think about it this way. When you go out and you are looking for a good place to eat, or you’re looking to buy a lawnmower, you’re looking at the reviews.

Well, case studies are in those reviews. Let me back up. Second, those reviews are where they call social proof, right. So social, it’s a way for people to see you know, put their vote in its social proof everybody’s voting on what’s a good product. these case studies are great are the social proof for manufacturers.

So when you get your customers to talk about you and give the quantitative results, those are huge. And we’ve used those a lot. And they’re very convincing. We’ve seen them use as content and in articles. And people love to read about that.

Sam Gupta  29:39 

Greg, do you have any last-minute closing thoughts?

Greg Mischio  30:14 

Whether you’re working with us, whether you’re working with somebody else, this whole idea about getting the Digital Twin of your sales team online and engaging in content and making yourself part of the picture.

And especially, I’m going to put out the call to CFOs. Here, we marketing people tend to be creative types, and, and we can really use your help. And I’ll give you a perfect example of this. I was talking to a salesperson, and they’re like, yeah, part of this is the lifetime part of what’s great about us is the lifetime return on investment.

And I’m like, Well, how can we quantify that, you know, how can we the lifetime value of a product? How can we do that? And I’m thinking we just need to talk to the CFO, we need your financial minds involved with proving out the marketing and the value of your product.

So I think it’s a great opportunity for CFOs to really get in and help prove out the quantitative aspects of what you’re trying to do. And that will yield those, you know, qualitative results.

Sam Gupta  32:12 

Alright, amazing. Thank you so much for your time, Greg. This has been fun on Friday.

Sam Gupta  32:38 

I cannot thank our guests enough for coming on to the show and sharing their knowledge and journey. I always pick up stuff from our guests, and hopefully, you learned something new today. If you want to learn more about Greg or Winbound, please visit winbound.com. links including the one for the digital twin marketing guide, and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business. You might want to check other related episodes, including the interview with Chris Luecke from the manufacturing happy hour podcast, who touches on how manufacturers can augment their offerings by adding value-added and industry 4.0 solutions. Also the interview with Joe Sullivan, from gorilla 76, who touches on different aspects of social media and marketing and why manufacturing organizations need to rethink their marketing strategy with COVID-19.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform. Or DM me on any social channels. I’ll try my best to respond personally and make sure you get help.

Thank you, and I hope to get you on the next episode.

Outro  34:10 

Thank you for listening to another episode of The WBS podcast. Be sure to subscribe on your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Cory Warfield from ShedWool, who shares LinkedIn algorithm secrets and discussed how he became a popular LinkedIn Influencer with nearly 250K followers through his authentic content and personality widely admired on LinkedIn.

We also got a chance to discuss what finance and operations executives need to do to start their LinkedIn journey and why it’s important to be present on LinkedIn. Finally, we discussed the nuances of the LinkedIn algorithm and how to create content that will give you high visibility on LinkedIn.

Chapter Markers

• [0:00] Intro
• [3:11] Personal journey and current focus
• [3:41] Perspective on growth
• [4:26] Cory’s LinkedIn journey
• [9:55] Content strategy for LinkedIn posts
• [12:36] Do influencers get higher engagement on LinkedIn?
• [13:26] LinkedIn Three Rings of Engagement
• [18:02] Do Emojis help with engagement on LinkedIn?
• [25:15] How content needs differ between finance and marketing users?
• [27:09] Closing thoughts
• [29:35] Outro

Key Takeaways

• Never pitch on LinkedIn. LinkedIn is meant to be to increase visibility about your brand in order to stay on top of people’s minds.
• Post educational content on LinkedIn to build thought leadership.
• Vanity metrics, as such are a disservice to the poster and the people that are engaging with them to a degree.
• If you love accounting, and if you’re only talking to the other seven people in the world that love accounting, you’re never going to get virality because of the LinkedIn algorithm. But what I would say in those scenarios, is make a little video of yourself.
• Any post that goes viral has reached the third ring of engagement. The first ring of engagement will quite literally only go out to a select number of your first connections. Now, if your post doesn’t do well, with that sample audience, it doesn’t matter. If you have a million followers, that post won’t do well. And if it doesn’t do well, right away, although they’ve begun to change a little bit of the LinkedIn algorithm, and then that kind of once you’ve posted, the way that it performs in that sample audience is very important.
• That second ring is actual employees of LinkedIn that are on the clock. They have algorithmically been pushed content that LinkedIn is now saying to their employees, hey, this seems to be doing well. Do you guys like it?
• If you and I do the same video with the same five words on it. If your network loved that, and mine didn’t, the LinkedIn algorithm could help it go viral. And mine might not even if you have you know, hundreds of 1000s of fewer followers than me.
• The LinkedIn algorithm does not like it when you do the same thing every time. Even I can’t do a GIF every time sometimes I have to switch it to a video sometimes I have to do a video on myself. Sometimes it has to be text only.

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About Cory

Cory Warfield, the Founder and Chief Visionary Officer of ShedWool, Inc., is an entrepreneur, business leader, mentor, consultant, influencer, and philanthropist.

His work with BTEC, Founder Institute, and Coryconnects has had an impact locally (Chicago) and globally, and he has helped launch and scale more than a dozen companies, serving as a CEO, board member, or advisor to many of them.

His expertise spans physical products, software, and business consulting. Cory is also passionate about the environment, the underprivileged, exploration, and animals.

Resources

• Connect with Cory
  • LinkedIn | Twitter
• Connect with ShedWool
  • Website | LinkedIn | Twitter | Facebook | Instagram

Full Transcript

Cory Warfield  0:00 

That post blew me up I got a couple of 1000 people that followed me that week. I got some great inbound leads. Some friendships were formed in that week just from his post about me.

Intro  0:15 

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies. So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta  0:52 

Hey everyone. Welcome back to another episode of The WBS podcast. I’m Sam Gupta, your host, and principal consultant at digital transformation consulting firm, ElevatIQ.

When it comes to growth, personal branding, and social media play a huge role. While most companies might be present on social media, only a few understand the LinkedIn algorithm, nuances, and have mastery in creating viral posts. Among other social media platforms. LinkedIn is the most powerful when it comes to marketing for B2B brands targeting executives. LinkedIn is also equally powerful for personal branding and positioning yourself as an expert in a given field.

Sam Gupta  1:38 

In today’s episode, we have our guest, Cory Warfield from ShedWool, who discusses how he became a popular LinkedIn influencer. With nearly 250,000 followers through his authentic content and personality widely admired on LinkedIn. We also get a chance to discuss what finance and operations executives need to do to start their LinkedIn journey, and why it’s important to be present on LinkedIn. Finally, we discuss the nuances of the LinkedIn algorithm and how to create content that will give you high visibility on LinkedIn.

Let me introduce Cory to you. Cory Warfield, the founder, and Chief Visionary Officer of ShedWool Inc. is an entrepreneur, business leader, mentor, consultant, influencer, and philanthropist. His work with BTC, Founders Institute, and CoryConnects has had an impact locally in Chicago and globally. And he has helped launch more than a dozen companies serving as a team member, board member, or advisor to many of them. His expertise spans physical products, software, and business consulting. Cory is also passionate about the environment, the underprivileged, exploration, and animals.

With that, let’s get to the conversation.

Hey, Cory, welcome to the show.

Cory Warfield  3:08 

Thanks so much, Sam. Great to be here.

Sam Gupta  3:11 

Hey, thank you so much for joining and finding the time. Obviously, our listeners are super excited to listen to the advice on the LinkedIn algorithm from you. You are extremely influential on LinkedIn. And that’s why we want to dig into every single LinkedIn algorithm secret out there. Okay, but before we do that, do you want to start off with your intro?

Cory Warfield  3:31 

For sure. Hi, everybody. Thanks for tuning in. For those that don’t know me, my name is Cory Warfield. I’m a serial entrepreneur, social media influencer, our growth hacker and I’m happy to be here.

Sam Gupta  3:41 

Okay. Thanks, Cory. And the next question that we always ask with all of our guests is going to be your perspective on growth. What does growth mean to you, Cory?

Cory Warfield  3:50 

So a quote that I love is a growth occurs outside of the comfort zone. And for me, growth doesn’t inherently mean getting bigger in size, getting bigger and volume getting bigger and mass. But for me, growth is the progression or the unfolding towards a goal. So if it’s a human being getting bigger, the growth can be your body getting bigger and more muscular. If it’s trying to learn a new skill or a new concept, it could be intellectual or cerebral. But for me, growth is always just that productive. unfolding towards a goal and typically a goal that is understood.

Sam Gupta  4:26 

Okay, so tell us a little bit about your journey on LinkedIn. how it all started, when you recognized the value of LinkedIn. What were the initial challenges when you started? Could you touch on that?

Cory Warfield  4:38 

Sure. So I’ve been active on the platform for just over three years, and I decided that for myself as a waiter turned entrepreneur, 20 years in restaurants and then starting a smart scheduling company using mobile apps and web technology to help restaurant staff properly. I understood that I needed to establish myself as a thought leader in the restaurant space and in the Workforce Management space. And there weren’t too many people in LinkedIn that were coming from my industry being the restaurant and hospitality industry.

But there was one lady and I always love to shout her out. She’s become a dear friend. Her name’s Carrie luxon. And she was starting, she owns a number of subways here in Chicago. She was the fifth hire at Potbelly. She helped create their HR department, way back in the day, and now they’re a national sandwich brand.

But she was making these videos and getting so much engagement at the time, not too many people were getting the type of engagement through the LinkedIn algorithm she was which three years later might not sound as high but she was getting 50 likes, 70 likes, 100 likes on her videos.

Cory Warfield  5:36 

And she was always talking about how you know how to either run restaurants more effectively, new restaurant tech, anything like that. And so I understood she was my archetype. She owns enough restaurants here in Chicago, that she was a strong six-figure client prospect for me as well.

So I was nobody, I had no followers, I literally probably had less than 100 connections and followers on LinkedIn, I started to engage with her content I got on her radar. And she really liked what I was saying in the comments and supportive as I was being. So I made a rookie mistake.

I went in for the pitch, I said, You know, I love your content, I would love for you to take a look at this company that I’m building and the software that we’ve created, I think it’d be a big value. And I think you can help us get into some of the bigger groups.

She said, Absolutely not.

I don’t like to be pitched on LinkedIn. I don’t touch some of that world. And, you know, the fact that you pitch to me, makes me a little bit less inclined to you know, even be friends with you. So I said, Okay, that was my bad. I said if I never pitched you again, can I still support you? And can we be friends?

She said absolutely.

And these years later, we still have a strong friendship. But so rather than trying to leverage her or to piggyback off of her, I decided to emulate her a little bit.

Cory Warfield  6:53 

So I started doing my own similar type of videos. And they were they didn’t do well at all. One of my teams now has gone through and scrutinized my three-year journey on LinkedIn and they pull up some posts from back then Sam that literally still to this day, I have zero like three likes 18 views, 100 views, and because I’m resilient and because I’m a very patient person, and because I had decided after reading Gabriel Weinberg’s book tracks, and this was where I needed to really show up and blow up.

I just kept at it.

And I kept that up for about a month with no traction, my videos got no likes, no comments, no views, but I still kept making them. And although Carrie Luxon had encouraged me to do it, I wasn’t getting engagement from her. But about the second month, then some of those videos started to do fairly well back then 10 likes 15 likes, you know, a couple 100 views. And I started understanding the LinkedIn algorithm slightly, getting people that were sending me connection requests every day.

Cory Warfield  7:50 

So I realized I was onto something. People started really mentioning that they loved my authenticity because I wasn’t putting on any pretenses. I was never being salesy. I was only showing up, either offer my perspectives and ask people, there’s why we’re showing up to be either fun or supportive. And, you know, I never tried to let perfection be the enemy of progress. I never took things too seriously. I was just logging on every day and finding people that I thought could either teach me something by me watching them and I would support them or people that I thought were prospects, I began to really slow play.

So I had to start to show them, love, engage with their posts, and that I never pitched, anybody. And I’d say probably six months later, my post started doing very well. And I had started adopting a LinkedIn algorithm strategy of finding targeted influencers around the world with at least a six-figure following and showing them a lot of love on the platform.

Cory Warfield  8:43 

And it took a month or two of that before some of them started showing love back and so some of them at the time had you know, half a million followers 700,000 followers, they started engaging with all my posts and they started blowing up 300 likes, 500 likes then one of them Rob famous guy he did a post about me he literally did a post he said I don’t understand how some of you have millions of followers and you’re only getting a couple 100 likes per post.

My friend Cory only has 8000 followers and the guy’s getting 1000 likes on some of his posts. And that post blew me up I got a couple of 1000 people that followed me that week I got some great inbound leads some friendships are formed in that week just from his post about me and so you know, I always showed him love found some other people and I’ve really been able to attach my name to bigger and bigger names and on these podcasts, I’ve learned that it’s less beneficial and people don’t care as much for the name dropping with some of these are names of people I’ve been respecting and looking up to for years, if not decades, and they became fans of mine pretty quickly once I just figured out how to show up authentically how to show up intentionally and how to not push people away.

Sam Gupta  9:55 

Okay, amazing. So let’s say if I have a Finance Or the operations manager, those are our audience. And typically, we used to joke in the accounting class, okay? That there is nothing fun about accounting. So let’s say if I do accounting for, for business, and for fun as well, I love accounting, but nobody else is going to love anything about accounting.

So let’s say if I want to make my presence on social media, and I want to create similar viral posts, using accounting as a subject, what would be your advice? What would be the niche that I should be picking on? In terms of the content, the subject of the content? And number two: Should I be focusing on something else that is going to get far more likes than, you know, doing what I’m doing for my profession?

Cory Warfield  10:46 

Well, so I always say that followers, views likes, they don’t pay any bills, they don’t make payroll, they don’t pay the mortgage. Right. So vanity metrics, as such are a disservice to the poster and the people that are engaging with them to a degree.

However, I find so many people on LinkedIn are simply preaching to the choir, if you love accounting, and if you’re only talking to the other seven people in the world that love accounting, you’re never going to get any other virality. But what I would say in those scenarios, is make a little video of yourself. So people can look in your eyes, hear your voice, and get to know you, or find a cute little video that people are going to resonate with and say something along the lines of, I might be the only person in the world that loves accounting.

Cory Warfield  11:31 

However, I’ve been seeing a lot of people lately talk about getting leads through LinkedIn. And I’m very curious if I can’t get an accounting link, an accounting lead through LinkedIn. So I’m going to try something different today. Please drop a comment with what you do, what goods or services you’re selling. And I’ll see if I know anybody that I can, that I can provide for you as an inbound lead because I really appreciate all of you guys.

And that’s it. I guess what some of those people are going to do, they’re going to comment with leads that you need to know, hey, this person is just saying they needed a CFO, this person was just saying they needed a tax accountant. And it’s how people start to come in, lean into you because you didn’t push them away. And I do think that probably 70 something percent of people on LinkedIn are pushing most people away, accidentally. So it’s not preaching to the choir, it’s casting a very wide net, it’s letting people that care about what you actually care about that you’ve cheesed, lean into you. I don’t know if that resonates with you, or anybody listening. But for me, I find that that’s very unique. And it’s very powerful on LinkedIn.

Sam Gupta  12:36 

So that’s a good way of thinking about it. In fact, I mean, I have seen a lot of different posts and a lot of different influencers, who are actually posting that content.

Typically my understanding of the LinkedIn platform, the way people are commenting and posting, they like to go after the highest commented or highest engaged post because obviously, they are looking for ROI as well of their time, whatever time they are spending, they want to make sure that they are, they are commenting on the highest light, highest engaged polls, so they get the maximum visibility, the same thing is done by the LinkedIn algorithm as well, a LinkedIn algorithm like to put the post on top, which is going to be the highest engagement.

So let’s say Cory if you are posting the samples, and I’m posting the same post, obviously, you are going to get a lot more attention.

Cory Warfield 13:23 

That’s not true.

Sam Gupta  13:25 

And why is that?

Cory Warfield  13:26 

Are you familiar with the three rings of engagement on LinkedIn? No. Oh, It surprises me that you’re not. And it blows my mind how few people are but so LinkedIn has what they call three rings of engagement. It’s an internal ESOP. And so any post that goes viral has reached the third ring of engagement.

But I’ll tell you what the first two are, the first ring of engagement will quite literally only go out to a select number of your first connections. If you have a lot of followers that you’re not connected to them, they probably second connections, but they might see it as well, because they follow you, but they’re only putting it out to a small sample size of your core audience.

Cory Warfield  14:08 

Now, if your post doesn’t do well, with that sample audience, it doesn’t matter. If you have a million followers, that post won’t do well. And if it doesn’t do well, right away, although they’ve begun to change a little bit of the LinkedIn algorithm, and then that kind of once you’ve posted, the way that it performs in that sample audience is very important.

If it performs well, if they share it to 100 people and 30 of them like your posts or if they give you 100 views and 20 people comment on that post. The LinkedIn algorithm picks that up as being relevant to a small audience and it then boosts the second ring of engagement. That second ring is actual employees of LinkedIn that are on the clock. They have algorithmically been pushed content that LinkedIn is now saying to their employees, hey, this seems to be doing well. Do you guys like it? That’s it now.

So to your point with accounting, if they put it through to 20 employees, and none of them like accounting, that post is done.

Cory Warfield  15:10 

And it’s not even a bias, it’s asking them if they think this post is relevant. If this post is going to do well because if they think yes, this post is amazing, it makes it to the third ring of engagement. And that ring is the actual second and third connections and all of your followers, any post that you see get 5,000, 10,000, 100,000 views, it’s because they open up the floodgates that posts algorithmically using the computer science that they initially set up and that they continue to monitor that said, Okay, this person’s inner circle likes this. And they even using the SSI scoring and things like that, we’ll see if it’s the relevant people what title they are all that, but this is resonating with people, so it’s worth putting it through to our people.

Now someone like some of my friends with millions of followers, their posts will always go to the third ring and engagement always though it doesn’t matter. But it’s because they’ve cracked the code. And because these people, it’ll still quickly go through the three rings. But it’s known if they’re Bridgette’s posts, millions of people want to see that post.

Cory Warfield  16:13 

So the second ring, they’re not going to scrutinize so much, then there are things the LinkedIn algorithm was most people are helping job seekers, it helps them It loves when recruiters are giving people ways that they can actually use the ATMs or something like that more to their advantage because that’s part of LinkedIn business model.

But so that’s the thing. And so it could very well be if you and I do the same video with the same five words on it. If your network loved that, and mine didn’t, your posts could actually go viral. And mine might not even if you have you know, hundreds of 1000s of fewer followers than me. It also could be if we both posted at the same time, you’re in a different timezone than I am. And maybe you know, that’s why I always post very early in the morning and very late at night, I’d like to I have a lot of reasons for that we don’t have time to get into.

Cory Warfield  16:59 

But there are a lot of variables. And so people that are always going viral have figured that out the LinkedIn algorithm, they know what time to post, they know what the second ring likes, I hate to tell you this, and anybody listening, but that second ring, they love short, fun, funny videos, it can be just it can be but they love it every time.

And if it’s a long video, they don’t have time to watch it. So it’s almost never gonna make it through. The only way around that is the LinkedIn live, which escalates because they don’t have time to fully scrutinize it. So you know, that’s why they typically get low views, but higher engagement, and other LinkedIn stories as well, which I find almost instantly go through the second and third connections, I think they’re really trying to figure out the LinkedIn algorithm is a pertains to stories, but so that might be a little bit more insight on how you can kind of game the LinkedIn algorithm is you have to actually cater to the real LinkedIn employees and understand what it is that they like.

And the way to do that is by studying what else is going viral because any viral posts by anybody on there have passed through that secondary of engagement successfully.

Sam Gupta  18:02 

Interesting. And do you have any perspective in terms of, you know, some of the content that I am noticing these days? And that’s been a tradition as well, everybody’s trying to sort of inducing the fear using the emojis. Or they are trying to grab the attention. Do you have any perspective on that? why people do that and why everybody is sort of engaging with that content?

Cory Warfield  18:25 

Yeah, so there are people who put emojis in their names. I think that looks very sloppy, juvenile, and unprofessional, I find that people with the images and their names typically are getting very scattered, fragmented, and a strategic engagement. None of them are prospects, nobody’s leaning into what they do professionally in the comments.

But I find some people use emojis in the content of their posts very successfully. I spent about a year using emojis fairly regularly. But what I would do is I would A/B test them. And it used to be that if you did every one of your posts with an emoji none of them would do well. If you did a third to almost half of your posts with emoji and half, not the ones that had emojis that actually outperformed the ones that didn’t with the LinkedIn algorithm needs variation. It doesn’t like the same thing over and over and over.

But what I found is to A/B test the LinkedIn algorithm almost daily on LinkedIn as far as performance, and what I’ve noticed is in the last year, this calendar year, posts with emojis have been doing less and less well. And I’ve tested it a few times myself, I’ve done the same post with or without emojis, same date, same time, one week apart. That should be very similar, very similar performance, the ones that the emojis were about 60 to 70% down on views and engagement.

Cory Warfield  19:42 

So my testing, at least for me in my network at this point is that the emojis are hurting posts. Now. Again, for anybody that has different experiences, it doesn’t bother me, I’d love to engage with hosts with emojis as well. I think it makes it a little bit light-hearted, a little bit fun, although maybe a little less professional. I’ve had clients that have their emojis in their names before the super long names with 30 words after their name.

And first of all, it’s not branding and annoys people, it looks very juvenile, but the long names as well where they put all of their qualifications or a tagline in their name. If someone tries to tag them in the content in the content, they only have 1600 characters, that person’s name now might be 100 characters, that’s a 16th of your entire post, right? Just trying to tag this person. And with the emojis. If someone has emojis in their name, I either don’t tag them or I delete the emojis out because I don’t like how that looks. It makes me look juvenile.

So I don’t know, maybe that gives some insights. But I do see the post with emojis still performing pretty well, typically.

Sam Gupta  20:42 

Yeah, that’s an interesting perspective. In fact, I have been thinking about that a lot, too, to be honest. Okay, and I like to analyze things myself. Okay, so initially, I never appreciated emojis, especially on LinkedIn, just because it’s supposed to be more of a professional network. It was very hard for me, I’m slightly on the older side, to be honest, in terms of age, so it was harder for me to read as well. And sometimes these guys like Brian Burke would use emojis. And I would not even understand what they’re talking about.

Because they were talking in the language of emoji. It was very hard for me to understand. But then I started using emojis. And I have a little perspective on that. And it has actually helped me because it actually helps with the reading. It helps with the engagement.

Imagine, let’s say if you have had a website that did not have any images whatsoever. The only thing it had is the wall of text, so it would be very hard to read. So emojis actually serve the same purpose psychologically. In breaking the text. That’s my perspective. I don’t know what you would say to that.

Cory Warfield  21:46 

So I might tell you that I will say a few things. The first is that emojis actually take two characters, rather than one. So instead of having 16 characters, you only have 8. A lot of times and anymore, my posts are just silly, light-hearted. And I spend maybe less than an hour on LinkedIn these days, I used to spend about 12 to 14 hours a day on LinkedIn, and my posts were all high and people used to love them.

I’d won awards for some of my posts. They’re all very cerebral, very intellectual, very on-trend. And I would, I would put emojis in some of them as well. But for me, that the quality and caliber of people that are engaging with those, it’s a little bit lower. I was using all 16 characters to write value add. So if I only had 8, it wouldn’t have been worth me even crafting such, what I consider to be an intelligent post at the time. And not only that, I can tell you, I had a few people, including a global executive of many billion-dollar companies. He’s become a bit of a friend of mine, he had actually reached out and said, Cory, I’m going to stay connected to you, I’m going to stop following you because your content annoys me.

Cory Warfield  22:53 

And I said, Okay, I just need to know what it is that annoys you because I maybe it’s annoying some other people. And I don’t want to be pushing people away. I appreciate you’re letting me know. And I, you know, I could probably find this somewhere in my message history. He told me what he didn’t like about my posts and saw the emojis and made it look like I was an amateur.

And from that moment, I stopped I said I don’t need all the views or all the lights. If a person like this person doesn’t even want to see my content. Now they would be a multi-million dollar account for me if they signed the restaurant group with their three brands under my company. I couldn’t risk losing a million-dollar opportunity for a couple of silly emojis. And since I’ve stopped using them I’ve had I don’t know how many but some you know, more than a couple of people actually tell me that they like my content better now that there aren’t emojis.

Cory Warfield  23:46 

So for myself personally, I tend to lean towards not using emojis anymore. I certainly don’t I have coaching clients that I work with growth clients that use emojis and love them. And they get really upset when they hear that I’m not a big fan, I say listen, AB test your posts with or without them. And if they do even better with them, then you’re onto something and your audience is different than mine.

However, no matter what if someone loves emojis, I would encourage them to do a split test and A/B test. Do some posts with it and do some posts without it. See if all those posts do better than do a bunch. I can almost guarantee and put my money where my mouth is that people that use emojis every time are going to see lower engagement, lower views, and lower engagement on all of their content.

And it’s because the LinkedIn algorithm does not like it when you do the same thing every time. Even I can’t do a GIF every time sometimes I have to switch it to a video sometimes I have to do a video on myself. Sometimes it has to be text only. I’ll put an emoji sometimes at the very end of my posts. I’ll do a piece of emoji and a love emoji for peace and love. People seem to like that sometimes. So I don’t do that every time either. And again, that’s sometimes just to test the performance of those emojis. But I found that there may be only slightly that negative but for me, they’re not negative,

Sam Gupta  25:15 

Interesting, very interesting perspective. And, in fact, I don’t know if this is going to be really the difference in the background. And I don’t know, whether this executive was had an operations background or the marketing background. So typically, when I talk to marketing folks or sales folks, they are slightly more expressive the way they talk. They always have been. If you talk to finance and operations, people like my audience, they are slightly more reserved, they are not as expressive.

So obviously, they are not going to appreciate I would say, as many emojis just because of the kind of, you know, the community they hang out with. And obviously, they want to be considered seriously in their community, otherwise, they’ll not be able to hang out with them. And nobody wants to lose their connections or friends, because of one silly emoji or a post on LinkedIn. Right?

So do you have any perspective in terms of let’s say, if you’re targeting the sales folks, or marketing folks versus the operations of finance folks, then maybe your content strategy should be different, right?

Cory Warfield  26:14 

Absolutely. And everyone needs to have a strategy that they’re executing on. And I think you’re absolutely right sales and marketing, typically, or younger people typically are a little bit more, more open to risk. So the emotions are risky, inherently, on the fun, whimsical nature of them does lend better to sales and marketing, the executive that I’m talking about absolutely, as a finance and ops guy, and a lot of my target areas as well.

And he was I think he was the youngest CEO of a billion-dollar national restaurant brand. And now he’s CEO of his he owns many restaurant brands, and they’re crushing. I mean, they’re there, I think, on their stakeholder call. I think they said they had $7 billion free cash on hand, which is incredible for a restaurant group. So you know, that’s why they’re a target of mine. But yeah, absolutely. He is not a sales or marketing guy.

Sam Gupta  27:09 

Yeah, I know, I know, I can tell you that. I mean, you know, because the community they hang out in, it’s different. So if you had the sales and marketing executive, then your experience is probably going to be different.

So that’s pretty much it for today. I don’t know if you have any other advice? Or any closing thoughts, Cory, before we close?

Cory Warfield  27:30 

Yeah, Sam, I’ll just speak to the one thing you just said. And that’s it. You don’t have as many followers as someone like me. And the one thing I want anybody listening to this, including yourself to remember is, I didn’t use to have as many followers as I have, either. And nothing has changed. I just split testing the A/B test to make sure that I can continue to grow.

But it’s the same Cory that was when I had 500 followers when I had 5000 followers when I had 100,000 followers when I broke 200,000 followers and my content, my persona, my approach to myself will be the same even when I have a million followers.

So, you know, it’s easy to get caught up on the metrics sometimes. But I think the best thing anybody can do is keep it real, be authentic, and just be here to support one another and growth will happen organically.

Sam Gupta  28:12 

Okay, amazing. Thank you so much, Cory, for your time. Really appreciate your advice and insight.

Cory Warfield  28:19 

Absolutely. It’s a pleasure. Nice, nice talking with you, Sam.

Sam Gupta  28:22 

I cannot thank our guests enough for coming on the show for sharing their knowledge and journey. I always pick up learnings from our guests, and hopefully, you learn something new today. If you want to learn more about Cory, please visit CoryConnects.com. Links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business. You might want to check other related episodes, including the interview with Sarah Barnes-Humphrey from Shipz, who touches on why LinkedIn is essential for personal branding and community development. Also, the interview with Joe Sullivan, from Gorilla76, who touches on different aspects of social media, and marketing, and why marketing organizations need to be reinvented with COVID-19.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform or DM me on any social channels. I’ll try my best to respond personally and make sure you get out.

Thank you, and I hope to catch you on the next episode.

Outro  29:35 

Thank you for listening to another episode of The WBS podcast. Be sure to subscribe on your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Brian Burke from SellYourMac.com, who takes us through each inflection points in his company’s journey and how the need for people, process, and technology changed at each step of his growth.

Since they have accomplished significant growth in a highly competitive business, we touched on their differentiators. And what has fueled their growth. Finally, he shares his thoughts on how personal branding and social media has been the main driver of their growth.

Chapter Markers

• [0:00] Intro
• [3:33] Personal journey and current focus
• [6:17] Perspective on growth
• [8:06] SYM’s growth journey and its challenges
• [9:35] Growth inflection points for SYM
• [15:29] SYM’s journey with technology
• [19:47] SYM’s business model and Apple ecosystem
• [24:31] How SYM is able to differentiate on customer experience
• [27:25] Brian’s personal branding secrets and how that is helping them
• [32:55] Closing thoughts
• [35:44] Outro

Key Takeaways

• Stay ahead of your spatial needs, so you’re not feeling constrained, and you have room to grow.
• Every year on average, I’d say we probably add, about one person. Some people leave for various reasons, which has typically nothing to do with our company, usually, people are going off to get another school degree or, you know, simply moving or something like that.
• The new Apple Macs that launched this past month, the M1, are going to be so different that you’re going to have to have different fields in there to account for these things. So, we’re kind of constantly retooling it to make it better.
• software is expensive and very time-consuming. And we were not a software company at the time. So it was a headache, I guess, for us, you know, kind of learning through that process.

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About Brian

Brian is Chief Mac Man of SellYourMac.com (SYM), the world’s most trusted and highest rated Apple trade-in company. SYM has paid out $38M+ and has helped over 100,000 customers. Brian loves helping individuals and organizations stay up to date on their Apple products.

As a lifelong learner, Brian has become a Sommelier, an Apple Certified Mac Technician, a Notary Public, an Ordained Minister, and a Certified Scuba Diver. Brian is passionate about empowering underprivileged students through gifting Apple technology. He believes gifting them a Mac can truly change their lives, their outlook on the world, and their future job prospects.

Resources

• Connect with Brian
  • LinkedIn
• Connect with SYM
  • Website | LinkedIn | Twitter | Facebook | Instagram
• SellYourMac.com (SYM) would love for you to sell your old Apple devices so you can get the cash and someone else can benefit from your used device. Use promo code “macman” for a bonus on your trade-in!
• Hashtags to follow
  • #SellYourMac
  • #BrianTheMacMan

Full Transcript

Brian Burke 0:00

Something that’s really hard sometimes for entrepreneurs like myself, you know, all these awards are only focused on the top line there’s no award, the fastest-growing bottom-line kind of gears your head in the wrong direction.

Intro 0:14

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies. So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast where scalable growth using business systems is our number one priority. Now, here is your host, Sam Gupta.

Sam Gupta 0:50

Hey everyone. Welcome back to another episode of The WBS podcast. I’m Gupta your host and principal consultant at digital transformation consulting firm ElevatIQ.

If you ask anyone how to grow a business, their opinions will vary on what differentiates a fastest growing company from the rest. Some would argue that the strategies vary at each phase of growth. Others would say that the need for people, processes, and technologies changes as you grow. While you will get tons of advice, there is no clear consensus on the formula for success. There is no better way of learning from growth than digging into the growth of a company that has been featured in the fastest-growing, Inc 5000 list three times.

Sam Gupta 1:40

In today’s episode, we have a guest Brian Burke from SellYourMac.com, who takes us through each inflection points in his company’s journey, and how the need for people, process, and technology changed at each step of his growth. Since they have accomplished significant growth in a highly competitive business, we touched on their differentiators and what has fueled their growth. Finally, he shares his thoughts on how personal branding and social media has been the main driver of their growth.

Let me introduce Brian to you.

Brian is the Chief Mac Man of SellYourMac.com (SYM), the world’s most trusted and highest-rated Apple trading company. SYM has paid out more than $38 million and has helped over 100,000 customers. Brian loves helping individuals and organizations stay up to date on their Apple products. As a lifelong learner, Brian has become a Sommelier, an Apple-certified Mac technician, a notary public, an ordained minister, and a certified scuba diver. Brian is passionate about empowering underprivileged students through gifting Apple technology. He believes gifting them a man can truly change their lives, their outlook on the world, and their future job prospects.

With that, let’s get to the conversation.

Hey, Brian, welcome to the show.

Brian Burke 3:11

Thanks for having me, Sam. I’m excited to talk to you and all your fun listeners.

Sam Gupta 3:15

And I’m super excited to have you as well because the kind of LinkedIn following you have and the buzz that you are creating based on your personal branding, and the growth of your company, is very exciting.

Brian Burke 3:28

I appreciate that. It’s definitely a fun time, but we need to make sure the growth hits the bottom line. Right.

Sam Gupta 3:33

Amazing. So to start off, do you wanna do you want to introduce yourself with your intro?

Brian Burke 3:38

Sure. I’m known as BrianTheMacMan, because I am incredibly passionate about everything Apple, I’ve been dealing in Apple products now. You know, basically back since college, when I started buying selling phones was kind of the segue into my apple business. And I launched a company called SellYourMac.com in 2009.

I’ve been growing that organically basically every year now. And it’s incredible. We’ve had over 100,000 customers and been able to pay out over $38 million to our customers. So buying and selling a lot of Apple products there. And we’re very fortunate to have focused so much on our customer service, that we are now the number one independently rated Apple trading company in the world. And really just built that through having amazing customer service and trust at every step of the way.

So it’s been fun, and I got a great team around me. You know right now our team is 18 people strong working out of Cincinnati, Ohio. And you know, we’re operating worldwide with most of our focus on the United States. But we will work with anyone anywhere. And really like making people’s Apple trading experience as easy and fast as possible because people want their money and no hassle.

Brian Burke 5:00

And, you know, certainly, we’ve earned some a lot of recognition along the way, you know, you’re talking about growth, you know, we were able to hit the Inc 5000 3 years, you know, our first year was 2015. And then we earned the title again in 2019 and 2020.

So that’s been pretty exciting. And last year, I also was recognized as an EY Entrepreneur of the Year finalist. So that was an amazing accomplishment. That’s something I had focused on, to try to get that recognition that I was doing right in the business and leadership world.

So that was certainly one recognition there, that meant a lot to me. And this most recent year, one of my goals was doing a TEDx talk, to try to spread the word about my gifting of computers, I’m very passionate about gifting Apple products, to underserved students, to really kind of give them the tools to help excel in their lives. You know, I was so fortunate growing up that I had access to technology, and I really want to pass it on to people that don’t have that access. So it’s been a fun part of my journey and look forward to sharing, sharing more about it with you and your listeners.

Sam Gupta 6:17

So what does growth mean to you, and I know you already touched on this a bit, but would you like to expand further in terms of what is growth for you.

Brian Burke 6:26

So growth, for us, it’s been mainly organic over the years, and I don’t have any outside investors or anything like that. So there’s certainly been some opportunities I’ve seen where we could grow faster. But trying to keep it more of a bootstrapped business did keep us to keep our growth down, frankly, many years, and you just certainly the amount of money it takes to buy these Apple products, for instance, and keep that inventory in stock. That’s one of the biggest things kind of holding back the growth.

But I’ve been able to, you know, keep it growing, you know, almost every year. And, you know, this year, in particular, you know, we went into it thinking we’re going to have a lot of growth.

Brian Burke 7:08

And then of course COVID happened, and why there’s a huge demand in our industry for our products, there’s a really a supply shortage, and people aren’t upgrading their computers and devices the same way they were in previous years.

So this year, our growth has been down a lot. And it’s made me kind of rethink what’s important to the company and focusing more on the bottom line. You know, back when the pandemic hit, we kind of really tightened down and got rid of any extra expense that we could.

We’re able to be profitable even while having a much lower top line. So I think that the dynamics of growth, not having the super focus on the top line, actually, you know, can be helpful and try and put more emphasis on the bottom line, which is something that’s really hard sometimes for entrepreneurs like myself, you know, all these awards are only focused on the top line, there’s no award for the fastest growing bottom line. So it kind of gears your head kind of in the wrong direction on some of that stuff.

Sam Gupta 8:06

In a way, I agree with you there. But obviously, the community wants to celebrate the revenue. And it’s hard, right? I mean, getting business is hard. So if you are getting business, the goal is that you can find people like Jim Gitney, and Jim Gitney is the guy, with whom we did a podcast. And if you have not listened to it, I recommend every listener and obviously you Brian, you know, listen to him. He’s a real guy. he has done it.

And he talks about companies at different inflection points when they grow from $10M to $20M to $50M, and how their need for the people process and technology changes. There’s another interview that I would like to mention here is going to be from Wayne Sadin, and he works with a lot of different boards. These guys refer to businesses like you as lifestyle brands. So until you are $25 million dollars, you are actually going to be called a lifestyle brand. Okay, so we are super pumped, super excited to see your growth.

But you know, once you grow that point of a lifestyle brand, that’s when you are going to get the attention of people like Jim Gitney when you are ready to sell your business.

Brian Burke 9:13

I definitely am seeing that the need for process and systems is a lot different, just that our, you know, $10 million levels compared to where we’re at, you know, a few years ago.

So it’s hard, hard to catch up. And, you know, looking at our growth chart, it kind of showcases that it takes like a year for us to kind of catch up with our processes and systems to then allow us to grow again.

Sam Gupta 9:35

So this is what we are going to do growing as part of this interview. Obviously, people, process, and technology are the three pillars that these guys like to touch in the ERP world, in the operations world, in the finance world. We are going to talk about people, processes, and technology in each of the years that you have done business.

So let’s start from 2009 how you were in 2009 with respect to people, process, and technology, then all that is in 2010. And we are going to be talking about, you know, just some take rough brackets there, maybe four or five, maybe from 2009 to 2013, if they were similar, so give me some inflection point in your company.

Brian Burke 10:15

So back in 2009, it was the first year we got an actual building. And before that, we’re operating out of our basement, my basement. So I think a from a pure process standpoint, it was a huge issue that we were trying to carve stuff up and downstairs and what not and didn’t have any great storage facility, didn’t have any high ceilings to put, you know, skids or prod and stuff like that.

So the biggest change for us was simply having the space to allow us to grow. And that’s something I’ve noticed multiple different times, as we get to the other inflection points, you literally are just slowed down on growth by you can’t store enough products. So you’re either trying to sell it too quickly at a lower margin, or you’re not buying it because you can’t fit it in your warehouse. So back in 2009, I think we had about five or six employees at that point. And we were operating at about 2000 square feet.

Brian Burke 11:11

And we were able to operate there for about two years until we moved to our current building. And at the time, you know, we were not using all this space when we moved in, you know, 2011, I guess it would be, but we needed that space to allow us to think about how we could you know, fill up with more product.

So I guess my advice for people in that regard is, you know, to stay ahead of your spatial needs, so you’re not feeling constrained, and you have the room to grow. And every year on average, I’d say we probably add, you know, about one person. And you know, obviously, people were some people, you know, leave for various reasons, which are typically nothing to do with our company, usually, people are going off to get another school degree or, you know, simply moving or something like that.

But we’ve been fortunate to hold on to almost all of our employees because we take care of everyone, and we treat everyone, you know, kind of like family in our business.

So you know, 2012, we moved to the new warehouse right now. And the way it’s set up is we have a front office, and we had a retail store in front. So that was our first time launching this retail store component. And you know, before that people were just walking into our warehouse, so it was much nicer to have a kind of a true retail store, which, unfortunately, it’s just been closed a couple of months ago due to COVID. But that was a big, a big change for us and an inflection point getting the word out there more in the community.

Sam Gupta 12:39

Okay, so we covered until 2012. So I don’t think we covered until 2020.

Brian Burke 12:44

So we’ll keep going. I mean, one of the biggest inflection points probably was 2014-15, I knew I needed to hire some more Apple expertise. So we were able to poach away a couple of the top Apple geniuses from the Apple Store. And we’re basically just offering a better work-life balance. And that kind of small business environment is what these people were interested in at the time.

So bringing them on the team allowed us to, you know, I get a little bit deeper understanding about the Apple products and some of the repairs that we maybe weren’t as familiar with, and just kind of growing our bench there. And those two, those two individuals are still at the company, and, you know, being a tremendous help, frankly, and then, you know, we’ve been hiring more tech every year, you know, maybe about once a year to try to grow the tech team, you know, we have a big focus on repairing things when they come in, that are damaged, you know, we much prefer to sell a working unit than just to sell the parts kind of for the, for the face value.

And you know, even if the parts might have, you know, more money individually, we feel like there’s just such a benefit to getting that working computer to the end user. So that’s been a big focus of ours.

Brian Burke 14:05

And it takes quite a big tech team to get all these things repaired. So while we’re not offering repair service to that many people right now, we’re just trying to repair everything that we get in the house, and we get you to know, I’d say about 70% of our product comes in it can be wiped and reloaded and can be, you know, sold fairly quickly.

But the other 30% you know, might need a new hard drive or a new battery, or something like that to help get it back to the kind of a fully working unit. And we’re calling these units now renewed Mac, which is the name of our ecommerce website, renewedmacs.com, that’s where people can go now to buy directly from us. Make it kind of super easy to you know, find us on the internet and I kind of avoid the eBay and Amazon other channels out there. figured we’d like to go direct to the customer and then the renewed Macs was something that just happened at the beginning of this year.

So that was a big inflection point that’d be launching an ecommerce store. Before that, we were kind of tied down to eBay and Amazon, and just other, you know, bulk sales that we were making. So we really wanted to have our own customer channel there. So it was very important to us.

Sam Gupta 15:12

Okay, did we miss any other inflection points?

Brian Burke 15:16

I’m sure I could talk for a long time about the different changes we’ve made. But those are probably the biggest ones, you know, getting the different warehouses to allow us to scale and just kind of continually adding new team members to help us. Help us keep the growth up.

Sam Gupta 15:29

Yeah, we are going to do the diagnosis of your growth today, Brian. So yeah, we are going to talk about every single detail. Okay, so we started with people, processes, and technology. Right. So you definitely spoke about some the people need there. You spoke a little bit about the process. You also spoke about, you know, the business model, but I don’t think you touched on the technology architecture.

I mean, we are talking about the overall technology need how it evolved. So walk me through from 2009. Maybe you did your invoicing on QuickBooks, maybe you captured your orders on I think you guys have Drupal, right? I don’t know if you are comfortable sharing that with the audience. Can you talk about technology?

Brian Burke 16:17

Back then it was so manual, I mean, we did most of our sales on eBay. So that all came through PayPal, and we use PayPal for our invoicing software. My accountant used QuickBooks, but you know, we didn’t use it. So we were keeping, you know, notes on Excel documents and stuff like that, and just, you know, hitting that stuff over. So there really was no internal system that was running our entire business. But if you fast forward to about 2015, we decided that we needed an internal system.

And we kind of looked in the ERP market. We couldn’t find anything that was quite what we wanted. There were certainly options out there and allow us to inventory and catalog products. And there were some that allowed you to you know, list on certain channels like eBay or lightspeed, and some stuff like that, but nothing that was as customized, that we could connect control straight from the website, our quoting process all the way through to the sale. So after doing a bunch of research, and you know, realizing we could have started with a, you know, an SAP type ERP system, and then had to spend all this money customizing it, we decided, we just go full custom.

Brian Burke 17:28

And we worked with our, you know, current website programmer, and we scoped out the project, and we thought was willing to take about a year, and that taking about four years. So that was huge learning is that software is expensive and very time-consuming. And we were not a software company at the time.

So it was a headache, I guess, for us, you know, kind of learning through that process. But in the end, about a year and a half ago, we launched an amazing new ERP system that is still customized just for our need, and allows us to, you know, really dial in every single aspect of the business, you know, when someone’s getting a quote in the website, our systems pulling all that information in and sending custom messages to them, you know, virtually every step of the way from when they get the quote when they get their shipping label to their shipping information. When it arrives, it tells them and we’ve checked it in, they get another email telling them that we’ve wiped it clean, and then our payment goes out, they get that information.

Brian Burke 18:32

And then in the system, we’re able to move everything through a process that, you know, we’ve really tweaked for exact needs, that it flows the item depending on what it is, and what any kind of issues that might have, you know, either straight to one of our sales channels, or straight to one of our techs to repair it.

And it really allows us to record this information in a way that I hadn’t seen in some of these ERP systems and adding all these new custom fields, you know, kind of as needed has been, you know, really helpful for us. I see some of these issues from other companies or industries when they’re sending over reports. And, you know, they’re kind of hampered by whatever the, you know, fields have dropped out and they have first you know, we’re kind of constantly dynamically changing that.

And as the products themselves change, I see having the customized system, or at least the ability to customize it as a huge win-win for us. You’re just looking at the new Apple Macs that launched this past month, the M1, you know, they’re going to be so different that you’re going to have to have different fields in there to account for these things. So that so I guess at this point, we’re kind of happy we have a customized even though we’re you know, kind of constantly retooling it to make it better.

Sam Gupta 19:47

Okay, interesting in how does the Apple ecosystem works. So are you an authorized reseller and I’m sort of confused with respect to your business model, to be honest.

So my understanding of your business model as you are buying these users Computers and you are, you know, refurbishing them? And again, you know, I don’t understand so I don’t know if I’m describing it well.

Brian Burke 20:10

Well, that is spot on. That is what we do.

Sam Gupta 20:12

Yeah, so you are doing that, I mean, that’s just the refurbishing of your Apple computers. So, 1) is Apple excited about it? 2) how you are different from any other Apple refurbishment shops?

Brian Burke 20:26

Sure. So Apple actually is excited about it. And you might not guess that, but they do like having, excuse me, they do like having these companies in the ecosystem because it helps people buy the new products. And they realize that even though they have a trading platform that they can do it all and certain customers might have different needs.

So having these companies out there, you know, like mine, we’re able to kind of fill people’s pockets with more cash that they can use then go and buy more products. And we’re not Apple authorized. And if we were, we technically wouldn’t be able to sell the new stuff. They only want you to sell the new stuff. We do have Apple-authorized technicians, they call them CMTS, which I am also one of those. And you know, that’s our only true Apple certification. But Apple had a conversation with us. And it’s been friendly. And you know, they said they respect what we do. So that was a nice thumbs up from them.

Brian Burke 21:25

And you know, I kind of see this as a crowded space, because there are so many companies now getting into this, that the way we’re able to differentiate is really through trust and reviews. Like I mentioned kind of the beginning is that we’re the number one most trusted independent trading company. And it’s just taking care of the customers basically how we’ve gotten there. If there’s ever an issue, or just fixing it very quickly, for some of these other companies, you know, aren’t offering as customized communication, and as much help along the process.

So I think just by being always being there, and being super responsive, we’ve been able to kind of get our head above and there are other businesses in the same space. And we also try to offer a great value, there might be some out there that could offer more, but they also maybe they might change their pricing after they get it. So you know our price is set, we’re going to pay that price. As long as you send it in, that’s what you say it was you are good to go. And you’ll get the full amount. And that’s also allowed us to kind of keep that positive review up is that we’ve never scammed anyone.

Sam Gupta 22:34

Okay, so I don’t know what I’m missing here. So let’s say if I’m a consumer, and if I’m trying to sell my Mac, I have two choices. Either I can come to you. And obviously, since you are a growing company, you are probably going to be expensive, because obviously, your fee is going to be there.

Now the other choice is going to be and I’m actually going to bring an example. So let’s say if I’m trying to sell my car, I have two ways of selling my car. Either I can go to a dealer, or I can sell let’s say on Craigslist or, or Kijiji. So why is somebody coming to you and why trust matters so much in this business? Because the only thing I’m trying to do is I’m trying to sell my computer, and I’m trying to get the cashout. So why do you need trust here?

Brian Burke 23:16

It’s mostly about the hassle of you trying to sell it and try to go to these other sales channels. If you don’t know how to properly wipe the computer, for instance, you know, your data security would be a huge issue. And obviously, you’re you know, you’re an enterprise tech guy by background. So I mean for you that’s no problem.

But I’m most of the general consumers, I think are very worried about their security and would much prefer to sell to a trusted party, then sell to someone that they don’t know that they’re going to wipe the data properly and stuff like that. And then from a time standpoint, if you were to list your computer on eBay, for instance, you know, you might spend an hour taking the photos and making the listing another couple hours was fine the questions over the week as the bidding goes on.

Then, you know another hour packing it up and taking it to the post office verse, if you were trading at SellYourMac.com, you would get a label in your email instantaneously. All you have to do is just pack in a box and we’re going to guarantee we wipe it, it’s really hassle-free from that standpoint and you’re going to get great value. It might not be as much as if you sold it yourself. But I think when people consider the time and the hassle that goes into it. I think that’s where it makes the most sense.

Sam Gupta 24:31

Yeah. So basically, you’re making it easy for the consumers and obviously, Apple buyers are going to be you know, slightly affluent category if you will. They make a lot more money than average consumers. So obviously they can afford this, I guess, and the experience that you are providing obviously experiences the big deal here, right. So tell us some of the aspects of the experience that are really differentiated for you at this point in time and why consumers come to you

Brian Burke 25:00

I want to touch on that. But I see one thing first because you mentioned that it’s that very affluent customer that uses apple. And that’s one of the gaps I’m trying to bridge, you know, when we’re selling these products that are, you know, 30 to 80% less, that is allowing consumers to get their hands on, you know, maybe their first or second Apple device, at a price that they can afford the technology and in most cases, you know, get the same use out of it that they would have gotten anyways.

Most people don’t need the brand new, you know, Mac that just came out to get their work done and you know, do their email and photos, whatever they might be doing. So I see what we’re doing as offering to help bridge that gap between potentially the affluent customer and someone that just really wants access to technology.

Sam Gupta 25:44

Yep. Love it. And there is a market for certified cars. I mean, this is the same business model, I guess, in the case of the car industry. So there are going to be consumers who will love it. I mean, definitely, you are serving the need. And obviously, you know, there is no question that Apple hardware is going to be superior to any other hardware out there. I don’t know if anybody is going to argue with that. No, I mean, I argue the experience.

Okay. So we like spreadsheets, Apple does not provide me the spreadsheet. That’s why we are not sold on Apple, I would love to use Apple every day if I could use spreadsheets on Apple. But in our case, for finance people for operations people, there is no way they can use Apple, it doesn’t work. And that is the problem. And the same goes for Google as well. I mean, Gmail is amazing. There’s no question about that. Okay. But it doesn’t work for us. We are in a different ecosystem. So fit is very important. This is what we talk about when it comes to utilizing a system, or utilizing anything, I guess I mean, fit is very important, right?

Brian Burke 26:50

I agree. And I think also keeping that all under one ecosystem, like if you have to use PC because that’s how your business operates. It might not make as much sense to have, you know, an iPhone, because maybe it doesn’t sound quite as well. So trying to keep it all in the same ecosystem is something that I recommend too.

Sam Gupta 27:08

Exactly, so I would guess your customers are going to be primarily in the school community, software firms, marketing firms. They are big MAC users and MAC would make no sense for them to be honest.

Brian Burke 27:21

Yes, exactly. Going after all the people that are using the Apple ecosystem.

Sam Gupta 27:25

Yep, yep, exactly. Exactly. So we were talking about growth, Brian. I don’t know if we have touched on every single point. But I am actually looking to grab the secret sauce that you have, right. So far, you know, the secret sauce seems to be in my experience is number one, your customer experience. And obviously, the branding charisma that you have over LinkedIn passion. So tell me how was BrianTheMacMan born? What was the genesis of that? How did it start? Tell me the story behind that.

Brian Burke 28:02

So it kind of started with the blue suit. And I learned about the blue suit from the orange suit guy who runs an IT business in Cincinnati called Interest. He did a really good job kind of branding himself with the orange suit. And it caught my eye one day and he recommended I go to this website to buy a blue suit. I went ahead and did that. And I took it to my first trade show a couple of weeks later. Everyone was coming up to me to engage in a conversation with me and I wasn’t doing anything.

And the only thing I could point to was the blue suit and people would walk up and just tell me how you stood out because you had the blue suit on. So I kind of knew I was onto something. And I started using it more and more online and you know, pictures and videos and stuff like that, and kind of grown that into a little bit of a personal brand that when I show up online, I’m in the blue suit. And right now if you looked at me, I’m wearing all blue. I have my blue shirt on. I’m not in a blue suit.

Brian Burke 29:03

If we were recording it live, I would have a video I would 100% do my blue suit. So I think it’s being consistent. You know, if I was wearing a different suit color every day, I wouldn’t be that memorable. But you know, picking a color and kind of standing by it has definitely worked for me. And of course, it’s also my company colors so it wasn’t just picked out of thin air. You know, SellYourMac is blue and white.

So those are my you know, kind of two, two colors, you know where the blue suit with a white shirt. It’s very fitting, and I’ve loved blue my whole life so that that easy tie in for me there. So I think he’s just being that being memorable and showing passion. Why having something that’s eye-catching, I think is key. So I think you have to have the combination if I just had a blue suit on but I was super boring and I didn’t engage with people then I wouldn’t work either. So find your memorable outfit and let the passion work is my recommendation.

Sam Gupta 30:01

Yeah. And it’s kind of interesting. I don’t know if you know this guy called OliverTheJewelryGuy. He is good. He’s going to be on every single bus out there. This guy is phenomenal with respect to his charisma, okay? The way he likes to portray himself is he’s a very rich guy, okay, very greedy guy, the kind of, you know, the picture you get by looking at him is, you know, he’s a very greedy guy.

But obviously, you know, when you’re really when you’re rich, everybody wants to come after you because everybody wants to be like you. I don’t know. I mean, if that works or not, but I mean, you know, that does have some sort of magnet there with respect to branding and marketing. So I used to wonder, I don’t know, I mean, if I would ever do that because that is, that is sort of interesting. I don’t know if this guy looks funny, you know, he’s holding this jewelry in both hands. And he is a super, super, super, super magnetic personality. I mean, once you see him, you can never forget him. Okay, so this is a big sales tactic that, that you have.

Brian Burke 31:03

A lot of I know people that go with the flashy look. And it definitely attracts a certain type of audience. I think it depends on what you’re selling. Like, if you’re, if you’re selling a course, that’s gonna make you rich, then if you look rich, I think it helps.

Sam Gupta 31:16

You have to do the right thing. So in this case, I mean, see, if you look at him, you will picture jewelry, I’m telling you, man, you are going to picture. So in your case, let’s say if I look at Blue.

Brian Burke 31:28

I mean, you should be humbled. Because if you appear that you are already, you know, wealthy, then why would someone even care to do business with you? I guess they’re like, Oh, well, he’s already made it, it’s not gonna help him if I work with him. But, you know, for us, it’s like, we have a small business, and we’re trying to support our team members and our families. So it’s like, you know, we haven’t made it yet. And we still do need to keep growing and be profitable in order to help our team out.

Sam Gupta 31:55

So I have a perspective on that. So you know, whether you want to come across as humble versus you want to come across as greedy. Okay, both work equally in sales and marketing. So if you look at, you know, the old, plain old real estate people, they used to be there, I don’t think you would call them humble at all. Right. And, you know, they had to show their richness, the affluence, and if they don’t show, then they were communicating that they were not doing well. And if you’re not doing well, probably you are not smart, that consultant type of position. You know, being a realtor.

Brian Burke 32:30

I think that does make sense. I think it maybe is, you know, industry or, you know, company-specific.

Sam Gupta 32:55

You got to do what you got to do. I mean, see, if you were Microsoft, then I don’t know how many people are going to be buying Apple. So you are doing good, man. All right, brother. So that’s it for today. I think we have the recording for roughly 30 minutes that should be good for 20-25 minutes is what we like to record. Do you have any last-minute closing thoughts?

Brian Burke 33:19

Well, I would love to offer a bonus to all your listeners. And if they want to sell our Mac at SellYourMac.com or any Apple device they have, they can use the code MacMan, one word, MacMan and that’ll give them a $20 bonus when they go to sell.

And also if they went to RenewedMacs.com, they could use the same word MacMan to get a $20 discount. So I want to make sure I can help everyone out there get a little bonus or discount.

Sam Gupta 33:49

Okay, anything else Brian before we close?

Brian Burke 33:53

It’s been a pleasure talking to you. And hopefully, we can help out some of your ERP customers trade in their Apple, and they can upgrade their ERP even more.

Sam Gupta 34:00

Amazing. love it. BrianTheMacMan. It’s very hard to forget MacMan I guess. Thank you.

Brian Burke 34:07

Once they follow me on LinkedIn, they won’t be able to forget I’m in a blue suit every day.

Sam Gupta 34:14

I cannot thank our guests enough for coming on the show for sharing their knowledge and journey. I always pick up stuff from our guests, and hopefully, you learn something new today. If you want to learn more about Brian, please visit, SellYourMac.com. SYM would love to sell your old Apple devices so you can get the cash and someone else can benefit from your used device. use promo code MacMan, it’s MacMan for a bonus on your trading. Links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business, you might want to check other related episodes including the Interview with Sarah Barnes-Humphrey from Shipz, who discusses why LinkedIn is essential for personal branding and community development. Also the interview with Joe Sullivan from Gorilla76, who touched on different aspects of social media, in marketing, and why marketing organizations need to be reinvented with COVID-19.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform or DM me on any social channels. I’ll try my best to respond personally and make sure you get home.

Thank you, and I hope to get you on the next episode.

Outro 35:44

Thank you for listening to another episode of The WBS podcast. Be sure to subscribe on your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Wayne Sadin, who shares his thoughts on forming an advisory board and its importance. He also shares his perspectives on growth implications because of technology misalignment. Additionally, he shares his experiences on digital transformation and digital optimization and why business processes are more than important than individual systems.

Chapter Markers

• [0:00] Intro
• [2:42] Personal journey and current focus
• [5:15] Perspective on growth
• [7:41] The value of having a board for companies
• [12:09] The value of building a board
• [15:26] Why companies may not be using enough technology
• [20:31] Perspective on open source ERP systems
• [25:53] Why ERP systems are difficult to implement
• [36:21] Closing thoughts
• [39:34] Outro

Key Takeaways

• What people tend to miss is there’s also an augmented product. That is every interaction you have with the firm. From the first time you look at their website or the first time, you see the CEO speak. Or the first time a salesperson calls you up through how you get the order fulfilled.
• The purpose of a board of directors of a fiduciary board is to represent the shareholder or shareholders in a public company. And so keep the agent, the management team aligned with the interests of the shareholders.
• if you’re a small company, under say, half a billion in sales, and you’re not wedded to 30-year-old technology that you’re afraid to get rid of, you have a tremendous opportunity to leverage modern technology, with your knowledge of the business and your ability to make decisions quickly.
• The challenge of technology is not about the software if you were to go to Oracle or SAP or Microsoft, and they’ve got, let’s say $5 billion, and I’m not exaggerating, invested in their software, and they gave it to you for free here is all of Microsoft software in a pile on your desk, and you didn’t know what to do with it.
• Every vendor designs their software with a perspective, a point of view. And unless it accidentally overlaps the old product, maybe one vendor with multiple products, you’re going to find that the software runs the way it runs.
• When you’re buying a software package, recognize you’re buying a lot of best practice planning a lot of scaffolding, and tools, but you’re also paying a price for it.

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About Wayne

Wayne Sadin has had a 30-year IT career in several industries, including logistics and Manufacturing. Computerworld named him a ‘Premier 100 IT Leader’ and an Honors Program’ Laureate.’ He is a ‘Top 100 CIO,’ one of ’21 CIOs to  Follow on Twitter,’ a ‘Cloud Global Power 100 Influencer,’ and a ‘Cloud Top 100 Influencer.’ In August of 2020, he was named to the #2 position on the new ‘IT Leader Power 100’ global list.

Resources

• Connect with Wayne
  • LinkedIn | Twitter
• Wayne welcomes questions, discussions, and challenges. Reach him on Twitter & LinkedIn (waynesadin)

Full Transcript

Wayne Sadin 0:00

If you’re a business executive and you’re not comfortable with IT, get comfortable, it is important. We have gone past the point when IT can be an afterthought in most companies.

Intro 0:11

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies. So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta 0:48

Hey everyone. Welcome back to another episode of the WBS podcast. I’m Sam Gupta, your host, and principal consultant at digital transformation consulting firm, ElevatIQ.

If you don’t have experience growing a company, you may make rookie mistakes for which there is already plenty of advice available from senior executives who have been there multiple times and done that. Your growth strategy requires alignment with people, processes, and technology. Having technology experience on your advisory board can set you on a growth trajectory from the get-go.

In today’s episode, we have our guest, Wayne Sadin, who shares his thoughts on forming an advisory board and its importance. He also shares his perspectives on growth implications because of technology misalignment. Additionally, he shares his experiences on digital transformation and digital optimization and why business processes are more important than individual systems.

Let me introduce Wayne to you.

Wayne Sadin has had a 30 year IT career in several industries, including logistics and manufacturing, computer world named him premier 100 IT leader and an owners program laureate. He’s a top 100 CEO, one of 21 CEOs to follow on Twitter, a cloud global power 100 influencer, and a cloud top 100 influencers. In August of 2020. He was named to the number two position on the new IT leader power 100 Global lists.

With that, let’s get to the conversation.

Hey, Wayne, welcome to the show.

Wayne Sadin 2:40

Thank you so much for having me, Sam.

Sam Gupta 2:42

It’s my pleasure. So to start with, do you want to share your personal story and what you are focusing on these days?

Wayne Sadin 2:51

Sure, Sam might be happy to. So my personal perspective, I started out as an engineer working in manufacturing while I was going to school at night for my IT degrees.

When I completed the IT training, I wound up working in it on Wall Street, worked for some of the big financial service firms as a low-level tech person, and ultimately had a chance to move to Texas and become a Head of the Infrastructure.

And then ultimately my first CIO job about 30 years ago. And as I worked in financial services, manufacturing, logistics, distribution, healthcare in a number of other industries, I began to see a theme. Companies were not using technology well, in their business, the technology might be fine, the business might be fine, but they weren’t working well together. So I tend to gravitate towards turnaround situations, troubled situations, companies that just needed help.

Wayne Sadin 3:42

And after doing half a dozen of these in a row and helping sell the company or having it sold out from under me, I eventually decided the answer was to hang out my own shingle and become a consultant in the area of digital transformation, which I define as changing the culture, changing the product, changing the market, changing the customer experience, changing the employee experience of your company.

And digital optimization, which is doing what you do today, but doing it better, and faster, and cheaper. I’m often retained by a CEO, or sometimes by a board, very rarely by an IT person. But I may often have an IT role. And I like to think I work at the intersection of technology and business process.

In fact, Sam my business card reads, when you outgrow your IT strategy, call me. And when I meet a CEO who has outgrown their IT strategy, they see my card and they go, yeah, that’s what happened around here.

So for the last eight years or so, I’ve been working with companies in a number of industries, some manufacturers, some logistics distribution, a little bit healthcare, construction companies lately, helping them define how they want to use technology to advance their business. And that’s a fascinating area. Because it’s not about the tech. It’s about how the executive can understand the tech and use the tech to drive a business agenda.

Sam Gupta 5:15

Okay, so before we dig deeper into your background, and there are certain things that I would like to dig deeper, but one question that I always like to ask all of my guests, and that is going to be your perspective on growth. So in your opinion, tell me what growth means to you?

Wayne Sadin 5:33

Well, growth means to me to satisfy the needs of a group of potential clients. When we talk about marketing, which is where it all starts. People think of it as advertising and making people buy things they don’t want to, that’s nonsense, you got to understand what people want to buy, what people need to buy what people are willing to pay for, and then figure out how to build a product.

And more than a product that delivers, I tend to like the definition of the core product, actual product and augmented product. There is the core product, the thing the customer wants, the problem they want to solve, then there is the actual product, the thing on your price list or in your catalog that you sell, here’s the price, we do this, that solves that problem for you.

And then what people tend to miss is there’s also an augmented product. That is every interaction you have with the firm. From the first time you look at their website or the first time, you see the CEO speak. Or the first time a salesperson calls you up through how you get the order fulfilled.

Wayne Sadin 6:36

How do they live up to their objectives and their promises? And how do they serve you when there’s a problem? How does the billing work? So all of these things are factors in your product? To give an example, that always uses the core product? Or the actual product? Maybe I want to buy a drill? Is that what you want? Nobody wants to buy a drill. What they want to buy is a hole. How do you get a hole with a drill?

So the core product, the thing you want is a hole. The actual product you buy is a drill. The augmented product is how does their catalog look. How easy are they to do business with? Are they the right price? Are they battery power drills or corded drills? How big is the drill? Is it a two-person drill to drill two-foot holes through battleships?

So when you look at this growth is about understanding the need of the customer, the core product, having products that people want to buy the actual products, and not forgetting the augmented product, the whole experience of dealing with your company, which largely comes from your culture, and your people.

Sam Gupta 7:41

Okay, so tell me a little bit about the journey of different companies. And since you, you’ve spent so much time on boards, and some of our smaller customers may not have a board yet.

What is the value that the board brings to the table? And what audience does the board need to have to make sure they are able to grow the way you are describing?

Wayne Sadin 8:07

Sure, Sam, Well, let’s say given my experience. I’ve been on public company boards as an advisor. I’ve been on private company boards. As a fiduciary director, I’ve been on startup boards. So I have a little bit of experience in a number of industries.

And I’ll say this, if you need advice, if you need suggestions, if you need help from somebody that isn’t you’re paid everyday employee, having an advisory board is a terrific idea. I started companies where we had three employees. We had two advisors. I just took a role with a company that’s a startup, they have five employees, and they have 10 advisors.

Our role as an advisor in this advisory board is to help them with their business strategy, to help them with their go-to-market to help them fine-tune their marketing message. And frankly, to use our connections. Who do they who do we know that we can introduce to these folks?

Wayne Sadin 9:00

So the CEO of the company that I’m thinking of is got a tremendous amount of experience, he probably doesn’t need any of our advice, because he’s been so successful. But he wisely took the step of saying, Can I get some smart business people who come from backgrounds different than mine? and have that group advise me, that’s an advisory board.

Let me be careful that when you say the board and don’t modify it, people often think of a board of directors, a fiduciary board, technically. And remember, I’m US-based, there are different terms in different countries. So a public company requires a board of directors and the Board of Director’s job is to look out for the shareholder’s interests.

If you go back in history when you own your own company. Is there any question that you’re aligned with the interests of the owner? No, you’re the owner. You’re in the company every day running the company. What happens when you’re not running the company? Every day you have an agent to run the company as CEO, a C-suite, whatever you call your executive team, now, the owner in a public company, the shareholders are not the same as the people running the agents.

So you get what’s known as the agency problem. How do you know that the agents, the paid people running your company, are acting in the best interest of the shareholders? So in simple terms, the purpose of a board of directors of a fiduciary board is to represent the shareholder or shareholders in a public company. And so keep the agent, the management team aligned with the interests of the shareholders, that gets very complicated. There’s a whole bunch of laws about it.

Wayne Sadin 10:42

But it comes down to two things. Essentially, a board member owes a duty of loyalty to the company that says, as a board member, My responsibility is to act in the interests of the company, not in my own, that prevents me from signing a sweetheart deal with a company to use my consulting company or buy from me as a vendor at some market price.

The other thing they owe is a duty of care. The duty of care says, I actually know enough, I’ve read the material, the board presentation, I know the industry, or I’m learning the industry I know how the company is doing compared to the competitors. And I’m able to offer valid and valuable input into running the company.

And so if you think about it, as a CEO, or as an owner, if you want somebody who can give you advice, who’s been there and done that, you might want one or both of those boards. If you’re planning on going public or planning on even taking your debt public, you’re going to want a fiduciary board.

And in the case of an advisory board, they advise you they do what you ask, they answer questions as you ask them. In the case of the fiduciary board, they have a little more responsibility. But if you’re the majority owner or the entire owner, then they serve at your pleasure as well. So whether you’re a startup, or whether you’re multinational. If you want some smart people that don’t work for you, you can look at having some sort of board at some level advising you at almost any size.

Sam Gupta 12:09

Okay, so let’s say if I’m a manufacturing startup, obviously, having somebody who has done this before, sounds like a great idea. I mean, it is a brainer there. Every founder out there or the owner out there is going to have some sort of questions that they are going to struggle with, and they need to look for advice.

Now, if I’m looking at a startup, and I would like to have somebody in on my board with this experience, number one, what is going to be the price tag. And number two, what is going to be the process of hiring these guys.

Wayne Sadin 12:40

Those are good questions. And I’ve served on a number of advisory boards. I’ve been in some software advisory boards, where they were established companies. And so they got customers and even prospects, who had opinions and thoughts and been around to just advise them really for the ability to help shape the product.

In a startup, I’ve been paid in two ways, sometimes with equity. And if the company has a liquidity event planned, you tend to plan to go public or get acquired, that has value over time, it may be in the form of performance units, some kind of Phantom share, if the value of the company goes up, you will have a claim on a percentage of that value increase just like you might compensate your executive team.

Other small companies use cash, or some companies use a combination. And if you find the right advisor or right fiduciary board member, you want somebody that actually cares about you cares about how your company in your industry is going to perform.

I’m an IT person, I’ve worked in a number of industries. When I look at an invitation to be on an advisory board or fiduciary board. I rarely say Oh yes, this is something I’ve already done. And I know everything.

Wayne Sadin 13:53

I like to know something. But I also use it as a way to stretch my brain as a way to learn new things as a way to see things from a different perspective. So you might be surprised, as a small business owner, as a startup founder, that the people in your community, either your geographic community or your industry community, or just the community of people, you know, might have an interest just from the standpoint of participating and learning and kind of sharpening their tools because it’s easy, especially look at the COVID we’re all probably getting out less, we are all interacting less.

And so for me, the opportunity to join a board recently was fantastic. The company does Human Resources consulting. They do search work. They do succession planning, strategic planning, a lot of kind of soft skill, things that are a little different than what I’ve done for a living, but things I’ve been involved in most of my career.

And so I could bring them kind of a technology perspective. Here’s how technology is changing the world of work, and they would then have people who are Chief Human Resources officers and behavioral science Scientists and psychologists, and I’ve been to only a few meetings because it’s brand new for me.

But I’ve learned a heck of a lot. And so for me, this is increasing my value as a manager, my value as a consultant. And so I’m easily persuaded with the right company and right management team, if I feel aligned with their mission, that it’s a great thing for me to do, from my perspective, not just for mere economic gain.

Sam Gupta 15:26

Okay, I want to go back to one of the comments that you made when you described yourself as companies not using enough technology. And I would imagine that that is going to have some impact on growth. So tell me a little bit more about that. Why do you feel that companies are not using enough technology?

Wayne Sadin 15:45

Well, say and let me say, it’s not that they’re not using enough technology, it’s probably that they’re not using technology enough correctly. The nice thing about being a small company today is the world of the cloud. And the world of it, as it exists today has changed the playing field. Go back 25-30 years ago, when mainframes walk the earth. If you’re a startup, and you need computer power, you couldn’t get it.

There were some time-sharing companies, just a few. But you were hamstrung because the big companies could afford a mainframe or two mainframes in a building they built with a custom staff of people to walk around in white coats supporting it. And I started that way on wall street with very large firms with essentially unlimited tech budgets, and they could pound their competitors into the ground.

Now fast forward to today, I’ll give you a quick example, about 15 years ago, I wanted to use for a client, an AI tool for pricing, they had a very complex product configuration model. And they said we think AI will work for our pricing. And in fact, there was an industry-standard AI package that they could buy.

Wayne Sadin 16:52

So we contacted the manufacturer, and we had to put in a bunch of servers. And we had to put in some special operating system software, we had to buy that software from the company, and we had to set it up and make it all work.

And then we discovered and we plugged the servers and it wasn’t compatible with something else in our system. Long story short, before we put the first pricing test transaction in, we had spent about seven months and about half a million dollars on hardware and software installation and blah, blah, blah.

About 18 months ago, a client said to me, hey, we’d like to try pricing with AI for our product. I looked at the pricing for a number of years. So I said, Okay, you’re a Microsoft Azure client. Let me go to the Microsoft Azure dashboard and see what’s going on.

And I walked around, click, click, click. And I discovered that we could be pricing our products, using a Microsoft AI tool, probably 1000 times more capable, for you’re ready for this $6 a month. For the first few transactions, they give me two months free. And so the next week, for zero cost we were playing with AI-based product pricing. And that’s really what’s happened in 15-20 years. If you are a small company, the advantage of the large company having hundreds of 1000s or millions or hundreds of millions of installed technology base is nullified.

Wayne Sadin 18:16

Because they’ve been building this for five years, 10 years, 40 years, 60 years. And they got this enormous install base, subject to a problem called technical debt we can talk about if we have time. But they’ve got this albatross around their neck, and they’ve got to keep all this stuff fed.

You as a startup though, I like Google. I like Microsoft. I like this SAAS-based ERP system. And you can have it up and running. Because you probably don’t have the politics, because you probably don’t have the global decisions that have to be made in the 100 people in a room.

You can use your nimbleness connected to Amazon, Google, Microsoft, Oracle, Acumatica, Infor, you name it. That the big company can’t or won’t implement. And you can beat them at their own game. You’re sitting on top of about a $50 billion stack of technology that you can buy the drink. I want to sign up for the Microsoft blah, blah, blah, click, click click credit card.

But one of the clients literally Microsoft announced a 50% off sale. If I act by Monday, guess what? We’re going to act by Monday. If you don’t like the Microsoft solution, after you’ve tried it, let’s switch to Google. You don’t like the Google switch to Amazon.

Wayne Sadin 19:31

That is something those big companies can’t do. So if you’re a small company, under say, half a billion in sales, and you’re not wedded to 30-year-old technology that you’re afraid to get rid of, you have a tremendous opportunity to leverage modern technology, with your knowledge of the business and your ability to make decisions quickly. Which modern technology now enables you to beat them at their own game. So it’s not you don’t use enough technology.

In fact, you’re probably if you’ve got technology that’s more than about 10 or 15 years old, let’s say you’re not a startup, you’re probably using some of the wrong technology. You’ve just got to have the knowledge and the guts to be willing to switch from installed base of capital assets to the buy the drink, or the as a service model, and take advantage of technology that’s moving 10 times faster, 100 times faster than everything, anything you’ve ever seen in the old, on-prem, or service bureau software.

Sam Gupta 20:31

Okay, since you mentioned about this $50 billion comment related to the technology, we have this notion, especially in the smaller sized business, the reason for that is because you know, they feel the software development is easy. Since you have so much background in building the enterprise-grade system, I’m pretty sure when you are going to agree that designing an enterprise system is never easy. It’s a very difficult, expensive, and risky job.

So I want to touch on one of the products that we see very commonly in the small to medium-sized businesses called Odoo. Okay, that’s the ERP system. And they are trying to promote the notion of open source. Okay, an open-source idea is great. But when we talk about building the technology, building the custom platform, and let’s say if I’m a $10 million shop, would you recommend me building this? Or would you rather recommend utilizing a SAAS tool that you can buy at a fraction of the cost? What would be your perspective on that?

Wayne Sadin 21:38

Well, Sam says we only have probably half an hour to talk, you’ve asked me to have a two day conversation that requires an understanding of culture, say it is about culture, as a CEO, and a board and an executive team are set the culture of the company, are you an IT company? Do you see that investing in cutting edge makes you better? Or would you rather invest in cutting-edge machine tools or 3d printing, or better customer service, or a better supply chain to some low-cost manufactured area?

So you got to figure out what you want to do and how you want to spend your money. Open source is free. And I’m doing air quotes, we’re not on video, so you can’t see. It is free in the sense that you can get a bucket of code delivered to you by downloading it. So here we go. I download all this code. Now I have 5000, or five, that 5 million lines of code sitting on somebody’s PC. Now what do you do with it?

Wayne Sadin 22:33

The challenge of technology is not about the software if you were to go to Oracle or SAP or Microsoft, and they’ve got, let’s say $5 billion, and I’m not exaggerating, invested in their software, and they gave it to you for free here is all of Microsoft software in a pile on your desk, and you didn’t know what to do with it.

And you were a small company, what would you do? You trip over your own feet, open-source requires you to build an IT capability within the company, so that you can work with the stuff that comes from them.

Because remember, open-source means that nobody is officially getting a profit, everybody’s doing this for the good of the whole, it’s a noble idea. But it means you’ve got to have a labor force and an orientation that says experimentation is good. And that level of it knowledge must be maintained within the company because you’re building yourself. In software, the world breaks down into packaged software, and bespoke software, I can build it myself, or I can buy it. And then with the purchased software, it breaks down into open source or proprietary. And then in both cases, it’s a suite or best of the breed.

Wayne Sadin 23:39

So there’s a relatively complicated decision model that in my view is more aimed at the culture of your company. How do you see yourself? What are your goals? What are your needs for the software? So open source isn’t a bad idea. I have a good friend to work for me on the business side of it for years. And he loves open source.

So when he becomes CIO of a shop, they almost always throw out the expensive stuff from the name company. And they download everything. But he hires 12 programmers. And instead of paying Oracle or Microsoft or whoever, a bunch of money, he pays a whole bunch of programmers to maintain his own code.

Not a bad model, not a good model. It depends on what you want to be. If you’re in the university environment, when you have an unlimited number of free labor, graduate students, people looking for a grade, open-source is terrific. If you’re a proprietary company, and software is not changing quickly. And you’re looking to minimize your acquisition cost and don’t intend to mess with it very much. Maybe open source will work for you.

Wayne Sadin 24:44

If you want to use software to drive process change and be on the business side of this and less concerned as a CIO with did it compile? Is the program working or do I need a patch from Bulgaria that I don’t have? Maybe Want to spend your money by paying Microsoft or Acumatica or in for somebody chunk of money, having them maintain the software, and then you would tweak the business function, and you would build the processes.

Because I say this is a 40 year IT person, the differentiation of the company is not picked by what software you choose to run the company, you differentiate your company by how you pick your processes, how you pick your people, and how you interact with the customer, with the employee, with one business unit, business function business silo to the other.

It’s not something you buy in a box, it’s something you grow as part of your company culture, as part of the way you see yourself and the way you deliver your value proposition. So the answer is all software is equally good. If you don’t tell me the company and the problem they’re trying to solve.

Sam Gupta 25:53

Yeah, I cannot agree more with that insight. In fact, I want to touch a little bit more on that topic from a different angle. So let’s say if I look at the journey of some of the e-commerce shops or the manufacturers when they start, they are going to be starting with a very small system. So the digital capability that they are going to have; might have internal capabilities.

For example, let’s say if they have the WordPress site, or they might have a bit of WooCommerce, they might get to roughly $10 million in revenue. With that capability, they might have, let’s say QuickBooks towards the back end. And now they are at that inflection point where they probably need the enterprise capabilities to make sure their processes are streamlined.

But one thing that they don’t understand is when it is so easy to do things in let’s say QuickBooks in WordPress and WooCommerce. And an intern can probably do that. When when you get to the ERP conversation, everything becomes so bloated. So what is your perspective on that?

Wayne Sadin 26:57

It starts not with what software you picked, it starts with what your processes are, and what you need them to be. So when I talk to customers, we don’t talk about software. Initially, we talk about what they’re trying to do today, what their issues are, where they’re bottlenecks, what do they wish they could have?

And what do they want to see in two years, three years, five years, however, their strategic planning process works. I had a client say to me recently, I was there for about two weeks, and one of the business executives came to me and said, You’re a weird IT consultant.

I said, Oh, really, I was a little offended. What are you talking about? And he said, yeah, you don’t want to talk about technology, you want to ask us what we do? And I said, Well, no, I’m the right IT consultant for you. I’m the one that wants to understand what problem you’re trying to solve and help you solve it.

The answer could very well be QuickBooks, the answer could very well be Excel, it depends on what you’re trying to do. If you work in an industry where management of huge quantities of information is vital. You need an information management strategy.

Wayne Sadin 27:59

If you’re managing a few buckets of very large numbers, who cares if they’re in QuickBooks, I live in Texas and the oil industry, unless you’re a very, very large company can run with very simple software. Because if you’re drilling a well, for example, there’s a lot of money coming through that well, but the accounting for it is relatively simpler than a bank, that for that much volume of revenue may need 100,000 customers.

So you can often get by with simple software. As long as your process works for your business. And your software works for your process, where people get out of whack is they will buy software designed to work one way, and they have their processes working a different way.

And they try to shoehorn the software into their process. The worst mistake I’ve seen customers make is they’ll have an ERP system or now ERP is a fancy term. They’ll have a manufacturing system or inventory system or billing system recover system that works a certain way. And then they get the idea. We want to buy a different product. And they interview the vendor.

Wayne Sadin 29:02

And they discovered the philosophy of the product is different. It sees customers differently, a price is different, it’s very different. And the client then goes to the vendor and says I like your software because it scales better or it’s lower cost per transaction.

But I want it to look like that other product over there. If the vendor says Oh, sure. run screaming from the conversation. Because every vendor designs their software with a perspective, a point of view. And unless it accidentally overlaps the old product, maybe one vendor with multiple products, you’re going to find that the software runs the way it runs.

And so you’re going to be choosing here are the processes that I have today. Here are the processes I think I want. Here’s the software I’m looking to buy, and how does that work together? If I’ve got to change my processes, maybe that’s a good answer. If I’m buying an industry-standard package, and I can implement an industry best practice that might be terrific. Maybe I have a very customized process.

Wayne Sadin 30:03

And maybe I can find vertical software written for my industry that understands my terminology, understands my geography, my nationality, my regulatory climate. And that may be terrific. Or you may decide I’m going to take software that’s good for most things. And then we’re going to put most of our money into rewriting that part or bolting on another product to do that function.

But like I say, you can’t just answer once for the whole industry, or once in general, you’ve really got to come down and say, how well do my processes serve the needs of my actual product? My augmented product? How does it serve my growth needs, what problems might be having, and then you can fix the process. And then you go find software that implements your process, hopefully, or you bolt some stuff together best of the breed to implement your process? Or you may have to write something. But again, I hate to say that the answer is it depends. But there is a little conversation that has to occur.

Wayne Sadin 31:00

And maybe we should talk about this a minute, Sam, even if you’re a small company, there is something called the CIO. I’ve been a CIO, for most of my career, I’ve been a CTO and a CTO, which is Chief Digital Officer and a CIO, there is a strategic conversation that I don’t care if you’re a $20 million company, you should probably have with somebody that speaks business, and technology at the same time.

Who can say I, what I heard you say is X and your M&A strategy in your customer satisfaction strategy, in your employee engagement strategy. And therefore, I think your processes may be adjusted over here on over here, and over here, maybe you’ve outgrown them, maybe the markets changed on you, maybe new competitors emerge, maybe you’re operating in multiple jurisdictions, and all of a sudden, you have regulatory issues you didn’t have before.

So having a little bit of consulting from somebody that can think with your board or your C-suite, and you as the executive, and then guide your IT people, whether you outsource it to a third party to a bar to an ISV, or you have an internal IT staff, or you do whatever.

Wayne Sadin 32:05

Having that strategic alignment discussion will save you an awful lot of time down the road. Sam, I have a rule of thumb, we talked about enterprise software is hard. So I’m going to share a couple of rules of thumb one is mine. What I got from a book, My Rule of Thumb, is that if it costs you $1, to do something in design, it’s going to cost you $10 to do the same thing, once you’ve started the development of that code. And it’s going to cost you $100 to do that same thing after the software is in production if you want to change it.

So that says it’s always better to invest upfront in the design discussion. What are my processes? And what are my needs? What are my systems? How do they align and building that roadmap with somebody that speaks business and it when companies promote a great programmer into this Head of IT job, maybe they’re terrific, if they’re doing it for the first time, they have a lot to learn. But I did it for the first time once too, and I had a lot to learn, but getting an experienced hand and to help you a little bit to mentor your team, maybe money well spent.

Wayne Sadin 33:12

The second rule of thumb is a rule from a book called The Mythical Man Month by a guy named Fred Brooks wrote about 40 years ago, he was the architect for the IBM 360 software packages, which was billions of dollars soft. And Fred Brooks said, if a piece of software that you’re going to run as your programmer, like an Excel spreadsheet, costs you $1.

And you’re going to build a set of them that have to co-operate a software system, a figure that’s $3.03 times the cost. Now, he said look at another way, if I’m writing software that I’m going to run myself, it’s going to be running on my desktop, I’m going to supervise, it costs $1. And then I want to generalize it, so people I don’t know can run it. That’s going to be three times the cost of building the training and the documentation.

And if you want to take the Excel spreadsheet that you ran, and you want to turn that into a bunch of Excel spreadsheets, or a bunch of programs that you sell to people don’t know you personally, that’s three times three times the cost or nine times the costs.

So we talk about complexity, it comes from interaction. It comes from the need for generality. It comes from a lot of things. And so when you’re buying a software package, recognize you’re buying a lot of best practice planning a lot of scaffolding, and tools, but you’re also paying a price for it.

Wayne Sadin 34:28

There may be places, although for most standard business processes, I don’t know where they are, where you want to code your own stuff, where you don’t just want to buy a generic product and use it generically. You need to be able to get that last bit of performance or specificity or customer interaction.

And so it’s worth building very customized stuff and spending the money to maintain it. And that’s again, important. You’ve got to decide where you want to invest, whether you’re building a factory or you’re building a software stack. So it all ties together with the business technology discussion. Technically, that’s known as an architecture for business architecture and technology architecture.

And please don’t think that I’m a small firm, I don’t need architecture, it’s not true. If you’re a small firm, your architecture may take three days to come up with, I have small clients that I can spend a week or two and give them an IT roadmap that lasts a couple of years, I have bigger ones where I’m there for months or even years because they’re just that much more complicated.

Wayne Sadin 35:32

So everything we talk about needs to be thought through for your size, your complexity, and your IT intensity, how much it is in every dollar of your finished product. And so again, those are discussions we can have in detail.

With, you can read it in books, you can go to Google, you can talk to somebody like me or the many people like me in the world. But it behooves somebody at the executive level, to have an IT advisor. And to go back to the earlier discussion, Sam, that might be a fiduciary board, it may be an advisory board, it may be a paid advisor, it may be listening to a bunch of podcasts like this one.

But one way or another, unless you’re an IT person or process person, you really need to think about your processes and your technology with someone that’s been around the block a couple of times,

Sam Gupta 36:21

Oh, my goodness, this conversation is so insightful that I want to go on, to be honest. But unfortunately, we have run out of time. And that’s pretty much what we can cover. Do you have any last-minute closing thoughts?

Wayne Sadin 36:33

Sure? Well, I’ll just say as a last-minute thing from the discussion we had, if you’re a business executive, and you’re not comfortable with IT, get comfortable, it is important, we have gone past the point when IT can be an afterthought in most companies. I don’t care if you’re pouring concrete or forging steel or building an e-commerce product, understanding the technology not to be able to code any more than you want to be able maybe to draw the blueprints or design the circuit.

You don’t need that to be a CEO. But you need an advisor with who you can have that open, honest conversation. This is my concern, this is my problem, this is my opportunity and get feedback back whether that’s a fiduciary board, advisory board, an employee, or some other trusted advisor, it is too important to be an afterthought in almost every company that I’m aware of in 2020 going into 2021. So don’t be afraid of it. But don’t be afraid to have a discussion about it.

Sam Gupta 37:30

Okay, amazing. Thank you so much for your time and insight when it’s super helpful.

Wayne Sadin 37:36

I say I’m always happy to be part of these kinds of discussions. And I’ll just say to the group that’s listening, I’m very active on LinkedIn. I’m very active on Twitter. I’m WayneSadin on Twitter, feel free to engage with me. And I love and welcome discussion, disagreement conversation, because I want to learn, just like everybody else wants to.

Sam Gupta 37:57

Yeah, we are going to be including everything in the show notes, so that our listeners know how to reach out to you.

Wayne Sadin 38:03

Good. I encourage that. Thank you so much. And again, I really appreciate the opportunity to have discussed this stuff with you, Sam, and I hope other people find it useful.

Sam Gupta 38:11

I cannot thank our guests enough for coming on the show and sharing their knowledge and journey. I always pick up stuff from our guests, and hopefully, you learned something new today.

If you want to learn more about Wayne Sadin, you can reach him on LinkedIn or Twitter. His handle on both social media platforms is WayneSadin. links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business. You might want to check other related episodes, including the interview with Jim Gitney, who brings a unique perspective on growth, inflection points, and how the need for people, process, and technology changes at each inflection point. Also the interview with Erin Koss from Syte Consulting, who touches on why culture is an essential ingredient for large-scale digital transformation projects, such as ERP implementations.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform. Or DM me on any social channels. I’ll try my best to respond personally and make sure you get help.

Thank you, and I hope to see you on the next episode of the WBS podcast.

Outro 39:34

Thank you for listening to another episode of The WBS podcast. Be sure to subscribe on your favorite podcasting platform, so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Jim Gitney from Group50, who shares his thoughts on each inflection point for companies and what they need to know to identify them and move to the next by making necessary changes. He also shares his perspective on growth implications if you don’t act or see a doctor timely.

Chapter Markers

• [0:00] Intro
• [2:37] Personal journey and current focus
• [3:44] Perspective on growth
• [4:43] Is growth recommended for everyone?
• [7:19] What is the harvest mode?
• [8:51] $10M inflection point
• [12:04] Implications of not changing at inflection point
• [18:35] $25M inflection point
• [20:44] $50M inflection point
• [25:50] $100M inflection point
• [27:40] $250M inflection point
• [32:09] Closing thoughts
• [35:13] Outro

Key Takeaways

• One of the most important things is that you need to figure out what products and services you are going to add to your current portfolio of products and services. They’re going to take you from $10 or $12 million to 25 million.
• If a $10-$12 million company doesn’t fix people, process, and technology issues required to reach the next inflection point. If they don’t close those operating and strategic gaps, and what’s gonna end up happening is they’re going to continue to struggle to muddle along. They’re going to continue to struggle. And because of those struggles, they won’t be able to grow significantly.
• ERP systems, in general, are a lot of work to implement. And when you’re at $25 million, when you’re at $10 million. You probably don’t have the resources or the ability to do it unless you go to one of the small ERP systems which QuickBooks will tell you they are.
• As you move up through this continuum, and you start moving up, you know, $250 million and $100 million and beyond, technology plays an increasingly more important role in the success of your business.
• Leaders are acutely aware of what’s happened over the last nine months in terms of supply chain disruptions. And so now you’re starting to think a lot more about supply chain risk and supply chain resiliency, you probably have a very formal, functional corporate dashboard.

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About Jim

Jim Gitney is a former operating executive with GE, Black & Decker, and Sunbeam who founded Group50 Consulting in 2004. Jim and his team are strategy, operations, and supply chain subject matter experts working with companies from $10M – $500M in annual revenues to create people, process, and technology roadmaps that will allow them to get through an inflection point and double in size.

Resources

• Connect with Jim
  • LinkedIn | Info@group50.com | (909) 949-9083
• Connect with Group50
  • Website | LinkedIn | Twitter | Facebook | YouTube
• The answers to 10 simple questions will let you know if you are at an inflection point. Reach out to Group50 at Info@group50.com, or call Jim Gitney at (909) 949-9083 to get the questionnaire and find out more about your inflection point.

Full Transcript

Jim Gitney 0:00

Now, if you sit and think about that it’s a little bit like a car that is only running on seven of its eight cylinders, or an electric car whose battery charge is almost gone, you’re not going to easily be able to accelerate to that next level of performance unless you fix those issues. The same thing is in business. We call it an inflection point.

Intro 0:24

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies.

So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta 0:59

Hey everyone, welcome back to another episode of the WBS podcast. I’m Sam Gupta, your host, and principal consultant at digital transformation consulting firm, ElevatIQ.

You may have heard several growth strategies when growing a business. It is not as simple as applying a sales formula or launching an innovative product. The approach for growth changes as you evolve in your journey. Each time you double in size, you hit an inflection point, and the need for people, process, and technology changes accordingly.

In today’s episode, we have our guest, Jim Gitney from Group50, who shares his thoughts on each inflection point for companies and what they need to know to identify them and move to the next by making necessary changes. He also shares his perspective on growth implications if you don’t act or see a doctor timely.

Let me introduce Jim to you.

Jim Gitney is a former Operations Executive with GE, Black and Decker, and Sunbeam who founded Group50 Consulting in 2004. Jim and his team, are strategy, operations, and supply chain subject matter experts working with companies from $10M to $500M in annual revenues to create people process and technology roadmaps that will allow them to get through an inflection point, and double in size.

With that, let’s get to the conversation

Sam Gupta 2:31

Hey, Jim, welcome to the show.

Jim Gitney 2:33

Hey, Sam, thank you for having me. It’s a real pleasure to be on your show.

Sam Gupta 2:37

So to start off, we are going to be starting with your personal story. And a little bit about your current focus.

Jim Gitney 2:43

Great, glad to share it. So I’m an engineer, I have an MBA, I spent 25 years in corporate America with GE Black and Decker, Sunbeam. And in 2004, realized that while I had a very successful professional career, I really enjoyed helping companies and senior leadership teams get through the issues they have as they grow.

And so I started Group50, which is the name of my consulting firm, there are 22 of us, we have backgrounds very similar to mine, all of us have been CEOs, or had C-suite positions during our professional career.

So when we get into a project, we not only share best practices from really well-known fortune 100 companies, but we also have been typically been in the chair of our client as well. So we’re not only subject matter experts, but we are also peers

Sam Gupta 3:44

Okay, amazing. So the next question is going to be that we typically ask everyone. Every single guest that comes to the show. And that is going to be, what is your perspective on growth?

Jim Gitney 3:55

Well, that’s a great question. And you know, having run companies, multi $100 million dollar companies, growth is always the topic of conversation. Because if you’re not growing, you’re stagnated.

Now, there are portions of a company’s life cycle, where the harvest mode, for example, is about taking as much cash out of your business as possible and allowing the company to eventually die on itself.

But that’s a really small portion of the population of companies and leadership teams, they want growth. They want to be able to add more products, more channels of distribution, more customers to their portfolio of products so that they can better leverage their current investment in their infrastructure.

Sam Gupta 4:43

Okay, what do you recommend growth for every single company out there? Or are there any companies that should probably not focusing on growth

Jim Gitney 4:51

Well, as we talked about, as I mentioned earlier, in a company’s life cycle, when they’re in the harvest mode, you’re basically you’ve got to a big company, you don’t see much opportunity in the marketplace, your products are old, you’re not willing to reinvest into new technologies or new products and services.

So you just harvest as much cash out of the company as possible. Let’s talk about growth, which is appropriate for the majority of companies out there. When we have a company, a client, who wants to move from one point to another and significantly grow, there are a whole series of things that they need to do. There are some interesting numbers that have a common relationship. And I’ll share those with you

They are $10M, $25M, $50M, $150M, $300M, $500M in annual revenues. roughly every time a company doubles in size, it hits what we call an inflection point. And that inflection point is defined as that period of time when a company’s systems, technology, backbone, business processes, and organizational structure are struggling to support the current level of business.

Jim Gitney 6:13

Now, if you sit and think about that is a little bit like a car that is only running on seven of its eight cylinders, or an electric car whose battery charge is almost gone, you’re not going to easily be able to accelerate to that next level of performance unless you fix those issues.

It’s the same thing in business, we call it an inflection point. And it’s that point in time where a leadership team inside of a company needs to sit down and do an introspective look at its people processes and technology and ask themselves, where are we straining now?

We call those operating gaps. And what do we need to do in order to be able to go to that next inflection point or double in size? We call those strategic gaps. So at an inflection point, a company needs to sit down and look at its operating and strategic gaps and create a plan on how to close those gaps and prepare itself for continued growth.

Sam Gupta 7:19

Okay, so since you mentioned the term harvest mode, and that is fairly new, personally to me, and I don’t know if it is going to be new for our audience as well. Would you like to touch a bit more on that? What do you mean by harvest mode?

Jim Gitney 7:32

So think about technologies that over the last 20 years were introduced into the marketplace that made products obsolete. So I can think of a couple right off the top of my head, small mainframe computers. typewriters are two examples where those products were very successful. But new technologies such as the cloud, new technologies, such as laptop computers, and desktop computers, came into the marketplace and displaced those products.

So at some point in time became very obvious to IBM and other companies that may typewriters that they were no longer going to have a market or that market was going to be taken over by other technologies. This happens all the time. In today’s tech-savvy world, they needed to sit down and say, okay, we know we’ll have a market for typewriters, we know that that market is going to decline.

So we might as well cost reduce this product as much as we can. We aren’t going to make any more investments, capital investments into the business of typewriters. And we’re going to take as much cash out of this business, the typewriter business, or out of this product line as possible.

That’s what we call the harvest mode.

Sam Gupta 8:51

Okay, amazing. So now, with respect to the inflection point that you mentioned, we are going to touch each of those in sequence. So let’s say if I am a business that is touching $10 million. And I want your help in walking me through or visualizing the processes of a $10 million company.

So imagine if I’m walking with you. In a company where they are at a $10 million inflection point, they are trying to raise to $25 million. So first, let’s talk about how the company is going to look when they are attending and how the processes are going to change when they are going to reach $25M.

Can you help me with that?

Jim Gitney 9:39

Sure. So think about a $10 million business. $10 million is typically up to $10 million, which is typically what’s referred to in the industry as a lifestyle business. It’s run in by one probably one person with some help from a few other folks. It’s run in their head. Perhaps they have a desktop version of QuickBooks, perhaps they have their production schedule on an Excel spreadsheet or their inventory schedule on an Excel spreadsheet.

There are no real business processes in place because let’s face it when you only have two or three people running the business, everybody has to do everything. And now, when you get to that $10 million, if you want to go beyond $10M, and saying I use $10 million as an example, it could be eight, it could be 12, it depends on what the business is. But it’s roughly in that area.

Jim Gitney 10:35

But if I want to move to $25 million, It is going to double in size, which means that I probably need to bring on a couple more people. And what I’m going to need to have some specificity around what those people are going to do in perhaps informal job descriptions.

And I’m going to have a lot more inventory and capital tied up in inventory, whether I’m a retailer or a manufacturer because let’s face it, I’ve got to get to $25 million bucks, not going to have to do a better job of managing the amount of capital, I’m going to have tied up in inventory.

So perhaps I now start thinking about an MRP system, a simple MRP system that perhaps bolts onto my QuickBooks, or my QuickBooks Online. So that what I’m doing now, in order to go from $10 million to $25 million.

I’ve got to put some additional processes in place business processes, I have to add a couple of people. I have to add some more technology. And one of the most important things is I need to figure out what products and services I’m going to add to my current portfolio of products and services, they’re going to take me from my $10 or $12 million to 25 million. So what I’ve just described is an operation or business that is run by one or two people with loosely defined processes and procedures, and technologies in their business, the things they need to do in order to be able to go to 25 million.

Sam Gupta 12:04

Okay, so before we get to the next inflection point, I would like to understand the implications. Let’s say, if I’m at the eight to $10 million, to $12 million range that you mentioned, with respect to that inflection point, let’s say I don’t change, I’m not gonna change. Okay, what is the implications if I don’t?

Jim Gitney 12:23

Well, when you get to an inflection point, you typically begin to realize the following things or see the following things, you typically begin to see weakening financial performance, because you’re not as crisp about the things that you’re doing.

There are skillset gaps inside your organization, somebody is not doing what they’re supposed to be doing. There are operational issues, perhaps you don’t have inventory to satisfy the orders that you need, or someone forgot to order inventory. And you all of a sudden find out that you’re out of goods, your technology gaps exist in the organization, because you have a spreadsheet here, spreadsheet there, what that means, and communication issues are an issue or a problem.

And these things exist at every inflection point. But let’s just talk about that $10-$12 million company, if they don’t fix those things, if they don’t close those operating and strategic gaps, and what’s gonna end up happening is they’re going to continue to struggle to muddle along, they’re going to continue to struggle. And because of those struggles, they won’t be able to grow significantly.

Sam Gupta 13:31

Okay. So again, I think before we discuss the next inflection point, I want to touch a bit more on the weakening financial performance that you mentioned.

So when I’m talking to let’s say, my small customers, the majority of them seem to be happy. Obviously, they want to improve, but they don’t necessarily understand if their performance is really weak.

So can you put this thing into perspective? Or maybe Can you share the story so that my audience can relate to what weakening of the financial performance means?

Jim Gitney 14:06

Sure, absolutely. I will. So I’m going to share a story of a $16 million company, a client of ours that hit an inflection point, what were the kinds of things that they were saying, well, as they were at got up to $16 million. So they started struggling with their inventory accuracy, they’d inventory everywhere.

Some of it wasn’t properly marked, some of it was obsolete. And so as a result, they’re from a balance sheet perspective, their performance was deteriorating because they had too much cash tied up into inventory that they couldn’t use. And because they weren’t managing their inventory, well, they ended up their service levels started to deteriorate. They weren’t any longer shipping their orders on time, in full like they had been when they were at $10 and $11 million.

So what happened was they kept growing. But because they didn’t do anything about their core systems, people, processes, and technologies, they started struggling, and they started losing orders as a result of it.

People were canceling orders. And so here, they’ve got more inventory, they’ve got more people, they’ve got more assembly lines, and they’re now starting to lose orders. So in this particular case, they lost both their financial performance weakened, and both their balance sheet and their income statement, and their gross margin performance

Sam Gupta 15:33

Okay, so with respect to the weakening of financial performance, let’s say, I sort of know that I have a problem. But I don’t know if I’m ready to see the doctor yet.

So canceling the order could be one problem. But are there any KPIs that could help me understand when my financial performance is going to rethink and perhaps I should probably see a doctor and make changes to people process and technology here?

Jim Gitney 16:01

So, there are a bunch of important KPIs here. You know, of course, you have your financial covenants. So if you have bank loans, a revolving operational revolver, or you have bank loans, it’s likely that there are KPIs, the bank is going to monitor to make sure that their loan doesn’t get in trouble.

And so you’ll see those numbers begin to deteriorate, and begin to drift downward or upward, depending on what the covenant is, toward that inflection point, a point where the bank is now going to take notice and say, hey, we need to find out, we need to ask a few questions around this number could be a quick ratio, it could be a leverage ratio could be any number of KPIs that banks hold their customers to.

Now while those are important, very important, because that has an impact on your cost of capital. One of the things that I look for is gross margin deterioration. So whether you’re a professional service provider, or you’re a manufacturer of products, gross margin is incredibly important.

Jim Gitney 17:08

And the gross margin for people who might not know exactly what it is is basically the money you have left after you pay your bills to manufacture your product or provide your service. So I look at the gross margin and attempt to understand what that performance looks like. And if gross margin is deteriorating, let’s say I used to be at 42% gross margin. And now all of a sudden, as time is going on, I see it going down into the 20s, I probably need to start thinking about calling the doctor.

The other KPI that’s important to me on this one is the percent of SG&A as a percent of sales. Because SG&A loosely defined as that bucket of overhead costs, you have to put into your business in order to support sales, marketing, General administration, just what an SG&A stands for costs.

And depending on what kind of business you’re in, you know, your SG&A for a healthy company could be 10% to 12% for a manufacturer, and it could be 18% to 20% for a technology company. Just depends on what industry you’re in. But from my perspective, I don’t care. I want to see what’s your SGA percent of sales historically? And what is your projection for the future? If you have gross margin going down, and you have SG&A going up, then it’s probably time to call a doctor.

Sam Gupta 18:35

Okay, that’s an amazing insight there with respect to calling the doctor and I think the audience needs to know about that. One more thing related to the $25 million inflection point that I wanted to touch on. You mentioned that perhaps at the $25 million levels, they would probably require an MRP system that is going to be an add-on over QuickBooks.

Do you have any thoughts with respect to the implications of using an add-on off QuickBooks versus using a smaller ERP system?

Jim Gitney 19:05

It depends on what your business needs are, Sam. ERP systems, in general, are a lot of work to implement. And when you’re at $25 million, when you’re at $10 million. You probably don’t have the resources or the ability to do it unless you go to one of the small ERP systems which QuickBooks will tell you they are.

But most small companies start out on QuickBooks and then graduate to some type of ERP system. When they get to that $25 million inflection point. So at $10M, they’re going to bolt on a couple of things because it’s easy to do. They don’t have the resources available to support it properly. And so it’s $25 million now.

When you’re at $25 million things are stretching even further, being strained even further. You now have a couple of decisions you need to make if you want to go from $25 to $50 million. The number one is you need to look around who on your team and see if there’s anyone who has any experience of running a $50 million company, or anyone who has actually grown a company from $25 to $50 million.

And you have to take a closer look at the how your product roadmap product and services roadmap to try and figure out how you’re going to get to that $50 million marks? And what channels of distribution you need to be in? How are you going to sell it? What type of sales organization you need, how much marketing is required to do this? And then you take a look at your technology backbone.

Sam Gupta 20:44

So you mentioned that having the experience of running a $50 million company is absolutely essential at the inflection point of $50 million.

Jim Gitney 20:53

Yeah. So what we found, so let’s go back to this $16 million example I was using earlier, this client that we have, they had a really great group of people, very, very talented people, but they’d never run a business size before.

And so they were making a lot of obvious mistakes, making decisions that were hampering their ability to be able to move to $25 million, and then on the $50 million, because they didn’t have that experience.

And so you as you want it to move to your next inflection point, you need to stand back as a leadership team and say. Okay, if I’ve never run a company this size. Or I’ve no one in my business, who’s run this size, where do I get that experience?

Jim Gitney 21:41

Do I go out and find somebody who has run a $50 million company, or perhaps do I put together a small group of advisors, and that’s typically what I recommend Sam put together a small group of advisors of people who have run $50 million companies, people who have grown to that $50 million range, and allow them to provide you as the leader insight to the things they should be thinking about in order to move to that next inflection point.

And when you go from $50 million to $100 million, and the next inflection point, it’s, it’s equally, it’s more complex than the previous one. And so now you have to be much more aware of the types of things your business needs to do, your technologies need to do in order to support that growth. So it’s a combination of hire somebody, or surround yourself with a group of advisors who can help you get there.

Sam Gupta 22:39

Okay, so give me a bit of tech at the, at the $50 million levels. So at the $25 million, you mentioned that probably QuickBooks with the MRP add-on, could be one way to go at the $50 million, how is the tech architecture or the landscape is going to look for that company.

Jim Gitney 22:59

So when you get to $50 million, or as you’re moving up to $50 million, if you didn’t think about it, you’ve got a lot more customers. You’ve got a lot more customer service work you need to do. You’ve got a lot more marketing and advertising than you’re doing.

And of course, it’s dependent on what kind of business you’re in each industry is going to be different in each industry group. But here are the types of things that you’ve got to be aware of, as you move to this at $50 million. Your core costs are probably somewhere in the $30 million range. What do I mean, I’m talking cost of goods sold, and you’re probably spending $10-$15 million or so on SG&A related activities.

That’s a big spend. And that’s a lot of spending to a lot of different vendors. So you need to have a strong MRP system that allows you to manage your accounts payables and receivables very well and very tightly that allows you to get the kind of financial reporting you need to tell you how well you’re really doing.

Then you need to start talking about sales, inventory, and operational planning, you need to talk about what kind of technology systems do I need for my market-facing activities, CRM, for example, I need to manage drip campaigns to my end users on the internet. Or I need to communicate with them on a routine basis.

Jim Gitney 24:28

I now need to start asking myself questions. Do I need 24X7 customer service and as I move up to the $100 million dollar range, those questions and those issues become much broader and need to be managed much more closely.

Because now you have way too many parts to manage it in your head or on spreadsheets, way too many moving parts and so used to be back when I started my career Sam technology if I looked at the three bubbles of people, process, and technology. The business process bubble was big. The people bubble was big. And the technology bubble was really small.

Today, technology is the largest bubble of those three. And all of our businesses are all businesses are now need to be fully integrated, not only internally, with the appropriate reporting systems, data layers, and those kinds of things, but also they need to be integrated with a lot of external systems, CRM, Shopify if you’re selling on the internet, or maybe it’s Amazon Web Services, or maybe it’s your bank.

So technology, as you move up through this continuum, and you start moving up, you know, $250 million and $100 million and beyond, technology plays an increasingly more important role in the success of your business.

Sam Gupta 25:50

Okay, so let’s say if we are going from $50 to $100 million dollars, what is going to change with respect to people, process, and technology.

Jim Gitney 25:57

So in the $50 to $100 million, you’re now starting to talk about things that more companies that are beginning to mature are thinking about, so your human resource activities are now going to be much more formalized, you’re going to have a human capital focus because let’s say $75 million, you probably have, oh, I don’t know, 100 people, 150 people, potentially 200, depending on what industry you’re in.

And so that’s a large group to manage. So now you have to talk about having an HR is system human resource information system, you’re going to need to talk, you’re probably starting to think about the $100 million dollar range, you’re now starting to think about formalizing your board of advisors, you’re developing more sophisticated supply chain programs, you’re doing more integration of your systems.

So now I don’t have spreadsheets all over the place, I’m actually doing all of my purchasing and managing my inventory on an MRP system. And perhaps it’s now an ERP system that has an MRP module, and a financial module, and a cash management module, and perhaps modules around AR and AP, and probably integrated shipping.

And it’s talking to a CRM because I’m managing the relationship in my market-facing activities through some type of CRM. So those are the kinds of things we’re now starting to become more sophisticated in our business processes more sophisticated and how we manage human capital and much more integrated systems throughout the entire business.

Sam Gupta 27:40

Okay, so what is the next inflection point is it going to be $250M?

Jim Gitney 27:44

So typically, we talk about $250 million. Okay. Now, depending on when you started, and how long you’ve been in business, you’re now going to have a fully integrated ERP system. You’re now implementing more formal strategic planning and strategic execution processes.

You’re maturing your market effectiveness programs. And what do I mean by market effectiveness? It’s all your market-facing activities. You now have formal systems around product roadmaps, service roadmaps, you have much more formal systems around sales and marketing activities, a fully implemented CRM, and fully implemented programs for the various channels of distribution, you’re probably now gotten to the point where the half a dozen or so critical people inside the organization are now on some type of long term incentive program because you need to keep them, you’ve probably begun to more formally begun the process of succession planning

More formally, cybersecurity has now become a much bigger issue, because now you’re probably up in the 250 to 300 people or 200 to 300 people depending on your business.

Jim Gitney 29:00

And so now you’ve got laptops all over the place, you’ve got integration, both internally and externally, you’ve got web interfaces into your system. So cybersecurity now becomes a much more important issue. And you have to think about how you’re going to train all of these people to not click on a phishing email, for example.

Now, you should be doing that across your entire business no matter where you are in your growth cycle. But the reality is, as you get to this kind of size, you can now more easily afford to be more formal about these types of things.

You’re probably talking about a very mature supply chain, and strategies and programs. But what’s really more important here on the supply chain side, is it a $250 million, you probably have vendors all over the world. And so now you need to start thinking about what kind of risk you have inside your supply chain, and of course CFOs and supply chain managers and operators

Jim Gitney 30:00

Leaders are acutely aware of what’s happened over the last nine months in terms of supply chain disruptions. And so now you’re starting to think a lot more about supply chain risk and supply chain resiliency, you probably have a very formal, functional corporate dashboard.

Now we have a client who is at $280 million. Right now, we did their strategic plan for the last year, well, we facilitated them doing their strategic plan, and we’re working with them on executing that strategic plan. And their goal for this year is by 2025, to be at $440 million. Now, that’s going and they’re at an inflection point.

Jim Gitney 30:43

Now, their ERP system, the ERP system that they have, is no longer doing the kinds of things it needs to do is 15 years old. And we’re going to have to work with them to look at what are the new ERP systems that they need to put inside their business that is going to automate more of the back office functions that are going to do a better job of reporting through the various data layers that are going to help them be more user friendly in terms of integrating with CRM, and defining what the where the records of truth reside, such as account management with customers.

So when you, when you go from the $250 million to the $500 million range, you have a whole new set of questions around how do I structure product management? How do I structure my product development organization?

Where do I get the capacity inside my supply chain in order to be able to double in size again? So those are the kinds of things that we look at when we’re talking about moving from that 250 million to $500 million inflection point. And those are the actual conversations we’re having with this client right now.

Sam Gupta 31:58

Okay, did we miss any inflection points that you had?

Jim Gitney 32:01

Well, once you get above $500 million, and you’re moving on, it’s a whole new world out there. So but I think we’ve got the basic ones covered, Sam.

Sam Gupta 32:09

Yeah, that’s amazing. I think the kind of insight you have, I can probably spend an hour touching on each of the topics that you mentioned. So obviously, that’s going to be a very long conversation.

But we had a very limited time for this show. So I really want to close at this because of the time, do you have any final closing thoughts?

Jim Gitney 32:29

Most of the work that we do is with companies who had inflection points, and leadership teams who realize that they don’t have the experience and insight, and knowledge. They need to not only fixed the struggles, existing struggles in their business, but to prepare them to be able to move to that next inflection point, and especially in smaller companies, this decision is even more difficult because now if I’m a founder, I grew my business to $10 million.

I know how to get it to $25 million. Right. It’s difficult for founders and people who are really successful entrepreneurs who don’t have a corporate background to be willing to admit to themselves or their team that I don’t have the experience to move to the next level and are willing to and realize that by admitting that it’s not a failure on their part. It’s actually brilliant on their part. So I’ll just leave you with that thought.

Sam Gupta 33:27

Yeah, I could not agree more with that. I think recognizing talent is going to be one of the assets for any founders out there. So thank you so much for your insight, Jim, I really appreciate your time, as well as insight. This has been super fun.

Jim Gitney 33:40

Sam, you’re welcome. And thank you for inviting me this has been a blast. It’s obvious that I love talking about this subject. So I would more than welcome any of your listeners who want to talk further to let me know.

Sam Gupta 33:54

Thank you so much, Jim. I cannot thank our guests enough for coming on the show and sharing their knowledge and journey. I always pick up stuff from our guests, and hopefully, you learn something new today.

If you want to learn more about Jim or Group50, please visit Group50.com or reach at info@Group50.com. Links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business. You might want to check other related episodes, including the interview with Wayne Sadin, who brings a unique perspective on why business processes are more important for growth than individual business systems. Also, the interview with Erin Koss, CPA from Syte Consulting, who touches on why culture is an essential ingredient for growth transformation project such as ERP implementations.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform, or DM me on any social channels? I’ll try my best to respond personally and make sure you get help.

Thank you, and I hope to get you on the next episode.

Jim Gitney 35:13

Thank you for listening to another episode of the WBS podcast. Be sure to subscribe on your favorite podcasting platform so you never miss an episode and for more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Ram Krishnamurti, who discusses costing strategies for different businesses and why that matters for ERP implementations. He also breaks down some of the ERP concepts for executives who may not be familiar with ERP or ERP implementations.

Finally, he shares some secrets into what makes ERP transformation projects successful and who would be the right fit to consider an ERP if they have never had one.

Chapter Markers

• [0:00] Intro
• [2:48] Personal journey and current focus
• [4:41] Perspective on growth
• [7:27] What is an ERP system?
• [12:21] Which companies are the right fit for an ERP?
• [14:26] Implications of having these duplicate records across the systems
• [19:01] Why is costing important for manufacturers?
• [23:49] Different costing methods and their implications
• [30:20] Closing thoughts
• [31:20] Outro

Key Takeaways

• An effective ERP implementation will force you to look at these inefficiencies.
• Over the last 10 years, ERP technology has also changed and the cloud has come in a big way.
• A perfectly properly implemented ERP can give you data and insights that you never expected to see.
• ERP helps you to focus. It helps you to do focus less on your back end process and focus more on your operations and the sales and the marketing part.
• Disparate applications having different views of the same base data is a major challenge, which you will be facing if you are a disparate set of disparate systems running your organization.
• In commodity industries, weighted averaging will not work. For these industries, you need to have a different costing method, which is called batch costing, or lot costing. That is somewhere between specific costing and FIFO. It’s also an averaging method. But you’re averaging cost at a lot level.
• In most of the other industries, especially manufacturing, the weighted averaging cost will work fine. Either a transaction weighted averaging as in discrete. Or a batch weighted averaging as, as in process industry.
• Standard costing is very, very complex, and it has a lot of P&L impact.
  

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About Ram

Ramaswamy Krishnamurti (Ram) is a Passionate ERP Project Manager and Solution Architect with over 32 Years of the overall experience of which in the last 21 years he has worked in all areas of ERP Implementation starting from Product Selection, Vendor Evaluation, and Selection, Presales, Implementation, Upgrade and Support, and Stabilization. A graduate in Mechanical Engineering from Calicut University in Kerala, India, Ram did his MBA from Kolkata University and Post Graduate Diploma from the prestigious Indian Institute of Management, Bangalore.

He has implemented more than 25 highly successful ERP implementations. He has worked on Scala, Peoplesoft, Oracle EBS (11i and R12), and Oracle Fusion Cloud in various roles including CIO, Program Manager, Delivery Manager, Project Manager, Solution Architect, Functional Lead, and Consultant. One thing common among all these roles is an average customer satisfaction rating of more than 90% over his over 20 years of ERP Implementation expertise.

Ram is an expert in implementing ERP Costing Solutions for different industries including discrete and process manufacturing, Jewellery, Pharma, and FMCG industries. In his career spanning over 30 years, he has implemented different costing solutions ranging from Specific Costing, FIFO, Average Costing, and Standard Costing.

Resources

• Connect with Ram
  • LinkedIn | Ram’s Blog | Ram’s Book: Selected Articles on ERP

Full Transcript

Ram Krishnamurti 0:00

An effective ERP implementation will force you to look at these inefficiencies. Your implementation could be a huge eye-opener that, oh my God, we had so much data misalignment in our organization. No wonder, we are having so many challenges and so many internal disputes.

Intro 0:16

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies.

So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta 0:52

Hey everyone, welcome back to another episode of the WBS podcast. I’m Sam Gupta, your host, and principal consultant at digital transformation consulting firm, ElevatIQ.

When it comes to growth, the growth could fire back if you don’t have sufficient margins to sustain a business. If you have a busy shop floor with several variables that go into making your products, tracking your product’s cost could be critical. There are several methods of costing which could vary across industries. Choosing an appropriate costing method could drain your profitability and mislead you into making incorrect business decisions that could jeopardize your business.

In today’s episode, we have our guest Ramaswamy Krishnamurti who discusses costing strategies for different businesses. And why that matters for ERP implementations. He also breaks down some ERP concepts for executives who may not be familiar with ERP or ERP implementations. Finally, he shares some secrets into what makes ERP transformation projects successful and who would be the right fit to consider an ERP if they have never had one?

Let me introduce Ram to you.

Ram is a passionate ERP project manager and Solution Architect with over 32 years of overall experience. He has implemented more than 25 highly successful ERP projects in several roles, including CIO and consultant, with an average customer satisfaction rating of more than 90%.

Ram is an expert in implementing ERP costing solutions for different industries, including discrete and process manufacturing, jewelry, pharma, and FMCG Industries. He’s also a published author for his book Selected Articles on ERP.

With that, let’s get to the conversation.

Hey, Ram, welcome to the show.

Ram Krishnamurti 2:45

Thank you, Sam, for having me on the show.

Sam Gupta 2:48

It’s my pleasure. And I’m super excited to discuss your expertise today because you have done a ton of ERP implementations. So to start off, would you like to share your personal story and what you are focusing on these days?

Ram Krishnamurti 3:02

Sure, I have over 30 years of the overall experience. Out of that about 11 years in manufacturing. And for the last 20 years, I’ve been implementing ERP.

When I say implementing ERP, I’ve been going to the customer’s places, I’ve been doing the implementation, doing upgrades, everything relating to implementation. I’ve not been doing a lot of pre-sales or delivery management. It is the pure customer-facing implementations I’ve been doing. I’ve been doing it for the last 20 years. I have implemented end-to-end business solutions, including procurement, inventory, manufacturing, order fulfillment, financials, budgeting, and components accounting.

So I have a breadth of experience in ERP accumulated over the last 20 years. Just recently, I completed one project in Oracle Fusion Cloud. So I was the project manager and we got, you know, 100% customer satisfaction for that project.

I do a lot of blogging. I am very active on LinkedIn, I offer free training, and sharing my knowledge with a lot of, you know, consultants were up and coming. So, so far done over three sessions. And all of them have been quite well received.

And presently, I’m also focusing on new technology because I believe that this coming decade, the decade of the 20s is going to be that of technology. So there are about 20 technology themes and ideas that are going to drive the technology agenda for the coming decade, coming 20 years. A multi-decade of changes is going to happen in technologies. I’m trying to learn a little bit about all these new technologies and at the same time blogging about them.

Sam Gupta 4:41

Okay, so since this is the growth podcast, and this is the question that I ask everybody Ram. Tell me what is your perspective on growth as far as the small to medium-sized businesses go?

Ram Krishnamurti 4:52

That’s a very interesting question. Most of the small to medium-sized companies are still hesitant to go on ERP, they still think that the ERP, some esoteric product, which you know they won’t be able to handle on their own probably. And they don’t ERP see right now what we are seeing is technology has moved beyond the ERP. But even now we see many other small and medium segments that hesitating to move to ERP.

But over the last 10 years, ERP technology has also changed and the cloud has come in a big way. ERP implementation in case you want to move to your ERP. It is much more noninvasive than you know it was earlier a bit on-premise. You have to have a lot of investment and all that, a whole lot of changes have happened.

And then you talk of growth in a growing company that needs a good ERP backbone. That is my perspective. But having said that, I understand there’s a lot of hesitation because they also see a lot of challenges in implementing.

Ram Krishnamurti 5:58

But that’s where good consultants and implementation partners come in. They can bring a lot of value to the organization. And a perfectly properly implemented ERP can give you data and insights that you never expected to see.

For example, when ERP was implemented for a company I worked for, they found that in one of the processes. It’s again just one process. They were able to get a huge amount of monthly savings. And this information was available to them only because of the digital ERP. They would never have known that such inefficiencies existed.

So ERP helps you on an obvious scale. When you are going to scale up as a part of your growth, you need ERP support. ERP helps you to focus. It helps you to do focus less on your back-end process and focus more on your operations and the sales and the marketing part.

So a good ERP automatically is like Google Assistant. It takes care of the back-office operations so that you are free to focus on your business growth activities. So that’s the main area where the ERP helps. In summary, it is my considered opinion as an ERP consultant that going forward for growth to accelerate the traditional approach to IT will not work. You need to have a transformative approach. And your ERP has to be the backbone of that transformative approach.

Sam Gupta 7:27

Okay, so obviously, you know, some of our listeners are going to be extremely familiar with ERP systems just because they might be slightly bigger in size. The smaller-sized businesses might not be as familiar with that.

In fact, there is varying opinion in terms of what an ERP is. Some people think that it is an accounting system. For some people, it is the MRP system. For some people, it is an order management system. So in your opinion, what is an ERP system and I know you have touched on the benefits of the ERP system, but let’s say if I’m trying to explore an ERP, how would you describe an ERP to me and for my company?

Ram Krishnamurti 8:11

Sure, if you look at a traditional organization, it has different departments which are running silos of operation. I’m sure that every one of your customers would have heard the term silos of operation at some time or other, but silos of operation are a real thing.

You know, you have procurement departments sitting in one location, stores in another location, finance, and accounting in another location. And they don’t talk to each other. For example, the purchasing department raises a purchase order and then sends it to the finance department and a copy will go to the stores’ department. But the store’s department will not have a back communication to a procurement saying that as we have received your document. And then once the material is received, the procurement department will not get any information that the material has been received and everything is perfect.

Ram Krishnamurti 9:00

So that you know you can negotiate with the vendor, ask him to send the invoice. Whatever so this communication is not there. Due to the lack of this communication between various departments, there is inefficiency in the entire process of your organization. There is an increase in vendor disputes. Vendors will talk to different agents. The vendor will talk to the procurement department. Some other contact vendors will talk to the store department. Some third guy will talk to the accounts department.

So, there is no integration in either communication, or in processes, and even in systems. Many organizations will have some systems, maybe Excel, maybe some other system, which, they will be using for each of these processes.

Each of these systems will also be you know, disparate. Like you have an accounting system. You have a procurement system. You have a warehouse management system. So these are all disparate systems you will have in your organization and the disparate system will clog your data. Because they may have the same vendor may exist in both the finance and accounting system as well as in your procurement system.

Ram Krishnamurti 10:07

So there is data duplication. There are multiple sources of truth. And all these things cause inefficiency in your organization. And what do you need to overcome this? You need a single application, which will integrate your entire processes, which will act as a single source of truth, which will give you overall visibility into your processes, end to end process, starting from the requisitions, all the way up to your GL and the financial reports and cash flow statements.

So this if you have this application, it is a single solution for your entire business operations. And that is obvious if you have multiple systems and you’re struggling with it, you can easily visualize your customers can easily visualize the benefit of a single system, a single integrated system with a single source of truth. You imagine the number of disputes that will come down within your organization. There will not be the fights between procurement store and finance will come down across the organization and with your partners. Vendor disputes will come down. Customer disputes will come down. So entire process efficiency will have a jump start with an ERP system.

Ram Krishnamurti 11:22

So if any of your customers are still thinking that they want an ERP system, my answer is unequivocal. Yes, they need, they will need an ERP system, especially if they’re in the manufacturing area. I’m not talking here about any specific system per se. You need a well-configured ERP system to run your business.

That is you know, at this point in time, that is like having a mobile phone. Everybody has a mobile phone. So every company should have an ERP system. It’s not any longer a luxury. It is more of a necessity and a need for efficient operations these days. So that will be my response to your customer who says that I don’t know your ERP. So in summary, ERP helps you integrate your processes, replace disparate applications within a single application and improve your end-to-end process efficiency and visibility.

Sam Gupta 12:21

Okay, you just mentioned that ERP is going to be like having a mobile phone, which is great, but do you believe that every company out there, irrespective of how large or small they are needs to have an ERP?

Ram Krishnamurti 12:35

Yes, 10 years ago or, you know, five years ago, if you asked me this question, I would have said maybe. Yes. No. I would have been iffy, but now I am not iffy. I’m saying that technology has moved further much further ahead.

So now, ERP is no longer an esoteric technology. ERP is one of your you know basic necessities for any organization whatever is the business they are in. You will need an ERP. Data is a key you know in this in these times and data visibility data intelligence data analysis, taking out useable information from the data.

These are all the focus of the companies that focus on the companies should shift from Okay, whether my work order has been created properly, whether my MRP is running properly, or whether materials are coming properly; whether my vendor is supplying me material properly to my stores; whether my quality checking is happening properly. These are all no longer your focus area because ERP will handle all these things.

Ram Krishnamurti 13:42

And ERP will give you beautiful dashboards and information which will tell you whether everything is going fine. And then ERP will also give you exception reports in some of the areas where things are moving towards some issue.

So predictive exception reports also your ERP can give, a well-configured ERP. So ERP is if necessary. The caveat here is ERP has to be implemented with and some of the customers who are hesitant about the ERP have also seen that almost 60 to 70% of ERP failed to complete implementations. I mean, failed to deliver the expected return on investment in the expected time period. So that is where they are becoming hesitant I think.

Sam Gupta 14:26

Okay, so I want to dig a little bit deeper into one of the comments that you made related to the vendors existing in different systems. So if I look at the SMB landscape, vendors or customers existing in different systems. Let’s say if I have disparate architecture, I am going to have multiple systems in my organization, especially in these small to medium-sized businesses.

So I may have let’s say QuickBooks for accounting. I may have Salesforce for CRM. I may have a procurement system that could be Coupa or Ariba, something like that. Then there might be some other systems that say if I’m a project organization, I may have a tool called Mavenlink, or something similar.

So typically, when we work with newer organizations or smaller organizations, they like to use multiple tools. When they use these multiple tools, they need to have the customers or vendors, and each of these systems. If you look at Salesforce, Salesforce requires the customer data to be able to make the transactions inside Salesforce from the sales perspective.

If you look at QuickBooks, QuickBooks will require vendor and customer data from the accounting and finance perspective. So in your opinion, what would be the implications of having these duplicate records across the systems? Can you touch on that?

Ram Krishnamurti 15:47

Sure, I can do that by referencing one of our implementations. They had a separate procurement management system. So the procurement management system has its own vendor definition. Then we went to implement ERP for ERP procurement, you need to have the vendor definition.

We felt that that was not a big company, which could, there are applications like Master Data Management System which can handle such a situation. But it was not a big company, which could invest at that point in time in a data management system.

So what we did is we looked at the processes we so here are, one option was to duplicate all the vendors in the ERP system, but then that will create two sources of truth with two different people managing the vendor data and ensuring that the vendor information was in sync in both the application was a major challenge. So that was one of the challenges.

Ram Krishnamurti 16:43

So to answer your question, if you’re having a disparate system, that’s what I mentioned about the single source of truth earlier. If you have a disparate system, multiple sources of truth are bound to be an issue, because for example, if you take as your example of QuickBooks, having vendor information as well as a procurement system having vendor information.

So it is possible that the accountant who creates a vendor in QuickBooks will create the account does account to clear the vendor has said john smith, in the procurement management system. The same entry may be created as Smith, John, or it may be Mr. john smith. So these small tweaks can totally change the way these two systems talk to each other.

So you will find that in the procurement system, there is a purchase order it is “Mr. Smith, John”, whereas, in your QuickBooks, there is no information about “Smith, John”. So this kind of these, these are not small issues, you know. I have faced such vendor naming challenges, even in the existing system, it’s a vendor gathered, then I’m going to implement and when they give me fewer vendor data, I invariably see the situation the same “John Smith”, “Mr. John Smith”, “Smith, John.”

Ram Krishnamurti 17:57

So there are multiple variants of the same end up with transactions. One of the major challenges, when I go to implement ERP, is merging these vendors and ensuring that all the disparate applications as synchronous data. So disparate applications having different views of the same base data is a major challenge, which you will be facing if you are a disparate set of disparate systems running your organization.

And that’s where the ERP comes in handy. One major benefit of your ERP implementation is not implementation per se. And effectively our ERP implementation will force you to look at these inefficiencies. Sometimes your implementation could be a huge eye-opener that Oh my God, we had so much data misalignment in our organizations. No wonder we are having so many challenges and so many internal disputes.

So this vision that we are inefficient processes that itself is a major, major gain if you start going on your ERP implementation process.

Sam Gupta 19:01

Okay, amazing insight there, I love those examples, to be honest. So now we are going to shift the gears a bit and obviously, we need to talk about your costing experience. You have done a ton of implementations, as you mentioned in your introduction. So we want to make sure we are digging enough into the costing because some of the manufacturing customers when we work with them are extremely savvy with respect to the way they do the product costing the way they compute their profit margins.

But other manufacturers if I am going for some of the hand assembly shops, they don’t really know how much their product really costs. So can you touch on what costing is from your perspective? How would you describe this to a small business?

Ram Krishnamurti 19:49

Okay, that’s a good question. When you talk of costing, you know you have to look at it from two different perspectives. The costing is essentially we are talking about the tracking and analysis of the procurement you know. You procure different raw materials. And you want to track and analyze the performance of the procurement department. And the best way to do that is to use the cost and the training cost as a parameter to evaluate the performance of the procurement department. So there is costing from a raw materials perspective.

But then there’s another perspective costing is generated in the procurement department. But most organizations use the cost as you mentioned as a cost-plus markup pricing system or as a method of evaluating their profitability. So in that case, they’re looking at the cost of the finished product. So when you talk of costing, so, you have the cost which is created in the procurement department, but which is used in your production, as well as in the sales and the cost of goods sold as well in the finance department.

Ram Krishnamurti 20:56

So costing as these two different implications, you know, one is on the creation part, and one is on the cost consumption if I could use that word, the cost consumption in the finished goods costing part. So it’s very important to understand these differences because, in some organization, your focus will be on the procurement part, especially if you are bulk discounts and payment rebates, all those situations in those situations you are focused on how to improve my procurement so that I can get the benefit of all these cost benefits through my procurement department.

Another aspect is like I mentioned from the pricing perspective. So the benefit of ERP is that it will give you the information in both ways. You can get costing information and the tracking information, and details from the procurement when it comes to the raw material. You can also give detailed cost information about your finished project product, which you can use to analyze and evaluate to see how my cost is evolving over a period of time and is it in line with inflation or am I having some challenges in my cost is there any specific element which is going high or which is going low or whatever.

Ram Krishnamurti 22:05

And also, once you have confidence in your cost of the finished product, you are all your decision making the quality of your decision making, including pricing, including profitability analysis, even in the salesperson email, the available to promise level, your quality of decision making will improve the transparency of your finished product cost.

So look at your cost from both sides cost is generated during your procurement and the resource consumption. And the most in finished products that cost is a use cost is finished products are cost users rather than cost creators. So if you have this vision, that cost has two aspects. One is the creation aspect. And the other is the utilization aspect, and your decision-making will open up significantly.

Right now, there’s a lot of confusion even in a lot of customers who might deal with also this confusion about the definition of cost. Just another day, I was actually talking to one friend of mine who has worked in costing his entire life. He has 24 years of experience in costing but I asked him how do you do the costing of your raw material without ERP. And he was confused as to how we are doing it, how we were doing it.

Ultimately, he had to go back and check and then come back to me saying that, okay, this is a process that we were following, you know, prior to our year. So and this gentleman who has over 20 years of experience in costing is a cost accountant of that company. So this kind of confusion when it comes to costing is a lot of times. It’s a norm rather than the exception in many other companies, whether it is a big company, whether it is a small company, this confusion I’ve seen happen in many of the customers.

Sam Gupta 23:49

Okay, would you like to touch a little bit about different costing methods available for this and what are going to be the implications if you don’t choose the right costing method designed for your business model?

Ram Krishnamurti 24:02

Sure, it is a terminology that I have coined. It’s called. I call it costing continuum. It has specific costing on one end and standard costing on the other end. Specific costing obviously means that each unit of item has its accurate cost. Standard costing on the other end of the continuum none of the units is that accurate cost as generated from the transactions.

So in between this continuum you have different methods fee for then you have weighted average costing and then you have some other methods which are not generally used and then comes to standard costing. So mostly these four costing methods, specific costing fee for weighted average cost and standard costing. These are the four costing methods.

Now you know if you look at the first three and standard costing, you will see a classic difference here. If you look at either of the three specific costing FIFO or weighted averaging, it is just a cost capturing method.

Ram Krishnamurti 24:59

So if you buy an item for 10 rupees, the cost is 10. If you buy another item same item for 20 rupees, the average cost becomes 15. So it is just a cost capturing averaging process these product-specific costing, which is very rarely used FIFO as soon as we get a very nice by the name itself, it’s an averaging method.

On the other end, if you see standard costing, standard costing is what you expect the cost to be customer will expect some costs based on his experience and expertise and he will want to plan and control the cost and control the differences between your actual cost as well as a standard to see where the performance is lagging or improving.

So, if your objective is to control, you must use standard costing. If your objective is capture, for example, we discussed cost plus markup asset pricing strategy. In that situation, you don’t need a lot of control, you just need to capture cost accurately.

If that is your objective, then you should go for any of the averaging methodologies, but if you’re a stable company and if your input prices are generally stable, then you may want to control my costs to see how my performance is changing with respect to cost in that case, you may want to go for standard costing.

So, these are the four different methods of costing and in general there you will use your objective capture use any of the averaging methods if your objective is analysis and control use standard costing. So this is where at a broader level, we can talk about the cost.

Sam Gupta 26:35

Okay, so when we look at different methods, do you have any recommendation to any specific business or product type where you would recommend the FIFO or the average costing?

Ram Krishnamurti 26:45

Yes, see, average costing is the default. It is going to be, my, it’s my understanding, that average cost is going to be the norm people. Or companies are not doing average costing because average costing you need ERP support. But with ERP going to becoming much more widespread average costing is going to be the either no earlier FIFO was used in situations where you know in FMCG industries where there is low shelf life products moves very fast from your shelf.

So, in that case, companies were using FIFO cost, but over a period of time with the weighted averaging coming in many other companies are going to go for weighted averaging. But having said that, there are certain industries where weighted averaging did not work.

For example, in most commodity industries, weighted averaging will not work in commodity industries because, for example, Agri products like spices. I had one customer in the spice business. So in spices, normally the market, the Spice Market is seasonal. You know, in the summer season, spices are available, and the cost is very cheaper. And in the rainy season, the spices are less available, and it’s much more expensive.

Ram Krishnamurti 27:56

So what the companies will do is they’ll buy a bulk of their procurement chili, for example. They will buy the bulk of their Chili during the summer season as their availability is high and the cost is low.

Now, in this scenario, assume that you buy some lot in winter and if you’re using a weighted averaging scenario, what is going to happen to the average cost of the entire quantity is going to change. Now, the operation manager will not accept this because then their organization put in a lot of effort to identify a good source of you know, chili in summer at a lower cost. And just because a fancy ERP system has come in and done a weighted averaging. Now my entire cost has gone for a toss. And my profitability has gone for a toss.

So, this is applicable to every commodity industry, whether you’re taking of oil, whether you talk of sugar, whether you talk of steel, whether you talk of agri product. In any commodity industry, weighted averaging will not work.

So you need to have a different, you know, costing method called batch costing or lot costing. That is somewhere between specific costing and FIFO. So, it’s also an averaging method, but you’re averaging cost at a lot level.

Ram Krishnamurti 29:12

So, you can cost at a summer lot. You can cost at a winter lot. So, the costs are different. Your profitability information is much more accurate from the perspective of business in the case of those costing methods.

So, the commodity industry is mostly cannot do averaging. Weighted averaging is not acceptable for commodity industries. But most of the other industries manufacturing especially I think weighted averaging cost either it’s a transaction weighted averaging as in discrete. Or a periodic weighted averaging as, as in the process industry, I think that will work pretty fine.

Now standard costing is very, very complex. And if your audience uses a small and medium segment, standard costing has a lot of P&L impact. And if it’s not controlled properly, then the profit and loss statement could explain all your fees and your know why it has happened, what has happened. So of course, for your target audience, if it is SMB, I would say go for ERP, go for weighted average costing and you will do fine. You will get all the information that requests you to take any of the costing-related decision-making.

Sam Gupta 30:20

Okay, so that’s it for today, Ram. Thank you so much for your insight. Do you have any last-minute closing thoughts?

Ram Krishnamurti 30:26

Thank you so much for giving me this opportunity. Obviously, there are many, many more aspects to costing that, you know, we could have discussed. But if it has, you know, created a curiosity in the minds of your target audience who are hesitant about ERP. I think that the objective of my discussion was to allay those fears in the minds of the companies who want to go for ERP. And ERP can give a lot of benefits.

And from the perspective of cost, a well-run ERP can take the organization to another level of performance. So that’s, that’s my closing thoughts about you know, this topic. Thank you so much for giving me this opportunity to be a part of this podcast.

Sam Gupta 31:10

Our pleasure, Ram, it’s been insightful conversation. I really had a lot of fun discussing this with you. Thank you so much for your time and insight.

Ram Krishnamurti 31:18

Thank you so much.

Sam Gupta 31:20

I cannot thank our guests enough for coming on the show for sharing their knowledge and journey. I always pick up stuff from our guests, and hopefully, you learn something new today. If you want to learn more about Ron, please visit his blog, erp-consultancy.blogspot.com, where he regularly publishes high-quality content on topics related to ERP. He’s also active on LinkedIn. Don’t forget to check his book “Selected Articles on ERP,” which is available on Amazon. Links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business. You might want to check other related episodes including the interview with Erin Koss, CPA from Syte Consulting Group who touches on why culture is an essential ingredient in growth transformation projects such as ERP implementations. Also the interview with Wayne Sadin, who brings a unique perspective on why business processes are more important for growth than individual business systems.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform or DM me on any social media channels. I’ll try my best to respond personally, and make sure you get help.

Thank you, and I hope to catch you on the next episode of the WBS podcast.

Outro 32:53

Thank you for listening to another episode of the WBS podcast. Be sure to subscribe to your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Curt Anderson from B2BTail, who touches on why growth extends beyond sales and marketing for custom manufacturers. The revenue needs to be profitable. He shares his personal story of growing his e-commerce business.

Unlike other companies, he has had tremendous success in increasing revenue but struggled to make it profitable. He also breaks down critical terms that finance and operations executives need to better understand marketing and the digital world. If you are a custom manufacturer and curious about growing through e-commerce, this episode is a must-listen for you.

Chapter Markers

• [0:00] Intro
• [2:44] Personal journey and current focus
• [3:47] Perspective on Growth for custom manufacturers
• [4:34] Challenges in growing profitable custom manufacturers e-commerce sales
• [6:52] Overview of search ads and SEO
• [10:25] Importance of owning internet real estate for custom manufacturers
• [14:59] Why custom manufacturers need to stop being the best-kept secret
• [18:16] Importance of having a good first webpression for custom manufacturers
• [24:56] Three learnings from Curt’s book
• [28:25] Advice for custom manufacturers not to be complicit
• [32:59] Closing thoughts
• [34:06] Outro

Key Takeaways

• Growth and sales don’t always generate profits, but profits can certainly help you generate sales.
• Whenever you do a search on Google, and you see at you’ll see as a blog post from 2011, 2014, or something completely random, that’s not relevant. It’s telling you that Google is starving for information. They’re begging you. Please give us some content to put on that page.
• So many custom manufacturers really struggle with that they get caught in that I call it the entrepreneurial curse. We try to be everything to everybody. And what did we end up being? Nothing to nobody. You have to niche down. You have to focus on your core strengths and skills.

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About Curt

Curt Anderson founded an eCommerce company in 1995 that was ranked 3X on the Internet Retailer Magazine Top 1000 eCommerce Companies. Since selling that company, Curt has served as an eCommerce consultant targeting custom manufacturers.

Curt is the author of “Stop Being the Best Kept Secret” and founder of B2Btail.com , an eCommerce resource guide for manufacturers.

Resources

• Connect with Curt
  • LinkedIn | Twitter
• Connect with B2BTail
  • Website| Medium| Linkedin
• FREE weekly webinar series – Manufacturing eCommerce Success – every Friday at 1:30 ET
  • Go to B2Btail.com to register

Full Transcript

Curt Anderson 0:00

Do you know this company? Yeah, that’s my competition. I didn’t know that they were tech-savvy. I didn’t know they were coming up on Google. I’m like, Are you mad? They’re like, yes, I’m like, good. I want you mad, we got to stop being the best-kept secret. We’ve got to get you in the game.

Intro 0:14

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies.

So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS Podcast, where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta 0:50

Hey everyone, welcome back to another episode of the WBS podcast. I’m Sam Gupta, your host, and principal consultant at digital transformation consulting firm, ElevateIQ.

The manufacturing community is genuinely gifted, and one of the best-kept secrets that the world of Google needs to know. Manufacturing conversations are typically limited to the four walls of trade shows and have a limited presence on newer marketing channels. The digital world isn’t any different from the physical. There’s only so much digital land you can own before it becomes too expensive and competitive. First movers will have an advantage while the laggards will struggle to grow their businesses.

In today’s episode, we have our guest Curt Anderson from B2BTail, who touches on why growth extends beyond sales and marketing. The revenue needs to be profitable. He shares his personal story of growing his ecommerce business. Unlike other companies, he has had tremendous success and increasing revenue but struggled to make it profitable. He also breaks down critical terms that finance and operations executives need to better understand marketing and the digital world. If you are a custom manufacturer and curious about growing through e-commerce, this episode is a must-listen for you.

Let me introduce Curt to you.

Curt Anderson founded an ecommerce company in 1995 that was ranked 3X on the internet retailer magazine’s top 1000 ecommerce companies. Since selling that company, Curt has served as an ecommerce consultant targeting custom manufacturers, Curt is the author of Stop Being the Best-kept Secret and the founder of b2btail.com, an ecommerce resource guide for custom manufacturers.

With that, let’s get to the conversation.

Hey Curt. Good morning. Welcome to the show.

Curt Anderson 2:37

Sam. Good morning. Thank you What an absolute honor privilege to be with you. This is a thrill. So thank you very much.

Sam Gupta 2:44 – Personal journey and current focus

Okay, I’m super excited to talk to you as well, because obviously, you have a very interesting background. So before we start, let’s talk about your background. And I don’t know if my audience is going to be familiar with you. Some people might not. So would you like to share your journey?

Curt Anderson 3:00

Sure. Boy, we’ll make it short. So, I’m an e-commerce consultant. My firm is called B2BTail. It’s an e-commerce resource guide for custom manufacturers. My story goes, I had a wholesale business in the 90s. And man, I was struggling horribly, and my accountant loves to declare that I was the worst client that she had ever taken on at that time.

And I was running out of options and ideas of how to turn my business around. And then in 1995 this thing, ecommerce came along. And it was a super long road after that, but turn things around. And here I am today. So ecommerce has been a game-changer for me. And I’m just very passionate, and it’s my mission just trying to help companies in particular custom manufacturers on their e-commerce journey.

Sam Gupta 3:47 – Perspective on Growth for custom manufacturers

Okay, so before we get deeper into your journey, would you like to share your perspective on growth? What does growth mean to you?

Curt Anderson 3:55

Yeah, great question. So with that question from my perspective, so again, kind of, you know, I kid around, but man, I was, you know, young, it was easier growing sales, I was not real strong on the profitability.

And once I kind of figured out that whole perspective, and just the powerful elements that ecommerce brings to your business, it really turned things around. So you know, it’s very easy to grow in sales, I would say easy, it is easier to grow and sales before, you know, for entrepreneurs, just focusing on that bottom line, profits creates those growth opportunities.

Growth and sales don’t always generate profits, but profits can certainly help you generate sales.

Sam Gupta 4:34 – Challenges in growing profitable e-commerce sales

Okay, that’s a very interesting perspective, because that is not something I hear from my guests and also from my clients. Typically their challenge is growing sales, obviously. But I mean, I would definitely like to learn a little bit more about why it was easier for you to grow sales, but you found challenges in growing profitability.

Curt Anderson 4:53

Great question. So let’s say so ecommerce, so I, you know, I started doing like, I was doing search ads before Google was even on the market, that’s how long I go back. And again, you know, small, you know, this is back in the, when the internet bubble hit.

And I was spending like, $6,000, a month on search ads, and Yahoo was the main search engine at the time they were fed by was called Overture that was the auction. I don’t want to get too deep. But so yeah, Yahoo was the main search engine, say like 2000-2001.

And I was spending an enormous amount of money. You know, at that time for my small business, my accountant didn’t know what you know, the internet was new e-commerce was new. And he was like, you know, what are you doing spending all this money is what is this thing, Yahoo and search, and so and so forth. So I could spend a ton of money on marketing, I could hire sales reps, or, you know, businesses can grow sales by spending money.

Curt Anderson 5:48

But you know, as we back in the internet bubble or a lot of times you hear about that burn rate when I just when I finally figured out how to stop the burn rate and just have more effective marketing, more efficient marketing, and more impactful marketing.

That’s when the opportunity was to grow profitable sales. So I don’t know, maybe I shouldn’t use the word easy. So I don’t want to say sales are ever easy, but unprofitable sales are a heck of a lot easier than profitable sales.

So I had a running joke, I would say, Hey, man, I could sell my dollars for 97 cents better than anybody. So Sam, unless you were selling yours for 96 cents, nobody would beat me at selling my dollars for 97.

Well, I can only sell my dollars for 97 cents for so long, or I’m going to run out of dollars. When I finally figured out going on the other side of highly focused profitable opportunities.

That’s when really the business exploded and had really nice healthy growth and a good balance sheet. Good bottom line. So that was much more refreshing and rewarding than high gross sales that where I was at a high burn rate. So that’s my deal there.

Sam Gupta 6:52 – Overview of search ads and SEO

Yeah, I could not agree more with respect to your, you know, comment about unprofitable sales. And I don’t know how many custom manufacturers really measure that. They might measure, I would say, at the balance sheet level. And they might know the overall picture, but I don’t know if they measure at the channel level.

So that’s a very interesting insight. But before we get there, you know, since my audiences more of the operations and finance folks, and they might not know terms such as search ads, so can you talk a little bit more about what search ads are and how they work? And if somebody is starting in the e-commerce space for the first time, what they need to know about search ads?

Curt Anderson 7:31

Yeah, awesome question, Sam. So So search, as you know, so now in 2020, I, you know, I guess I’ll make the assumption that we all use, you know, Google Google’s a verb Google’s, you know, part of our daily lives for most folks. And so when you do that Google search, and say you’re, you know, we’re looking for shoes, a restaurant, a travel experience, maybe college for you know, yourself, kids, what have you, when you do that search, that page is gonna be populated.

You know, back in the 2000s. Google, as you know, when you did a Google search, it was just text. All you saw were texts. Now Google is facing fierce competition from marketplaces like Amazon, Alibaba, all sorts of social media sites, Pinterest, Instagram, and they are flooded with images.

When we’re so visual. Google now has so many images, videos, content, as you notice, when you do those Google searches, many of those products and many of those images on a Google search now are ads. That’s how Google makes their bazillions of dollars. That’s how Google is a coveted stock to own.

Curt Anderson 8:36

They’re very profitable because of the service that they provide the solution that they solve for you while you’re doing that search. So anytime you do a search, and you see the word ad, that little black in it says ad, that’s how Google makes her money.

And what’s happening is a company wants to be positioned to be found. So again, Sam, if you and I were selling shoes, we wanted to target shoes, very, very broad term, super expensive, again, probably not profitable, we might go broke trying to compete with Nike or Adidas or what have you.

But if you and I were selling pink, running shoes, with purple shoelaces very specific, and we’re targeting that keyword, with an effective strategy for you and I, we would maybe post those images of our pig running shoes with purple shoelaces on Instagram, or Pinterest, or other social media sites and hope that Google grabs that.

Curt Anderson 9:31

So now we would populate in that search. Because it’s a more specific product, we might have better success with our Google advertising. And what it is, it’s called a pay-per-click model. It doesn’t cost you a penny to come to appear on those ads. The Cash Register brings whenever somebody clicks on that ad.

So again, from now on, if that if this whole process is new to you, when you do a Google search, look at what’s going on the page and just look for ad or say Google Ads Folks are bidding to be net position.

If it doesn’t say adword. That’s what when you hear SEO, or those organic keywords, those free words, that’s organic. So just without using a visual, that’s kind of my audio version snapshot of the difference for Google organic posts free ad-free position listings on Google, compared to those paid listings. Was that helpful, Sam?

Sam Gupta 10:25 – Importance of owning internet real estate for custom manufacturers

Yeah, it was very helpful. In fact, see, I actually want to touch a little bit deeper into that, to be honest, related to the competition aspect that you mentioned. And I think I was having this conversation with Joe from Gorilla 76.

He runs the marketing agency, and we were having the conversation about having or owning this piece of the internet real estate. And we felt that custom manufacturers are so behind in terms of owning this piece of internet real estate.

But you mentioned the interesting keyword here, with respect to this intense competition between Amazon and Google, and in my opinion, custom manufacturers don’t own any of that piece of the pie.

So tell us, what does this competition mean to custom manufacturers, and why they should own the piece of pie there?

Curt Anderson 11:14

Yeah, love it, love this question, I kind of geek out on this. And so I do these things called e-commerce opportunity audits with custom manufacturers. And this is exactly what we hit on.

So if you’re dipping your toe into for a shameless plug, my book, The title of my book is Stop Being the Best-kept Secret. And the reason I called it that, and then I started incorporating the book, but every manufacturer I’d call on, you know, it was like early too, like 2010-11-12.

I’m like, Hey, tell me about your business. Tell me about your manufacturing operation. Like, oh, we’re the best-kept secret. We’re the best-kept secret. We’re word of mouth. We go to trade shows. Our sales reps go on the road.

Well, I always felt like a man being the best-kept secrets, not a great marketing strategy. And we would kind of kid around about it.

Curt Anderson 11:56

So I heard it so often, I end up you know, that was the title of the book. So the challenge that I find with so many manufacturers in who I, you have the OEM, the original equipment manufacturer, they have a finished good a proprietary product, who my book and I do a ton of webinars who might my preach that the message I’m trying to deliver is to those custom manufacturers that feels left out of the e-commerce party they like, I don’t have a proprietary product.

I don’t have a finished good. ecommerce isn’t for me, I can’t go on Amazon. What do I do? So that’s my diatribe to get let’s deep dig deep into your question. So many manufacturers do what they bend metal, they cut steel, they 3d print, they fabricate something, they make something for somebody else, particularly those custom manufacturers.

However, what they have is they have a proprietary process. And that’s the sweet spot that I love to talk about with every custom manufacturers, we need to exploit your proprietary process. You’ve been doing it for years, in some cases decades, sometimes for generations. And the problem is you’re still the best-kept secret. So let’s go into that search process.

Curt Anderson 13:06

So if I’m like so many custom manufacturers, you go to their website and their capability, they’ll have their capability page which is super common, you know, say CNC machine, fabricate metal, bend metal, cut steel, da da da.

If I do a search for CNC machine, it’s like you and I trying to target shoes, like it’s just like, you know if I was like Sam, I want to come up the first page on shoes, you’re gonna be like Curt, dude, if you guys could see me I have no hair, you’re gonna be like Curt, you have a better chance of growing hair, then coming up on the first page of Google for shoes.

That’s the exact same thing for CNC machining, fabricating metal, 3d printing, what we have to do we have to talk about, who do you bend metal for? Who do you cut steel for?

Curt Anderson 13:49

So when I talk to custom manufacturers, honest to goodness, you see like the lightbulb go off, because they’re like, Oh, well, we’re aerospace. And we do CNC tooling for turbine engines. Bingo. That’s your key phrase. It’s not CNC machining, it’s CNC machining for turbine engines. That’s your sweet spot. That’s your strike zone.

It’s so now we have a chance to come upon that first page on Google, either, the bids are going to be so much cheaper and the Google ads or you there’s virtually little to no competition. And whenever you do a search on Google, and you see at you’ll see as a blog post from 2011, 2014, or something completely random, that’s not relevant.

It’s telling you that Google is starving for information, they’re begging you please give us some content to put on that page. So what I tell every custom manufacturers dude, we’ve got to do a video. We need to put throw up a blog post. We need to do a post on LinkedIn using that keyword CNC tooling for turbine engines. And now we’re going to stop being the best-kept secret. How does that make sense?

Sam Gupta 14:59 – Why custom manufacturers need to stop being the best-kept secret

It does in fact, To be clear, I love the way you describe these things because that is something, you know, I have not had with my other guests, to be honest. So I’m loving this conversation right now.

And by the way, I mean, since you mentioned your book, and I love the title of your book, two reasons. Number one, it is super catchy. Stop being the best-kept secret, right? It’s catchy. But the best part I love about your title is it’s so real. Yeah. That is the reality of manufacturers. You tell me how many manufacturers are present on Google? How many manufacturers are doing e-commerce? And if they are doing, are they really successful? You tell me, Curt?

Curt Anderson 15:45

Well, you know what? I’m gonna be polite, Sam. So what I when I, when I do my webinars, I call it to play. I’m like, you know what we had, I want to be helpful. We call it we had an online identity crisis that we needed to resolve. And that’s my polite way of saying, Do you really have a really poor presence and what it is it’s either when I do my workshops, I have a three-pronged approach in what it is it starts with, we need to make that great first impression is like a cutesy word, I call it webpression.

How do we make that great first, webpression? You know, we want to Wow, that your want to dig deep into your persona. Okay, that ideal dream customer. And when I do my in my book, and in my workshop, I just to kind of like I try to make things memorable. So I kid around I’m like that ideal dream customer is your soulmate, your bait, your website is basically a matchmaker and we are seeking a soulmate.

Curt Anderson 16:41

So like before we got another call, Sam, you know, one of the first questions like you know, who’s your sweet spot? Who’s your target? You know, I could have said, Sam, you know, who is ElevatIQ’s soulmate, and you give me a really nice description immediately.

So like, now I know exactly who you’re targeting. So many manufacturers really struggle with that they get caught in that I call it the entrepreneurial curse. We try to be everything to everybody. And what did we end up being? Nothing to nobody, you have to niche down, you have to focus on your core strengths and skills. I’m a big baseball fan. So you want to stay in your strike zone.

Curt Anderson 17:17

So we want to make that great. First, webpression. When that soul mate, that ideal buyer lands on your website, does it connect? Does it resonate with that person? Okay, number two, stop being the best-kept secret, we want to dominate and attack the search engines. And we just kind of covered that in our previous spot right there.

And number three, I talked about, okay, let’s get on the offensive. And that’s where I’ve talked about, you know, using LinkedIn, using social media, and most importantly, the marketplaces. I’m very bullish on you know, I know you’ve had some podcasts and you’re very bullish on, you know, work with Amazon, I do a lot of work with Alibaba or any of the other manufacturing marketplaces. There’s I’ve had success with Digikey, Zorro.

So you want to just focus and figure out, you know, where is that soulmate? What problem do they have? How can we solve it as quickly as possible? How can we be found, and just resonate with that great first impression as they land on your website?

Sam Gupta 18:16 – Importance of having a good first webpression for custom manufacturers

Okay, so I love the term webpression. To be honest, I mean, that’s definitely very interesting. It’s memorable, as you mentioned, and I think I can relate to it. Way back, I would say, you know, when I was coming out of school, and I wanted to get some career advice, and they said that you know, what, your first impression is the last impression, okay, so you’ve got to wear a nice dress, you’ve got to show up on time.

And if you do that, then the other things will become automatically easier. So I think he was touching on a similar aspect. Would you like to touch a little bit more on that, why that matters to the manufacturer, why it is so important, and how they can get there with respect to having a good webpression?

Curt Anderson 19:00

Absolutely. And like this conversation is a perfect example, Sam. So you know, you reached out to me, I’m super honored, what a privilege. I look up your LinkedIn profile. And folks, I strongly encourage you, invite you, welcome you. Check out Sam’s LinkedIn profile is that Sam is just so impressive. You’ve had you know, at a young age, you’ve had a really rock star, you know, I know we throw around that word, but you’ve really had a nice career so far.

And that’s the thing is like, people do business with people. You know, we’ll talk B2B, we talk about B2C. But now you’re hitting you know, this isn’t original on my part, you’re hearing more and more, it’s human to human.

So you and I had a nice connection. I went to your profile. I was wowed immediately. I’m like, Man, what an honor and privilege that Sam is circling out to me. I’m dying to have a conversation with you. Now we’re kickstarting off a nice trusting business relationship, that hopefully that we’re going to grow together and bring in you know, maybe work on a project or clients together.

Curt Anderson 20:00

It’s the same thing for that manufacturing. Here’s a great example, and I don’t like to disparage anybody. But I had an I had somebody reach out to me and I and then again I do a little ecommerce audit and so just as I’m doing with you know who’s that ideal dream customer, who’s your soulmate you know, not when I was enjoying having fun so we have a little fun with that soulmate comment.

And they went deep man, they’re describing you know, we make this cutting edge widget, this part it’s in vehicle space, and our persona our soulmate, or like dirt track racing motocross, I’m picturing like, Guys, you know, mud all over the place, the helmets and pads shot, you know, flying overmount, you know, data, we go to their website, and there’s like a Ferrari on the, you know, is their landing page, there’s a Ferrari with no call to action.

Curt Anderson 20:48

And I’m like, man, no disrespect, but I, I have a whole page of you know, I’m old school, I still write, I have a whole page of notes of the persona, your soulmate that you just described to me. And I don’t want to say that people that that ride motocross, but it’s typically a younger age, that they’re not driving Ferraris, or, you know, a couple $100,000 vehicle, but I just don’t see the disconnect with what you just described, to me, it’s, there’s a total disconnect of what you describe, no call to action, so on and so forth.

That’s a perfect example of what manufacturers they, they’re not marketers, they’ve never needed to be marketers. So this is out of their strike zone, it’s out of their wheelhouse. They just need help. And so they just want, they just need a better tool and better strategy of how to communicate when you land on that webpage to make that great first impression of something that speaks to that soulmate with a nice call to action of like, I’m here to help you solve that problem.

Sam Gupta 21:49

Yeah, exactly. And I love the quote that you keep repeating to stay in the strike zone. And in fact, I’m actually gonna go back to the LinkedIn profile, you know that you mentioned, I like to stay to my core. We are ERP, we are digital transformation. We are going to be describing ourselves in just one word. And we are going to be repeating ourselves all the time without getting bored.

Okay, and the same thing goes with you as well. Let me see when you display to yourself, you are ecommerce for manufacturers. That’s who I am. That’s who I’m going to help. And that’s exactly what we need from the manufacturers as well. I don’t know how many manufacturers can display themselves in one word, but that one word is essential for their success in ecommerce. Would you agree with that, Curt?

Curt Anderson 22:36

Absolutely in what’s in the share that so I have a colleague that I work with her name is Allison DeFord, and she has a firm a company called Felt Marketing. And as a matter of fact, we just are rolling out this super exciting Alibaba digital sprint of the e-commerce webinar series. We just launched it yesterday. She’s speaking on next Tuesday, in this Alibaba series. She’s one of the funniest human beings on the planet. And she’s also one of the most powerful speakers. And she’s done. We’ve done a couple of workshops together.

And I just watched the expressions of people. She describes this thing called the we-we syndrome, especially for manufacturers. And what it is when you may not a manufacturer website back to talking about that great first webpression.

There’s the we-we syndrome. And what it is, is you go to the capabilities, and it’s, we deliver on time, we make great products, we are high quality, we’ve been in business since 1920. We do this we do that and she calls it we we we all over ourselves, and then we never once make it about the customer.

Curt Anderson 23:40

And the fact of the matter is whether we like it or not, people really don’t care about us. They’re thinking about themselves all day long. They have problems, they have stress, personal family, we’re in COVID. They want to hear from you. How can I help you? What’s going on in you in your world? What’s going on at your business? If you’re essential? And you’re cranking? Is there a process? Do we have a proprietary process, that we can just knock the ball out of the park with you to help solve your problem?

What can we do for you and that’s a big that’s an I do LinkedIn workshops. And again, you look at LinkedIn profiles. And you know, I always strongly encourage let’s try to avoid or prevent using the word the letter I or me.

And if you’re a manufacturer, let’s stop the “we-we” syndrome, and let’s make it all about them in what value you bring in, in almost short changes. The part that person’s LinkedIn profile or that comp that manufacturer website because they’ve been crushing it for decades, they do amazing things.

And again, it’s just how do you better communicate on the website and it’s really easy, I’m gonna say, you know, again, it’s a potentially simple fix of just making it about the customer.

Sam Gupta 24:56 – Three learnings from Curt’s book

Okay, amazing. So I’m loving this conversation, to be honest. I mean, You know, the way you are describing things and the kind of insight you have, it’s, it’s phenomenal.

So if you want to go back to your book again, and obviously we touched a bit. So let’s say if I’m buying the book, Curt, what are going to be the three learnings that I can expect from the book?

Curt Anderson 25:17

Three learnings? Great question, Sam. So again, what I do so the book, when I do webinars, I break them down into three sections. So but with that question there, I’m going to break it down one step further.

So again, how do we make that great first impression? How do we stop being the best-kept secret and be found and what I call it, we want to dominate search? And when I say dominate search, where is your soulmate?

Now I have a teenage daughter. So if I’m trying, if I’m targeting her, what’s interesting shows her generation is not on Facebook. So if I’m trying to target you and I are selling our pink running shoes with purple shoelaces, we’re not going on Facebook to target teenage girls, we need to go somewhere else, Instagram or what have you. So when I say dominate search, you really need a laser focus, where is your soulmate hanging out, and again, get on the offensive.

Curt Anderson 26:04

But let’s talk about manufacturers one for one second, on the e-commerce side, especially that custom manufacturer, those that feel left out of that e-commerce party and this is what I break down in the book. I went first I go into all the incredible benefits of e-commerce that again, 25 whatever years ago when I got e-commerce that, you know, all sudden people buy 24×7, I always preach, how can we help that customer make a buying decision on a Friday night at midnight, without having to wait for us to open up the doors at seven o’clock.

Warren Buffett always preaches you’ve got to figure out how to make money while you’re sleeping. And if you’re always live, you know, if your only hours, your billable hours are during you know, nine to five, we’re not making money while we’re sleeping. That’s the power of e-commerce.

What I break down in the book for manufacturers run through this quickly is first like have in again, we touched on it that that strong healthy call to action, landing page that great first impression, these big forms that we have to fill out I use an example in my workshops where I’m like, let’s just you know, I do a thing where it’s like submitted drawing, let’s just get the party started. I’m not asking for your firstborn. I’m not asking for your social security number.

Curt Anderson 27:16

I don’t need to know a ton of information submitted, you know, and manufacturers we need a CAD drawing what do you want us to make? Let’s get it going. Number two, in that custom manufacturer space, is how can we convert manufacturer direct ecommerce opportunities when you shorten their supply chain? In magic happens? great opportunities. Number three touched on this earlier I call it how do we scale your proprietary process for that manufacturer.

They have the equipment, the machinery, the skill set, the knowledge, the raw material, they have everything in place, they make this one little widget for one company, one industry and they’re the best-kept secret if we could help them figure out how to break out of that and tell the world that hey, we make this little widget is there anybody else on the planet that can use it?

That’s how we can scale your proprietary process. And then I go into like a little how do we customize your experience. And we’ve created this configurator tool where customers can now build their own product. And it provides them an instant quote. So that’s my diatribe. But that’s kind of the preach that I go through with those custom manufacturers. That’s the message in the book and the workshops that I do.

Sam Gupta 28:25 – Advice for custom manufacturers not to be complicit

Okay, amazing insight there. And I would probably love to go deeper into that. But I think you know, we are running out of time. And I have a couple of questions that I definitely want to cover, you know, as part of this conversation just because you have amazing insight.

So, uh, one question that I like to get everybody’s advice on is, you know, really, I’m playing a manufacturer here, to be honest. So let’s say if I’m a manufacturer, and I am used to going to trade shows, I know that I meet people in person there I have that personal connection. And I get business I may not be able to measure but at least uncomfortable because you know, I know what works for me and what does not.

Now obviously Curt, you are pro when it comes to marketing, e-commerce, doing Google SEO, but as a manufacturer, I have this fear, the fear of uncharted territory, the fear of sort of the comfort zone, I want to stay in my comfort zone because I’m comfortable there. So as a manufacturer, what would be your advice to overcome that?

Curt Anderson 29:31

Yeah, awesome question Sam. And here’s a funny story. So I do these ecommerce opportunity audits and I just did one this week custom manufacturer nice sized company been around for decades, very successful again, you know just what you described it with, with trade shows.

This manufacturer they because of the trade shows are gone. They did it virtually they the trade associate Association did it virtually they did this trade. So the team, their sales team did the virtual tradeshow. This is a great story. Last year, they did X number of sales and it costs them, say x.

This year they went to the exact same tradeshow virtually, they did the exact same amount of sales, it cost them a fifth of x last year, exact same number of leads, it cost them a fifth, 20%. It was an 80% decrease in expense by doing it virtually.

Curt Anderson 30:31

And the sales rep said of their computers, they worked all day when people popped into their little booth. Then they talked to him, then he went back. And so they were more efficient through the whole day. So here’s a case where they were forced to do this, they didn’t have a choice.

What I do with manufacturers, a lot of times and again running out of time, I’ll pull up I’ll do a search. And what really lights a fire is if organically or their competition is paying for an ad. That’s what triggers a fire.

And I’m like, are you Mike, do you know this company? Yeah, that’s my competition. I didn’t know that. They were tech-savvy. I didn’t know they were coming up on Google. I’m like, Are you mad? They’re like, yes, I’m like, good. I want you mad. We got to stop being the best-kept secret. We’ve got to get you in the game.

Sam Gupta 31:13

Yeah, amazing. Again, I would love to go on that conversation. I think we need to meet often, Curt. Okay, I love this conversation. But I mean, we are definitely short on time here. So I would like to know if there is anything that we have not noticed about your book that you would definitely like our listeners to know.

Curt Anderson 31:33

You know, I’ll make this super brief. So 2015, I had a great client manufacturer with 100-200 employees. And they made massive, massive walnuts. A customer found them, we have no idea how and they became my client after this story. the company from Milwaukee came to visit took a tour of the facility was here in New York, totally wowed, they landed a six-figure project.

When a gentleman was walking out the door, he said I almost didn’t come to visit your facility because your website was so bad. If that happened in 2020, and he can’t in that buyer couldn’t come to take a visit or a tour of that facility. He just went somewhere out.

So in 2020, that didn’t happen. I just think if you’d lost a six or seven-figure bid because you chose that what you touched on that fear of like upgrading my website, making that great first impression. And stop being the best-kept secret, though spend a quarter-million half million dollars on a CNC machine or a new piece of machinery, you know, they struggle and have the resistance of spending a few dollars on a Google ad or a new website. So it can be very scary when you look at it from that proposition.

Sam Gupta 32:45 – Closing thoughts

Okay, amazing. So just in closing, Curt, I think the key message that I got from this conversation is going to be, “stay in the strike zone,” and I think that resonates with your book’s theme as well. Do you have any closing comments?

Curt Anderson 32:59

Sam, first off, thanks, man. What an absolute honor privilege I know you and your team at ElevatIQ do amazing work. And so I am thrilled that you and I made a connection I can’t wait to you and I work together. And I just want to share with you your audience. We offer a free webinar series every Friday at 1:30p Eastern time. It’s called manufacturing ecommerce success.

Next Friday we have Brian Beck who wrote the book Billion Dollars B2B E-commerce. He is a rockstar. We have high-level speakers every single week. Totally free. We knock it down for 30 minutes. We have a great time. It’s on LinkedIn live, folks can connect with me on LinkedIn and get information but we’d love to and again, just delivering that value to help the manufacturers get through COVID.

Sam Gupta 33:44

Okay, good. So you know, you call everybody Rockstar, but in my opinion, I think you’re a real rock star and you’re super humble. That’s what I love about you. Well. It’s been super fun. I love this conversation. I thank you for your time, Curt. You have a wonderful day there.

Curt Anderson 34:02

Hey, thank you so much, Sam, what a privilege. Thank you, everybody, have a great day.

Sam Gupta 34:06 – Outro

I cannot thank our guests enough for coming on the show for sharing their knowledge and journey. I always pick up stuff from our guests, and hopefully, you learned something new today. If you want to know further about Curt or B2BTail, head over to b2btail.com and register for the free weekly webinar series manufacturing ecommerce success that they conduct every Friday at 1:30p ET to help the manufacturing community. Links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business, you might want to check other related episodes including the interview with Chase Clymer from ElectricEye, who brings a unique perspective on DTC from the angle of ecommerce toolset and Shopify. Also, the interview with Michael Begg from AMZ advisers, who touches on D2C from Amazon from a marketing channel standpoint

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform or DM me on any social channels. I’ll try my best to respond personally, and make sure you get help.

Thank you and I hope to get you on the next episode of the WBS podcast.

Outro 35:20

Thank you for listening to another episode of the WBS podcast. Be sure to subscribe on your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Joe Sullivan from Gorilla 76, who touches on growth from the perspective of marketing and why COVID offers an excellent opportunity to reinvest their marketing budget reserved for in-person events to other digital channels.

He also discusses why marketing needs to start from a strategic business outcome instead of a tactical approach. If you are serious about growth, this episode is a must-listen to ensure that marketing is not an after-thought in your organization.

Chapter Markers

• [0:00] Intro
• [3:02] Personal journey and current focus
• [3:28] Perspective on Growth
• [7:07] The shift in mindset due to COVID and need to reinvest marketing budget
• [13:13] Successful webinar strategy with a fraction of tradeshow marketing budget
• [19:50] How marketing budget and results differ for manufacturing
• [23:34] CFOs’ fear of losing marketing budget dollars
• [26:51] Marketing budget pilot strategy to explore new initiatives
• [31:05] 30-60-90 marketing budget allocation and plan
• [34:34] Closing thoughts
• [35:37] Outro

Key Takeaways

• There’s some leap of faith, you have to take at the beginning because there’s an investment to make, you can’t just start with $1,000 and just go, like, there’s got to be some strategy work that’s done that you need to do need to develop content.
• You got to start somewhere. I think it all starts with a really clear strategy like you have to look at and say what’s the business outcome we’re trying to achieve here? Are we trying to grow by 10 million and in new sales next year? Are we trying to grow by 50% look at your growth target and then work with somebody who can advise you on how to get there.
• Start with that new sales target or new customer acquisition target and work backward, how many qualified opportunities you’re quoted opportunities do I need in my pipeline to hit that sales target? Based on our close rate? Right, step back one further, how many sales-qualified leads do we need on our sales team’s plate to be able to quote that much business?
• If it’s not measurable, if it’s not something that’s moving your business forward in terms of growth at a company level, then you’re probably doing the wrong thing, or you need somebody to look hard at it for you and help you figure out how to adjust that strategy.

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About Joe

Joe is an Industrial Marketing Consultant of 10+ years and cofounder of the St. Louis-based industrial marketing agency Gorilla 76. In addition to co-leading the agency, Joe serves as the company business development lead and consults Gorilla’s clients on both sales and marketing strategy.

Much of his time is dedicated to speaking, writing, and creating video content on behalf of the agency. Joe is also the host of The Manufacturing Executive Podcast where he interviews manufacturing marketing leaders and executives and helps spread their stories to inspire the manufacturing community.

Resources

• Connect with Joe
  • LinkedIn | Twitter
• Connect with Gorilla 76
  • Website| Facebook | Linkedin | Twitter | Instagram | YouTube
• The Manufacturing Executive Podcast
  • Website

Full Transcript

Joe Sullivan 0:00

Well, what blows my mind, first of all, is that these companies continue to throw $5,000 a month into print ads and trade journals and going to trade shows where there isn’t any measurable ROI.

Intro 0:14

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies.

So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta 0:51

Hey everyone. Welcome back to another episode of The WBS podcast. I’m Sam Gupta, your host, and principal consultant at digital transformation consulting firm, ElevateIQ.

Traditionally, the industrial sector’s growth has been primarily sales-driven. And marketing takes the backseat. With the changing business conditions of COVID. The industrial sector has been caught off guard without the traditional revenue channels of in-person interactions at trade shows and industry events. The new normal requires industrial companies to rethink their marketing strategies and consider marketing as a key enabler of business development.

In today’s episode, we have our guests Joe Sullivan, from Gorilla 76, who touches on growth from the perspective of marketing, and why COVID offers an excellent opportunity to reinvest their marketing budget, reserved for in-person events to other digital channels. He also discusses why marketing needs to start from a strategic business outcome instead of a tactical approach. If you are serious about growth, this episode is a must listen to ensure that marketing is not an afterthought in your organization.

Let me introduce Joe to you.

Joe is an industrial marketing consultant of 10 plus years and co-founder of St. Louis based industrial marketing agency, Gorilla 76. In addition to co-leading the agency, Joe serves as the company business development lead and consults, Gorilla’s clients on both sales and marketing strategy. Much of his time is dedicated to speaking, writing, and creating video content on behalf of the agency.

Joe is also the host of the manufacturing executive Podcast, where he interviews, manufacturing Marketing Leaders, and executives and helps spread their stories to inspire the manufacturing community.

With that, let’s get to the conversation.

Hey, Joe, welcome to the show.

Joe Sullivan 3:01

Thanks for having me. Sam.

Sam Gupta 3:02 – Personal journey and current focus

Before we start Joe, would you like to touch a little bit about what you guys do?

Joe Sullivan 3:06

Yeah, sure. So I co-own gorilla 76. We are an industrial marketing agency of 20 people based in St. Louis, Missouri, and been in business for about 14 years.

And really what we do is help mid-sized B2B manufacturers identify, attract, engage and drive sales opportunities with ideal fit customers.

Sam Gupta 3:28 – Perspective on Growth

Okay, amazing. So when you work with these customers Joe, what is your perspective on growth?

Joe Sullivan 3:33

Yeah, well, the manufacturing sector, from all of my experiences, you know, over the last probably eight, nine years or so, since we really, really specialized deeply in working in with manufacturers is, what we’ve observed is that these organizations are very sales heavy, they’re sales-driven organizations, they generally speaking are fairly unsophisticated on the marketing front.

So to them, marketing has meant tradeshows. It’s meant print ads, it’s meant direct mail, maybe pay per click, but growth has been largely driven through sales, as opposed to, you know, marketing feeding opportunities into sales. And that’s kind of the mindset that we are working to help shift

Sam Gupta 4:19

My audience is going to be primarily the operations and finance people. And some of these guys may not have heard the terms like PPC or some of the marketing language, so if you could be slightly more descriptive, you know, with respect to marketing, and what that means to the operations people, that will be amazing.

Joe Sullivan 4:37

Yeah, absolutely. I’ll be conscious of that as we go forward here. So, but yeah, to you know, kind of recap what I was saying there, you know, when I say PPC, we’re talking about pay per click, so you know, paid ads in Google.

But you know, that for a lot of these companies, that’s the extent of how they’ve incorporated you know, modern marketing practices. And even that is I wouldn’t even consider unnecessary the modern marketing practices part of the mix, but it worked.

We’re talking about organizations that are, like I said earlier, driven by sales and in-person events and, you know, face-to-face, which is great. And it’s all needs only to be part of it.

But the role of marketing, I think marketing is looked at by so many organizations, as you know, the guys in the company who create brochures and print materials to support sales and leave-behinds and they make the website look nice, and maybe do some stuff about company, the company picnic on social media.

Joe Sullivan 5:38

And you know that the mindset that has to shift here is we need to be looking at marketing as a driver of revenue opportunities. Marketing needs to be feeding the sales pipeline by helping identify the right people from the right companies segmenting for that audience, figuring out how to extract insights from the brains of subject matter experts in the company and then deliver those insights to those right people from the right companies so that you can build a position of thought leadership and expert in your space that so many of our clients and prospects are their experts, and they’re deep experts in their craft.

Yet their advertising or their marketing spend is all about that is just, it’s just blasting a message about this is who we are and why we’re awesome as opposed to, you know, incorporating those insights from their experts and into their outbound communications and helping people being a problem solver and a guide in the buying process of their buyers.

And when you can, when you can shift to that mentality. Now all of a sudden, you’re talking about things that your audience actually cares about, and able to start conversations around things that matter to them rather than just talking about yourself. And so this is where business development in the manufacturing sector really needs to go off of shifting the spotlight to the customer and what matters to them and off of yourself.

Sam Gupta 7:07 – The shift in mindset due to COVID and need to reinvest marketing budget

So with respect to the marketing mindset that you mentioned, how this mindset is going to change, because of COVID?

Joe Sullivan 7:16

Yeah, that’s a great question. I think, you know, that there are so many unknowns still, obviously, but you know like I mentioned, so many manufacturers are reliant on trade shows like that this is how they develop business and, and a lot of them do it with a lot of success or have in the past. I mean, most of my it’s not like I’m sitting here telling my clients. You need to stop going to trade shows because most of them come back from trade shows and are quoting business with people that they met. It’s a place where they can deepen personal relationships, with existing customers and prospects and vendors, and other partners.

And so I think there’s a lot of value there. I mean, I think you need to be looking at the ROI of that. And are we going to the right shows, do we have to be going to all of these, and everything, but I think what, you know, what COVID has done, obviously, is just sort of flipped the world upside down, the business development world for manufacturers upside down, where, you know, these events aren’t happening.

If they are happening, they’re being shifted into these digital platforms. I mean, I literally before this conversation, Sam, I got off the phone with a customer who had attended Rockwell Automation, like digital event, and it was crickets all, you know, for the few days. This, I think, you know, a couple of people showed up at their, you know, quote, unquote, digital booth. And so, but, you know, can I blame them for doing that event?

Joe Sullivan 8:42

No, I mean, I, nobody knew what this was gonna look like. And in the live event setting, it was, it was largely successful for them in the past. So everybody’s kind of figuring that out on the fly.

But I think what we know for sure is this we know that in-person interactions matter, like we being in front of people, real human having a real human to human conversations in a room with somebody matters. On the business development front, no questions there. There are very few people I talked to who wouldn’t say that that’s true.

We know that this has been disrupted because of the inability to jump on a plane and fly across the country and see a customer or a prospect. We know that the trade shows are canceled, and for the most part, and that, you know, we’re not really sure if these digital events are worthwhile or driving any kind of measurable positive ROI.

Joe Sullivan 9:38

So comes down to then what do we do in the absence of trade shows and travel? How do we continue to build real human relationships? How do we continue to fill our pipeline in new ways, considering the ways we used to do it aren’t possible anymore and so a few things that we are seeing working, you know, ticked has taken some experimentation this year to, you know, sort of reacting to everything that’s going on.

But one thing that’s really working well, for a few of our clients is more personalized live events that you are putting on on your own. So as opposed to, you know, jumping out paying the fee, and setting up a digital tradeshow booth that nobody’s going to show up at putting on your own live event. And it’s as simple as a webinar, you can literally get your zoom account up and running, you probably got one already paid an extra $40 a month to add the webinar feature to it.

Joe Sullivan 10:33

And now you’ve got a platform to teach your audience. So you know, let’s just say that you take two of your two of your engineers or deep subject matter experts in whatever, you know, whatever it is, you do, and you think about what are the things that were the common questions we’re always getting from our best customers and prospects, what are the things they’re trying to learn during their buying process, the comparisons they’re trying to make between different products or services or materials or solutions.

Let’s teach about that. Let’s have a 20-30 minute teaching session where we’ve got our two experts to sort of going back and forth on this topic, let’s put a little of that media budget that we used to spend on trade shows or, or whatever, let’s reallocate that to targeting people with this job title from this type of company, in this geographic region with these interests, and let’s drive them to this live event.

This live webinar we’re putting on now you’ve got a platform to share thought leadership in front of these people, you’ve got the ability to engage with them one on one, one on one through a live Q&A session at the end of the event.

Joe Sullivan 11:46

You’ve established a warm personal connection with somebody in a human way your cameras been on they see your face to hear a voice. And this is such a more effective way to be able to try to build a human connection than, at least in my opinion, and from what everything I’ve heard and observed this year, than trying to attend these live events, or, I mean, jeez, it’s just so difficult to figure out ways to do it. And that’s one way to do it.

You know, another way to do it is what you’re doing here, Sam, like launching a podcast where you’re interviewing, can you interview people who are in your target audience, and talk to them about the challenges they’re trying to deal with and the things they’re trying to achieve? interview your future customers and build relationships that way.

And in the process of doing so, it’s like market research for you. You’re asking them about the things that the challenges they’re facing, and the things that they’re they’re trying to figure out how to do. So there, that could be another way to do it.

But I think you’ve got to figure out ways to, replace the lack of human interaction that you know, was there with trade shows and being able to walk into a customer prospects office and sit down around a table with them or have lunch or dinner with them? We got to find new ways to do that, and ways that you can do it in a scalable, replicable way.

Sam Gupta 13:13 – Successful webinar strategy with a fraction of tradeshow marketing budget

Yeah, I agree with that. In fact, with COVID, I think some of the habits are going to change, even if the trade shows are going to be back. So we still have to rely on some of these channels, because customers are going to hang out here. I mean, if somebody is used to listening to podcasts, and webinars, they are not all of a sudden going to go back to a trade show.

Yes, they’ll go. But still, I mean, they’ll still come back to podcast and webinar. So, Joe, I can see that on LinkedIn, you guys are doing amazing work with your manufacturing customers. And I would like to hear any stories about your customers, the kind of you know, work you have done, what were the challenges before when you started engaging with them? And what were the results? Do you have any stories that you might be able to talk about?

Joe Sullivan 14:04

Yeah, sure. So you know, I could talk about it from a few perspectives. But let’s go back to this idea of a webinar, for example. So we talked about the idea of driving people to a live event and but the beauty of an event like that is not only having the opportunity to share your thought leadership and expertise in front of them around things they care about, and then to engage them in conversation, but it’s what you can do after that event over.

So whether it’s a podcast episode like this or a webinar, you can take the recording of that file, and now you can turn it into a variety of what we would call micro-content. You know, think about, think about Sam, for example, on this interview you listen back to this after the recordings done, you say okay, what Joe said from minute 10 to 11 and a half and a half was something I know is gonna resonate because I hear you know, I hear that question all the time from customers.

Well, you could take that minute and a half soundbite and turn it into a little audiogram, like sound wave video that you could, you could then deploy through LinkedIn, or Facebook or Instagram or wherever your audience consumes content or spends their time, you got to target tightly, of course, and say, you know, show this, again, as I said earlier that people these job titles in these geographies with these interests.

Joe Sullivan 15:28

So, you know, all these, these little assets can be made out of that. And then you’re just feeding it all right back into the machine, where you use those things from this podcast episode to promote your next podcast episode or promote people to subscribe or if it’s a webinar to get people to the next event or to drive them back to your website and consumer.

A case study related to that thing, that insight that was talked about in that little short clip. So this is the type of stuff I mean, one of my favorite case studies is ourselves. My two senior strategists, Julian and Matt, have started every other Monday at 2 pm. Central, they’re running a, what they’re calling an episodic webinar series, called industrial marketing live. And it’s essentially, the subscribers to this webinar series.

They’ve got a calendar invite on their calendars every other Monday for the same time, just a recurring zoom calendar invite. We’ve got over 170 people subscribed after, you know, two months that, you know, probably 40-50 show up for each event.

They’re learning from us about different industrial marketing topics and engaging in live Q&A. And we are, we have our building pipeline from this, we are quoting business directly from this and there are zero reasons why a manufacturing organization can’t be doing the exact same thing.

Sam Gupta 16:51

Okay, so tell me a little bit more about the 170 people that you just mentioned, you know, how you are getting them what kind of audience it is.

Joe Sullivan 16:59

Sure. So, you know, for us, we target mid-size manufacturers. for that particular event, we’re targeting, we’re targeting people in marketing roles. So marketing directors, marketing managers, CMOs, people who are responsible for marketing inside of manufacturing organizations, my podcast on the other hand, which is called the manufacturing executive targets, manufacturing executives, so CEOs, and VPs of sales presidents people in the C suite of manufacturing organizations, and so they come to a different audience or different personas, same types of companies, manufacturing organizations that do probably, you know, $10, or $20 million to $200 million a year in sales is kind of our sweet spot.

And what we’re doing is we’re producing content very targeted for them and around the things they care about. And then we’re putting a little ad budget behind it, to get it out there. So we’re using largely LinkedIn, some Facebook, to target those exact people, and even going as far as to say, you know, hey, LinkedIn, these 2000 companies, we want to show it to people with these job titles from these companies, these exact companies.

Joe Sullivan 18:10

And now we’re sending we’re essentially distributing thought leadership content across these social media platforms. We’re doing it organically as well posting these things through our personal profiles and building networks that way, but we’re amplifying the reach of that content by putting a little bit of paid media budget behind it. also been organically and manually building a list of these people’s email lists.

And so every other Wednesday, we distribute this content to over 4000 people in the manufacturing space, via email, organically, you know, on our blog, we’ve for over 8-9 years now we’ve been writing purely resourceful content for manufacturers about how to do marketing. And you know, we do google search, industrial marketing, or industrial marketing agency, or manufacturing marketing, you’re going to see us in the top three or five spots, if not higher, very consistently.

So we’re, we build top a funnel pipeline through that organically as well. So these are kind of you’re attacking it from a variety of different angles. Some of it is I look at SEO, Search Engine Optimization, or SEO as a long-term strategy. Way to build equity in the search engine, it’s kind of like owning real estate in the search engines.

And but then you need to supplement that and do some proactive things like you know, building your email list, distributing content that way using these paid social media channels to go directly at the types of people you are trying to reach and put thoughtful, insightful content, case studies, things that matter to them right in front of them and do it proactively.

Sam Gupta 19:50 – How marketing budget and results differ for manufacturing

Okay, so one of the things that I noticed when we talk about marketing for an agency versus marketing for let’s say, something like ERP or for the Manufacturing product, talking about manufacturing product is always harder than talking about sales and marketing.

So sometimes you might get a lot of traction based on the content that you are producing. But do you have any stories where you actually spoke about a manufacturing part or manufacturing machinery, and still you were able to generate the audience?

Joe Sullivan 20:20

Sure. So one of my favorite case studies or success stories, I tell this one all the time, is from a client of ours. They’re called CK Power. And they’re essentially a diesel-powered engine and generator, manufacturer and distributor based in St. Louis, this was a few years back.

But you know, these guys, they essentially, as we learned from talking with their sales team that all the conversations probably three, four years ago were about these EPA regulations that were on the horizon called final tier four.

And final tier four was, it was really about emissions control for engines and generators and environmental regulations that had to be complied with.

And so they were, you know, fielding calls from their customers and prospects about, you know, how do I retrofit my existing equipment to be compliant with these new regulations? Like, I don’t understand the ins and outs of what these you know, things mean, these, you know, technical sub-points, when I’m buying new equipment, what are the things I need to know, make sure I’m being compliant.

Joe Sullivan 21:31

So they found themselves sort of being sort of developing this wealth of information internally about the subject of final tier four. So we, that’s the kind of insight that needed to feed their marketing strategy.

And so we worked with them to develop a whole Bank of content that would be purely educational in nature, this stuff wasn’t about CK Power, and what they did, it was about how to deal with final tier four, how to prepare for it, what you need to know what you need to be doing what you need to be thinking about as you’re budgeting, I can be retrofitting your products, we just made them the best source of information online around final tier for as it relates to engines and generators.

So organically, we had a lot of success in the search engines, meaning you know, that the unpaid like the natural search results, because we turned them into a resource, and we taught the search engines that there is a credible resource for final tier four. So they watched their inbound leads really skyrocket over the next year, for searches that came through things related to final tier four.

Joe Sullivan 22:34

And, and there, you know, their quoted business and actual resulting revenue from that kind of followed suit where there was something like 800,000 to a million in sales over the course of the first quarter after this stuff went live was attributable to, you know, organic search around final tier four.

So this was a few years back, if I were doing this today, we would not only have developed all this amazing content and let and let you know, people who are out there looking for it show up at their doorstep through Google searches.

But we would also say, okay, who is this content for? And we were writing it for a very specific type of buyer persona from a specific type of company, I’d be simultaneously saying let’s go make sure we get this content proactively to the exact same to that audience through, you know, putting some ad dollars behind it and distributing it through LinkedIn, maybe Facebook through seeing what we could do with YouTube. And so anyway, that’s kind of there’s a tangible example for you.

Sam Gupta 23:34 – CFOs’ fear of losing marketing budget dollars

Yeah, that’s a great example. In fact, to me, see, I would like to go back to your topic about manufacturers not having the appetite for marketing, and not doing marketing as much. If you think from the CFOs’ perspective, they are the ones who are actually writing these checks.

And if they have never done it before, it could be a fairly scary experience, writing the check down, and you have no idea what you’re going to get back. So let’s say Joe if you were the CFO, and you have no idea what you are going to get back from your marketing initiative.

How would you start as a CFO on the marketing initiative?

Joe Sullivan 24:16

Well, what blows my mind, first of all, is that these companies continue to throw $5,000 a month into print ads and trade journals and going to trade shows where there isn’t any measurable ROI.

Again, I’m not an advocate against I’m not saying don’t go to trade shows, but there’s so much waste already. And, and people doing things that aren’t even measurable, like the beauty of the type of marketing that I’m advocating for here is that everything’s measurable, you know, like you could literally, you develop an amazing piece of content for a specific type of buyer.

You put a $1,000 ad budget behind it for two weeks, and you see what it delivers. You know, are we Generating visibility and engagement from this? are we driving website traffic? Are we you can look at, you can look at a two-minute video you publish through LinkedIn and say, you know what percentage of the people that this reached watched 75% of this video if somebody’s watching one-year subject matter experts talk for a minute and a half on a two-minute video or more like that, that means something, it means that there is engagement there and good things are gonna follow.

Joe Sullivan 25:29

And then as you start, you can trace all this stuff, you know, what, what were we able to? What traffic? were we able to drive through these LinkedIn ads versus through organic search? which pages? Were the ones that through organic search drove these leads? What happened to those leads, which of them turned into the actual pipelines like which did we quote, business with, and which ones closed, and were these the right types of customers, all this stuff is measurable and traceable.

So, you know, I think that, of course, there’s some leap of faith, you have to take at the beginning because there’s an investment to make, you can’t, you can’t just start with $1,000 and just go, like, there’s got to be some strategy work that’s done that you need to do need to develop content.

Either if you’re either your team’s gonna make it, or you’re gonna pay somebody else to help you make it. So there Yeah, there’s some foundational work that you need to do to get you off the ground. But, man, I’ll tell you, it’s, it’s the way I see people wasting money on things that you can’t measure, and have returned nothing year after year after year. I don’t know why you wouldn’t go down a path where you’re setting yourself up for long-term success and doing things that, you know, you can actually trace ROI too.

Sam Gupta 26:51 – Marketing budget pilot strategy to explore new initiatives

Yeah, I could not agree more. In fact, I think the issue here is really the comfort zone, and it’s hard to challenge the comfort zone.

So let’s say if I have been spending my $5,000 for the last 20 years, and whatever is I perceive it to be working, it’s just working that way. Okay, I know that if I spend $5,000, this is what I get back, versus trying something new.

So obviously trying something new, is always scary. So let’s say if you were the manufacturer, and if you were the CFO, and you want to pry, you have maxed out on the budget and the and the dollars that you have, how would you start? Would you take the 80-20 strategy? Or, would you take a 70-30 strategy? Would you invest everything that you have got at this point in time in the new channel only approach this?

Joe Sullivan 27:40

Yeah, it’s a good question. And I think people do absolutely get locked into their comfort zone. But I think, you know, this is right now You and I are recording this in November. And you know, by the time it goes live, it’s probably you know, we’re looking at the New Year here and who knows what, what decisions have been made already.

And from a budgeting standpoint, but like, I think as you look at your budget, you need to say like, Where are we? Where do we know we’re getting something positive. I mean, if you go to this trade show every year, and you come back with and you’re quoting business, or you’re building relationships, Like, figure out how you’re going to measure what value you are creating from this channel. And as you look at the print ad, you’ve been running for the last, you know, 13 years in your industry trade journal that costs you three grand a month, like, look at that heart and say like, is what is this returning for us? What is this doing? Is it just our logo in front of, you know, our audience who browses through this magazine regularly?

Joe Sullivan 28:37

And is that really the best spend of $3,000 every single month when you could use that $3,000 to distribute an amazing piece of content to very specific people and guarantee consumption of that content? So you know, it’s a tough question that to answer but I would just look really hard at where you’re spending that dollar now.

And if you’re not spending that dollar which frankly a lot of manufacturers just because they don’t understand the value of marketing and they don’t understand what it should be doing they’re not even spending on marketing but not now what you’re doing is you’re relying on your sales team to go out there and cold prospect business and you know, cold call people and who’d frankly don’t want to hear from you in the first place because you’re a salesperson and you don’t know if they’re anywhere in the buying process or not.

So you got to start somewhere. I think it all starts with a really clear strategy like you have to look at and say what’s the business outcome we’re trying to achieve here? Are we trying to grow by 10 million and in new sales next year? Are we trying to grow by 50% look at your growth target and then work with somebody who can advise you on how to get there, you know, don’t focus on a lot of marketers are measuring the wrong thing too their they’re like, you know, we need to rank first for this in Google, or we need to drive this much more traffic or we need this many more leads. And I was just asked a question. Why?

Joe Sullivan 30:00

And it always comes down to? What is it? Because these are the things that are going to get us to this sales goal. Okay, well start with the target, start with that new sales target or new customer acquisition target and work backward, how many qualified opportunities you’re quoted opportunities do I need in my pipeline to hit that sales target? Based on our close rate? Right, step back one further, how many sales-qualified leads do we need on our sales team’s plate to be able to quote that much business?

And then you build your plan from there? Or the trade shows you’re going to right now? filling your pipeline with enough of those opportunities to get you there? Is the trade is the print ad that you keep running? Or the direct mail campaign you keep running? Or that you know, the salaries, you’re paying these people to cold, cold prospect for you? Is it getting you to those quoted opportunities that you need to hit your sales target? And if the answer’s no, then you need to look hard at what you’re actually doing and figure out a better way to get there. And there are so many great ways to do it digitally and in a measurable way, through marketing.

Sam Gupta 31:05 – 30-60-90 marketing budget allocation and plan

Okay, as a manufacturer COVID was a huge wake-up call for me, my sales are down 50% at this point in time, so yes, the comfort zone was working previously, but now I need to try something new.

So I’m definitely sold on what you are, you are saying? So let’s say Joe, if I want to work with you, what would be my 30-60-90 day plan?

Joe Sullivan 31:28

And just to clarify, you’re talking about if somebody were to work with us with our company, like what would that look like?

Sam Gupta 31:34

Yeah, so let’s say if I’m a manufacturer, I’m starting on my marketing journey, I have no idea how marketing works, and how I should be investing in marketing, I’m coming to you for help because I need help. So what would you advise in terms of a 30-60-90 day plan?

Joe Sullivan 31:50

Sure. So, if we were working with any manufacturer that we work with, we start the exact same way, we go through a process we call the industrial marketing roadmap, and whether you do this with us, or whether you do it with somebody else, their version of this, it needs to start with strategy.

That is my number one piece of advice for you do not, you know, do not start by saying we need to do search engine optimization, or we need to be running ads on LinkedIn or we need to be, you know, producing content, you need to start with a strategy to get to the business outcome you’re trying to achieve, like I was just talking about, you know, whether that is a sales target, or a new customer acquisition target, or even a pipeline revenue target, you need to start with the business outcome you’re going to achieve that you’re trying to achieve.

Joe Sullivan 32:50

And you got to figure out how are we going to get there. And that’s gonna vary from one company to the next. If you’re a, you know, a huge company in your space, a big player and you’ve got a ton of authority in the search engines, as you do in real life, it’s gonna be a very different strategy than if you’re, you know, a smaller fish in a pond where there’s, you know, lots of big players and or just lots of competition, in general, you’re gonna have, you know, you’re not going to have the same path to get to those results.

So you need to work with a strategist who can help you evaluate, you know, how competitive your spaces how you’re going to beat those companies, frankly, and get to your target audience and deliver a message that’s going to resonate with them and deliver a plan there.

Joe Sullivan 33:23

So if you were working with Gorilla, my company that the process would be our industrial marketing roadmap where it’s, we spend a half-day with the CEO, the President, the VP of sales, the head of marketing, and usually, a few key sales engineers or sales professionals who interface with customers and understand them and know that you know, understand the things that they care about the questions they ask.

And we learn from them, we dive into you into, you know, all those things, the buying triggers and pain points and common questions of your customers, we look at your competitive space out there.

And then we take a few weeks, usually about two, three weeks, and we go do some research, we develop an overarching strategy and a specific action plan for how you are going to get from point A to point B, where you define what point A and point B are, with the resources you’ve got, which means you know, either your budget or your internal staff or some combination of those two, but it’s got to start there.

You need a roadmap and a strategy and an action plan to get not to those marketing KPIs, but to the business outcomes that you want to achieve as a company, and then you and then you implement from there.

Sam Gupta 34:34

That’s it for today. Joe, do you have any final closing thoughts?

Joe Sullivan 34:40

I don’t think so. Other than you know, kind of just reiterating something I said earlier, which just takes a look a hard look at where you’ve been spending your marketing dollar in the past. And ask yourself, honestly, what are we doing? What is this generating for us? What business outcome is this tangibly creating for us?

And if it’s not measurable, if it’s not something that’s moving your business forward in terms of, you know, growth at a company level, then you’re probably doing the wrong thing, or you need somebody to look hard at it for you and help you figure out how to adjust that strategy.

Sam Gupta 35:20

Yeah, I completely agree with you. I think measurement is the key. If you cannot measure then I would definitely be cautious in spending that dollar. So thank you for that thought.

Joe Sullivan 35:29

You bet.

Sam Gupta 35:31

Okay, amazing. Joe, thank you so much for your time. Really appreciate it. And you have a wonderful day.

Joe Sullivan 35:35

Thanks for having me, Sam.

Sam Gupta 35:37

I cannot thank our guests enough for coming on the show for sharing their knowledge and journey. I always pick up stuff from our guests, and hopefully, you learned something new today.

If you want to know further about Joe or Gorilla 76, please visit gorilla76.com/learn where you will find an ever-expanding collection of articles, videos, guides, and tools to help manufacturers identify attract, engage, and dry sales with ideal fit customers. Links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business. You might want to check other related episodes, including the interview with Chase Clymer from ElectricEye, who brings a unique perspective on DTC from the angle of ecommerce toolset and Shopify. Also, the interview with Michael Begg from AMZ advisers, who touches on DTC from Amazon from a marketing channel standpoint.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform or DM me on any social channels. I’ll try my best to respond personally and make sure you get help.

Thank you, and I hope to get you on the next episode of the WBS Podcast.

Outro 37:09

Thank you for listening to another episode of the WBS podcast. Be sure to subscribe on your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.