Trim the Pipeline, Grow the Bottom Line: Brad Davis’ Playbook for Mature Manufacturing BrandsTrim the Pipeline, Grow the Bottom Line: Brad Davis’ Playbook for Mature Manufacturing Brands

Trim the Pipeline, Grow the Bottom Line: Brad Davis’ Playbook for Mature Manufacturing Brands Transcript:

Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White, and joining me today is Carman Pirie. Carman, how you doing, sir?

Carman Pirie: Look, I can’t complain. I know that this is, we’ll probably be released on a Tuesday, but we’re recording this on a summer Friday pretty hard to complain about that.

And always a pleasure to be recording with you. Good start.

Jeff White: Yeah. Yeah, likewise. And it wouldn’t be Atlantic Canadian if we didn’t mention the weather at least once.

Carman Pirie: Yeah. I know. We need to… there’s a quota.

Jeff White: Yeah, there is for sure. Our check is in the mail. But yeah, I’m looking forward to this conversation because a lot of the organizations that we work with, a lot of the companies that have been represented on this podcast, are long-standing, mature companies. There are some very unique things that you need to deal with when in terms of creating strategies for growing those companies.

Carman Pirie: Yeah, exactly. Mature companies in mature spaces. It begs the question of marketers, like, what now? It can easily, I think, seem like a lot of the low-hanging fruit has already been plucked, so to speak.

And so yeah, interested in diving into that challenge.

Jeff White: Me as well. So joining us today is Brad Davis. Brad is the Director of Sales and Marketing at Charter Wire. Welcome to The Kula Ring, Brad.

Brad Davis: Hey, thanks, guys. Happy to be here and thanks for everything you do. We need to keep manufacturing strong in North America, so we appreciate what you do.

Carman Pirie: Yeah, appreciate that, Brad. Thank you so much. And it’s wonderful to have you on the show.

Brad Davis: Summer’s coming in Milwaukee, we’re not there yet. So July 3rd is when it’s.

Carman Pirie: So if my memory serves as Milwaukee in that part of the world, that when it does arrive, it’s a full bore.

Brad Davis: Yeah, it comes, we go from not-so-great to a nice day here and there pretty quickly.

Carman Pirie: There’s a place up here in Nova Scotia, Cape Breton, which is famous for having some challenging weather at times. So the old joke is What did you do last summer? And it was we who played baseball that day. Yeah. Good to be chatting and wanna let our listeners know a little bit more about you and Charter Wire. Tell us more about the company and how you ended up there.

Brad Davis: The company we are in is unique. We’re a manufacturer of steel profiles that are sold to OEMs so they can use ’em in their process. We also make cold-finished steel bars that are sold through steel distribution centers. We use a unique process called cold ruling.

It’s very much a niche. We’re a mature business. We’ve been here for about 90 years, privately owned. And steel has been in a bit of a decline, steady decline over a few decades, as parts get moved overseas. And that’s why we’re getting some protection from tariffs right now to help boost our industry.

As far as how I got here. I’m from Milwaukee. Started in sales in 1991. Basically, because I didn’t wanna go to law school and be a lawyer, and there weren’t a lot of options back then, there are now. We didn’t have all the technology companies had, found myself in sales and an unconventional path here.

I got leadership roles in finance and supply chain, so I had a lot of different roles. And I think that gives me a different perspective. As far as being in sales and marketing now, I spent most of my career in Houston, so happy to be back here in Milwaukee, where I grew up and with a great company, with a great culture and growth.

Carman Pirie: That’s awesome. And thank you for that background. You don’t paint an exciting picture when you talk about a 90-year-old company with decades of decline in the sector more broadly. That can seem a bit daunting. How do you even begin to? Turning to a mindset of growth in that kind of environment, Brad?

Brad Davis: Yeah. I don’t mind being in a declining market. Still a large market, and we’re a niche. We have a great service model. So, to me, I looked at it as an opportunity. I started here in 2018, so I’m in seven years. When we grow, when we started, we were looking to grow, hadn’t grown in a long time, so we had a blank slate to create some growth opportunities, which has been super fun.

And a lot of the businesses that I go to, a lot of the plants that I’ve walked through over the years I see a lot in the same boat where companies have become very efficient at what they do over decades. And it really puts ’em in a position because they become so efficient to where they become hard to compete against, but on the other hand, it’s hard to grow because you’ve concentrated on doing what you’re doing for so long.

So to me, I see it as a good opportunity to create growth because you’ve created a good situation for yourself.

Jeff White: that, you talk about those efficiencies and you’re almost at the most mature, best version of yourself when you’re talking about the organization that way.

How do you then look at that and look at what one assumes are mature competitors as well, who are also striving towards those levels of efficiency in production? How do you differentiate yourself? Against those other organizations and stand out and compete.

Brad Davis: Yeah, I think the way we did it is when you start you look at the three things, you look at your sales team, your sales process, and your sales strategy, and you wanna be great at all three of those to create the growth.

We focused first on sales strategy here and. One of our first moves was hiring a strategic marketing manager who just focuses on upstream marketing. So what that role does is they build a deep understanding of your business differentiators, and they connect those to positive customer outcomes. And that’s the first step.

It’s basically what the person does full-time, and I think if you’re not. If you’re not doing that or you haven’t done that for a while in your company, that’s where businesses get stuck. When they start. You know what a typical business would do is create a pipeline. I’m just gonna create a big pipeline of sales opportunities, like 10x what our targeted growth rate is and approach it that way.

And then just, look at sales to go bring in purchase orders. And we did actually the opposite. We had a pipeline like that, very large, much larger than our target growth. And we actually cut it back to less than two x from 10 more than 10 x to less than two x, only focusing on what’s actually in our sweet spot.

And something that has a very high probability of success. And what that does is it relieves the business from chasing. Working on things that you’re more efficient at than your competitors. And if you have, you build a big pipeline, it makes no sense because you’re wasting your time and resources.

Another company can do it more efficiently than you can. It doesn’t make sense for you to go after that opportunity and be in that chase mode.

Carman Pirie: This is a really interesting hinge for me ’cause I, I. Part of me was thinking that the drive towards efficiency and the efficiency ruling all would be a tough environment to e out additional marketing spend.

But then you just answered the question before I asked it because you’re like, no, we actually drove to make the pipeline more efficient too.

Brad Davis: Yeah. But we wanted to grow. So we focused on that value proposition and. We knew we, our customers were very happy. I think a lot of these companies are in the same boat, that they have had these long-standard customers for decades.

Probably a great service model to where things run very smoothly. And so we just wanted to expand our niche, focus on our current products, our current customers, what’s working and innovate around that. Different growth opportunities or growth ideas? I think, in the strategy work it’s the same sort of chasing concept where I think companies get into this, where they’re putting all sorts of ideas out there and chasing new growth ideas to where we took another different approach where we’re narrowing the ideas actually taking.

We took a couple of years before we really honed in our strategy go looking at the outside market and like you were talking about before, what are the cus what are the competitors really good at. What’s happening in the marketplace before we really make those decisions? And then what we did is we layered, we used a concept called Horizon Growth Opportunities or Horizon strategies.

We look at things that we can do right now with our current capabilities. Our first horizon, then a second horizon where we might have to add a piece of equipment, do something different use capital to grow. And then the third horizon would be something new that you’re doing or creating something new.

So that’s how, how we layered out, our growth strategy.

Carman Pirie: If I could speak that back to you a bit, is telling us that kinda step one is to trim the pipeline, get rid of the vanity metrics and the stock chasing marginal fit opportunities. Focus on the core. And then as you begin to solidify that foundation and you start thinking about that horizon strategy model that you just mentioned it’s fair to say then that what you find on the horizon is more tightly aligned to your core capabilities.

So it makes it so you’re it’s a more reliable bet.

Brad Davis: Exactly, and there’s usually a few different options, in your her model. Hopefully, there are a few different options, but you explained it perfectly. A suggestion I would have as far as, when you move into the execution stage of a Horizon Two idea is to pick one thing and focus on it.

We’ve talked about chasing a little bit, but typically, in my experience, there’s really one thing that. You, the team come up with that. Say, okay, this is the one thing that we know can reliably produce growth. And if you can get it to the one or maybe the two things, put your time and energy in that.

If you have, if you’re doing okay, here are 10 of our growth initiatives we’re gonna do this year. That’s where you’re gonna fall flat. If you just do the one and focus on that, typically you’re gonna know which it is. Get that, get the execution on that item and get the growth.

Jeff White: I love the focus.

Really applaud that. That’s it’s smart and it feels the right strategy to approach that in that way. Are you primarily doing this with existing accounts or how much of this is actually focusing on winning net new business with the core processes that you know, you do Well?

Brad Davis: Yeah, exactly. I think we focused on innovating what we’re doing with our current products and current customers, so, what we did is the customers are really like us. We’re adding items that they already purchased that we could provide that help ’em. Either velocity makes it easier for them to optimize by buying more from us.

And if they’re telling us they want us to buy more from us, but also through our strategic work, we’ll identify a market with that approach that we could get that we hadn’t had before. So it’s serving your customers, innovating around our products, but also it gives you entry into a new market.

Again, took some time to recognize this, but, that’s how we decided to move forward with the.

Carman Pirie: I would have to imagine mature manufacturers fall victim to this a little bit more. This idea like, that it’s easy for them to understand and see all of the complexity in an industry, and they’ve been at it for so long.

I. They could, I think, probably quite easily find themselves serving markets or conducting activities that aren’t particularly profitable. And they probably really need this requirement for focus is probably even more acute for them.

Brad Davis: Yep. I think one, other trap is, that an executive might be looking for quick results.

What’s the big opportunity? How quickly can we get purchase orders without looking at or having a good understanding of the strategic fit and the differentiators? And I think, that pressure, that tendency to go for quick growth is really hurtful because, if you’re trying to grow too fast or do too many things is the trap for a mature company I think.

Another tendency I’ve seen is for us it’s, we don’t just look at growth, we look at sustainable profitability. And for this, we like to leverage fixed costs as much as possible and avoid that tendency of, oh, we’re gonna create growth. We’re gonna build a new department That.

Because you’re adding costs, which is harder to leverage to create profitability. And you’re also losing the ties within the business. You should be working in the business to create strategy rather than outside the business, create the strategy. That’s another tendency to avoid.

Carman Pirie: I have often wondered about that innovation department model. Yeah. When it Oh yeah. No. The rest of the company, oh, you can count on us to be boring and not moving forward at all. That’s the innovation people do. The innovation, yeah,

Brad Davis: exactly. That doesn’t work. And it’s, I think that’s the.

The larger corporations seem to do that more often.

Carman Pirie: Yeah, I do sometimes the incubator model I could make an argument for it in certain corporate environments, but I also tend to have a similar inclination to you towards, as I think about it, I wonder, Brandon, we get. Have you faced any pushback on this approach?

Because I think, sometimes marketers get by selling hope and opportunity and visions of what could be that maybe never come true. But man, you’re taking a very super practical approach here. But ha have you, how have you found that approach has landed with the ownership and powers of b.

Brad Davis: We’re lucky here. That’s a great question because it’s not always popular, to go slowly and be that focused and narrow, but our ownership’s really really on board and very supportive of the approach being methodical and I think overall as a company. That fits really well with a long-term approach.

A fourth-generation company that wants to look at the long term. That’s always how the company’s been. So we’re really lucky. And I would, I’m really thankful that we take that approach and not because I’ve been in the other position, it’s it’s not easy if you’re, somebody’s looking for.

You would describe it as quick growth, what’s the next opportunity fast and what wants to do things? That puts a lot of pressure on quick activity.

Carman Pirie: Yeah. Forces marketers to suggest that things are more certain than they are.

Brad Davis: Yeah. We are optimistic about things, but we also are pretty analytical and test things before we do it.

Take our time, ask a lot of questions and really pressure test our ideas before making a decision. So

Jeff White: how are you, how are you tracking this? Are you managing this within any form of CRM and technology that’s showing that the strategy is working?

Brad Davis: Yeah a good question.

We have, we do have the CRM. And we do have our metrics, but we do it a little bit differently. Filling a CRM is fine, but I think it creates frustration in a business because you’ll gravitate toward, okay, we have a lot of things in front of us we could get right now.

How soon can we do it? And, but it also creates. An environment where the people who are responsible for executing go into survival mode and they’re just gonna put in big opportunities, and we’re gonna do these at a very later date. So they don’t, they’re not, they don’t have the accountability to drive it home.

And then the managers are I think there creating frustration because they wanna see accuracy in the CRM. And they’ll get to these, they’ll get to these meetings and they’re just questioning how things are moving and why things aren’t updated correctly. So I think, 98% of the people who have these sort of discussions are probably not happy with the way they’re, the, these meetings go.

So I, you have to, the way we look at it is more efficient as far as moving these. What the discussions like the Howard, our strategy discussions, our pipeline movements we’re like tracking are we, are these working or not? Do we are working on too much, or not enough? What’s moving through? What’s not moving through?

So we’re looking at the efficiency of the process rather than just updates.

Carman Pirie: I’m curious if you would suggest that if you found any drawbacks to the approach? And don’t get me wrong, I think this feels like the approach is great, it is, it seems like it’s the right approach and right strategy for the right type of business.

But I’m just, is there any kind of shadow side to it that you’ve seen? Do you sometimes, I don’t know, feel like you move too slowly because of being this methodical, as an example?

Brad Davis: Yeah, that would be, I think, a drawback, is you might miss an opportunity. There are a lot of there are opportunities that come up in the market because the pandemic was a good example of things really roaring back.

So you wish you had certain capabilities to take advantage of that. And now the tariff situation obviously changes a lot, so you wanna be prepared to. Catch anything that comes your way. So the methodical approach, I think, is that some things we wish we did differently is make decisions a little more quickly.

But then again, we’re in it for the long term, whether there’s supply chain shocks or tariffs or this or that, it’s not gonna affect what we’re doing 10 or 20 years from now. So that’s what we try to keep in mind.

Carman Pirie: It’s hard to have your cake and eat it too in that regard. You can’t say the whole benefit is being methodical and slow and focused, and then say, oh yeah, now we’re gonna.

Jeff White: turn on a dime.

Carman Pirie: Yeah.

Brad Davis: Although I’ll say if you’re, interfacing with operations a lot and we’re a little bit smaller we’re well connected to operations, it’s. Not chasing and not wasting operations time on going after projects that don’t fit, I think is appreciated.

Carman Pirie: Yeah. That probably keeps people a hell of a lot happier, I would think.

Yep.

Jeff White: Yeah. Oh, we actually know how to do this. Yeah.

You’ve touched on it a couple of times and I’m really interested to know how have you found it. Since tariffs have been implemented and those discussions have started has it actually had a positive impact on the business?

Brad Davis: It’s been neutral for us. We do have a steel mill with charter and they’re having a positive impact.

I think the tariffs are more protective of the steel mills, and I think the tariffs here include downstream products more aggressively than they have in the past, with fewer exclusions. So it’s, we think it’s gonna have a positive impact. But it needs, you need a strong end market as well.

But whether parts move parts are manufactured in China or now they’re manufactured in the United States, you.

It’s only gonna be more positive than negative for us. I

Jeff White: Appreciate that response.

Carman Pirie: Yeah, I think that makes sense. Of all of the sectors where you’ve seen tariffs applied, the one where you can see for the incumbents within the US where that be of some help.

Yeah, I think the long-term bet remains to be seen as Brad mentioned we actually see repatriation of manufacturing capability in a bigger way. I think we can everybody’s probably do well to be a bit skeptical of that, but we’ll see. Curious. Taking this approach, how do you feel how do you feel it connects with the modern world of marketing?

In some ways. So much of what we see in marketing these days, I like to beat up on SaaS people, but, it’s a, it’s about fast-moving things. What’s happening right now? What’s generating results this month? Sometimes, it feels like this is just a completely different world in terms of how you’re thinking about it.

Brad Davis: Yeah, I think it is. I think marketing is actually involved as a profession. More positively than the sales has evolved. I think the sales profession in general is not a good place. The marketing seems to be more analytical getting defining or evolving with the times better, looking at using analytics and that’s how we use marketing where the downstream marketing doesn’t.

Really do much for us with, a niche mature business. But upstream marketing and being strategic and analytical, I think is evolving really nicely.

Carman Pirie: That’s a fair point that it would that would, I could see where mature industries where the more analytical nature of today’s marketing would align with that.

Yeah, that makes sense to me. I’m curious about that comment about sales, though. What do you think, what do you’re. Have you spent more of your career? I think on the sales side, the marketing side,

Brad Davis: yeah. It’s a sales team, having a great sales team is really important. It’s your contact point for customers.

I just think the profession over many decades as far as hiring and training techniques has been not good. I think overall. In manufacturing the data would say that CEOs and presidents aren’t happy with sales leadership in general, and there’s a lot of turnover, and that’s just the data.

But if I was, if you say somebody is, Hey, I know a guy, he is super salesy. That’s not a positive, description of somebody.

I want somebody who’s gonna listen, who’s very curious, who’s strategic. And we like to have a rule where the customer’s talking over 70% of the time. And, when I see salespeople, I’ve travelled with salespeople throughout my career. It’s more, talking about themselves and showing, talking about their presentation without asking a lot of questions, it doesn’t do any good for the company.

And, that’s what manufacturers have hired for and trained for over a very long time.

Jeff White: But man, like hiring within manufacturing is hard enough. Hiring an empathetic salesperson within manufacturing must take it to another level.

Brad Davis: Yeah. And that’s where I think companies need to take that seriously and use outside professionals.

I don’t have the time to. Train with salespeople all the time, but you look at how important it is, and how coaching is used in other professions. , we use it here where we use sales coaching external sales coaching to help us and do more gets deeply involved in people’s personalities and how they react to customers and help them improve.

I probably do not use it very often in mature manufacturers, but it’s important enough to, I think we need to do a lot of that. As far as an industry, it made the customers overall happier and improved the reputation of our profession.

Carman Pirie: Brad, this has been a fascinating conversation. I’ve I I think the listeners will have gotten a lot of just an interesting way of a lens through which to look at their work.

Especially so many people find themselves in manufacturing organizations that are, I could say 90, a hundred. I think we had one on the show here recently, over 200 years old. And this is an important topic and I thank you for bringing your expertise to the show.

Brad Davis: Hopefully it was helpful and I had a lot of fun doing the podcast, so thank you.

Jeff White: Yeah, I did as well. Thanks a lot, Brad.