Beyond the Brochure: How to Structure a Sales Narrative Around Total Cost of OwnershipBeyond the Brochure: How to Structure a Sales Narrative Around Total Cost of Ownership

Beyond the Brochure: How to Structure a Sales Narrative Around Total Cost of Ownership Transcript:

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

Carman Pirie: Look, Jeff, I was happy until a few moments ago, but I’m somewhat happy to be here.

Jeff White: Oh, what’s changed?

Carman Pirie: I’d like to announce that we’re presently recruiting for a new producer of The Kula Ring podcast. Someone who likes—

Jeff White: —The Arcade Fire?

Carman Pirie: Yes. We are a Canadian-based podcast, and I’ve actually dined with members of Arcade Fire because Canada is truly that small. And I just learned five seconds ago that our producer does not like Arcade Fire. So—

Jeff White: Used to date the bass player’s ex-girlfriend. Is that how it worked?

Carman Pirie: That is actually true. That is true. Strange world. And it didn’t make me dislike—

Jeff White: No?

Carman Pirie: No. No, lovely people.

Jeff White: Good.

Carman Pirie: Yes. Anyway, all right. With all seriousness, I’m looking forward to today’s conversation. I think it’s going to be really interesting to dive into this and peel back the layers of how today’s guest has navigated a growth challenge here. I think we have some good stuff on tap.

Jeff White: Agreed. So joining us today is Chaitanya Sakhalkar, who’s the Director of Sales and Marketing at Teikoku USA. Welcome to The Kula Ring, Chatty.

Chaitanya Sakhalkar: Thank you for having me.

Carman Pirie: Chatty, it is wonderful to have you on the program today. Thank you for joining us. I wonder if you could give us a brief introduction to the firm first? I’m wondering what you all do over at—and it’s Teikoku, right? Did I say that correctly? Okay, excellent. Teikoku. What do you do there?

Chaitanya Sakhalkar: So that’s a great question. Teikoku USA is the company that I work for. The parent company is Teikoku Corporation, based in Japan, and we specialize in manufacturing a type of centrifugal pump used in chemical processing, hydrocarbon processing, and the nuclear industry.

Chaitanya Sakhalkar: The way I typically go about talking about the equipment or the pumps that we manufacture—whether it’s a crowd that’s not in the pump industry, so to a high school student or something—I would probably say, “Hey, you know how in the lab you have two test tubes, and you mix them together to come up with a new compound? At the industrial scale, you can’t just carry test tubes. You need pumps that are moving massive volumes of liquid and mixing them and separating them.” So we make pumps for that.

Chaitanya Sakhalkar: Within that realm of pumps, we make very unique, specialized pumps. The average pump in the industry has a sealing challenge because it tends to leak the chemicals it’s pumping. Meanwhile, when you have chemicals that are highly toxic—not just to the environment but to personnel —that could be corrosive and dangerous, you do not want them to leak at all. Our pump serves as a solution. So it’s a centrifugal pump at its root, but the mission is to allow safe operations.

Chaitanya Sakhalkar: And this is B2B, so I would say probably a couple of layers removed. Some of the common areas—or the chain verticals where our pumps are used—are when you have a headache and take ibuprofen. A few layers back, before the chemical ibuprofen was formed. Or the insulation that’s in your wall to keep things warm, particularly in Canada. That insulation uses some pretty dangerous chemicals, including isocyanates and more. A few layers before it, it all gets separated. And our pumps get used there, because if a traditional standard pump is used, depending on the chemical, you have a few seconds to just let your family members know that you love them.

Carman Pirie: That’s terrifying. Terrifying, but fascinating company. Very cool stuff. And the company has some longevity, too. Been around a while?

Chaitanya Sakhalkar: Yes. So the product itself was developed by an outfit called Chempump, which was under a holding corporation called Fostoria. And a bunch of engineers in the 1950s were approached by the Navy, and the submarine engineers were like, “Hey, we need a quiet pump. The Navy can’t be loud. It’s for the reactor water powered by nuclear.” So it was like, “Oh, okay, cool. We’ll take the motor, which is the noisy part, put it inside a vessel, and make a pump out of it.”

Chaitanya Sakhalkar: And as time went on, it was like, “Oh, wait a second. If everything’s inside a vessel, it’s the safest pumping solution that we have.” So it grew in that area. And Teikoku actually ended up, in the ’60s, making this pump independently in Japan. And in Japan, it took off more so than what Chempump could. In 2003, Teikoku was the largest manufacturer of canned motor pumps. Chempump was the original manufacturer and leader in North America. Teikoku acquired Chempump, and now Teikoku USA has this. We’re the largest in this niche, as well as the original in this niche product we make.

Carman Pirie: That’s very cool. And Chatty, how did you end up there? How long have you been with the firm, and tell us a bit about your path in getting there.

Chaitanya Sakhalkar: Yeah, it’s a great question. So I started here in 2010, and this was my first job after I graduated as a mechanical engineer from Temple University in Philadelphia. The US headquarters are in a small city north of Philadelphia called Warminster, Pennsylvania. At the headquarters, we also manufacture. And I started as an application engineer.

Chaitanya Sakhalkar: The story on the personal note, if I may add here, is that when I was in college, I was building race cars in Formula SAE—Society of Automotive Engineers—and I needed a certain type of bearings that are sold, but it had to be for the race car, it had to be at a certain angle. I was on the phone, and I talked to an application engineer who explained the loads and everything else so well that I asked, “Hey, what’s your role? How did you get here?” He said, “Oh, I was an engineer at school.” The epiphany of, “Wait a second, you just don’t have to be a design engineer because you’re an engineer. You could actually be a little more front-end facing and solve problems in that regard,” led me to choose this role over other options available at the time.

Chaitanya Sakhalkar: So I started as an application engineer at this company. A couple of years into it, I got into a regional business management role. A few years later, I became head of sales, and about two and a half years ago, director of sales and marketing.

Jeff White: Man, we’ve had a lot of guests on the podcast over the years who have taken a remarkably similar path. Arrived as an engineer—

Chaitanya Sakhalkar: Yeah.

Jeff White: —somehow got pushed into sales, enjoyed it, now they’re head of sales and marketing.

Carman Pirie: Yeah, but the application engineer inspiration—

Chaitanya Sakhalkar: That’s right.

Carman Pirie: —is very unique. I haven’t heard that story before, and it makes sense to me. I love that. It just happened to be that you were talking to somebody as part of this hobby, and that—

Chaitanya Sakhalkar: Yeah.

Carman Pirie: Yeah, just when everybody thinks that careers are incredibly well thought out and methodical from start to finish, it’s no. Little weird things happen that cause you to think about things in new ways. I love that. Chatty, you mentioned that you’ve been in this sales and marketing role for about 2.5 years. As you’ve turned your attention to that role and are looking at the growth challenge ahead, where do you start? Do you start thinking about it through the lens of brand narrative? Do you start thinking about it through the lens of new verticals, new applications, new products? It seems like an interesting kind of new mandate to be thrown into.

Chaitanya Sakhalkar: Yeah, what helped us in recent years was this awareness. Amid all the doom and gloom, human beings are becoming more aware and intelligent, and there’s more data. The awareness of, “Oh, by the way, these are the chemicals that previously we said were dangerous, and this is where we need to use the safest solution,” because that tends to be a little more expensive.

Chaitanya Sakhalkar: A little more awareness. I’ll give you an example of a chemical specifically: benzene was used—literally, like we would use water to wash our dishes—to use tools because it was a great degreaser. Years later, we now find out that it can cause cancer, or it’s a carcinogen or something else like that. All of a sudden, the circle where the dangerous chemicals exist grew a little bit, grew a little bit.

Chaitanya Sakhalkar: And to an extent, what Teikoku USA enjoyed—and in my sales role when I was a regional business manager, I enjoyed it—was like, I just have to go out and talk to people about our product and rely on safety, rely on reliability. There are other value propositions—our pumps are typically highly reliable and don’t really fail. So what we try to do, because we’re relatively small, is offer complimentary startup assistance, in the sense that we’re not interested in getting business by having our pumps fail. We want to teach our customers to operate them. So there’s that piece that is unique organizationally.

Chaitanya Sakhalkar: But what ended up happening is, as humans themselves got more data, coming back to that point, the area that we were able to cover with the same product, same ways that we were making, got bigger and bigger. So we kind of did not need to be like, “Oh, let’s hop on a marketing campaign for 2017 because this is there.” All of a sudden, people started being like, “Oh, we need to focus on net zero. How are we going to deal with carbon capture?” I know Canada has a big initiative on that. Nuclear is a bigger deal right now than figuring out a way out. AI is going to drive this demand. So we’re like, “Oh, okay, great. We really don’t have to act much to grow.”

Until this mandate came to us: “Hey, you guys have been growing at this rate. How about you try to grow at this rate?” So we went back to the table, and we were like, “Okay, let’s talk about various value propositions of why people are buying what they’re buying and how we could tackle something.”

And long story short, we basically targeted that if we could offer something quicker—meaning a similar value proposition at the product level, but instead of making it engineer-to-order, making it modularized, and managing inventory better and operations a little better—we have a way to gain that higher step increase that the investors want from us and that management wants from us. So that was one way to approach it.

Chaitanya Sakhalkar: And then the second piece came in, as we were fortunate that the circle or the area in which people thought was dangerous grew naturally because of awareness, regulations, and everything else. But what are other chemicals? What other opportunities don’t have that awareness yet because the science hasn’t caught up? There might be a chemical—we think of cyanide, and everybody knows, “Oh, cyanide, very dangerous. Let’s use our pump.” But what about something that’s caustic, that just causes a nuisance that we don’t know yet? So we were like, okay, instead of thinking this is going to grow on its own, why don’t we find a couple of different areas we could grow? And so that’s the approach that we’re taking right now. Let’s take the initiative to grow. And we have this engineered product that is modularized and as commoditized as we can make it, because we don’t want to lose the primary value propositions of safety and long-term reliability that we get from it.

Jeff White: This is less of a sales, marketing, and growth-oriented question, but I’m assuming that as you move into new—as you were saying, as that circle grew and new chemicals, we became aware that they needed this kind of safe and reliable treatment and pumping—have you had to make major changes to the product, or has it been able to translate from cyanide to things used in nuclear? I just know that different types of seals respond differently to different chemicals and things like that. Is that a process you’ve had to go through in terms of product development at the same time as you’re looking into new industries?

Chaitanya Sakhalkar: To an extent, yes. So what ended up happening was the bubble—you referenced nuclear, so I’ll leave that aside because that is outside of the two standard deviations. But let’s take hydrocarbon processing, chemical processing, commodity chemicals, and even data center–based processing, right? There are certain areas where the gasket material that we would want would be a little more robust than a standard PTFE. So we really had to tackle that, and we wanted to make sure that, hey, if you have two of these services, you’re not going to get two different pumps. You’re going to get the same pump.

How could we do that? Now, historically, we would’ve been like, “Oh, place the order. We’re going to start engineering after we get the order anyway, so who cares? We’ll decide it then.” But today, in the push of this modularity or as much as you could commoditize it, we pushed that ability to make those changes to that next circle—a sphere of opportunities built into the product itself.

Carman Pirie: And in those more—I don’t want to call them edge cases because they’re not—but as that pie has expanded, where the benefits of your pump is less of a matter of life and death and more of a matter of better, or nice to have, or delivering some serious benefit, is there still a fairly high price premium in that? Or are you priced reasonably similar to other competitors that would compete in that type of space?

Chaitanya Sakhalkar: So what we did—and the price premium was the big factor that held us up leading into the end of the last decade, which was like, “I don’t need it for this chemical. Yes, it will be more reliable, but who cares? I don’t want to spend up front.” And a lot of times, when you put yourself in the market’s position, they know that when they get an inferior pump, the assumption is always that even though I got an inferior solution, I will make sure this doesn’t fail. Nobody’s doing the assessment at the beginning, saying, “Oh, I’m getting a lower cost solution that’s going to fail, and I’m going to incur cost in the future.” The assumption is, “I’ll make sure that it doesn’t. I’ll make sure that it operates reliably.” Reality is different. Hindsight’s always 20/20.

Chaitanya Sakhalkar: So up until that, it was the big issue. So what we did was offer a much smaller portfolio of products with many limitations. It wasn’t pre-designed. So we saw a little bit of a ramp and adaptation on that. As a matter of fact, we called it LE—that was the name of that product. So then when we saw success in that in the last few years, we were like, “Okay, we need to go LEX and expand that—instead of having a physical range of pumps that are here, to being pumps that are pretty much as tall as I am when needed.” So the size to cover roughly anything we would otherwise do on an engineer-to-order pump.

Carman Pirie: Now I’m bouncing all over the place. It happens almost every episode, Chatty. I’m just thinking about these use cases. I’m trying to think from a marketing and sales perspective. What’s interesting is that I’m sure there are some of these cases where, as you said, the science or the warnings haven’t caught up yet. These chemicals are more dangerous than they’re letting on, or what have you, and they ought to be handled differently than is the industry standard today. For lack of a better term, I’m going to say that’s an area where you’re selling on fear, uncertainty, and doubt in some way. You’re trying to tell people, “Oh, there’s something you don’t know, and therefore you should buy us.” And on the other hand, you’ll be more on a total cost of ownership: we may be a bit more expensive, but we’re going to be more reliable over the long term. So if I have to force you into those two buckets—a TCO sale versus a fear, uncertainty, and doubt, a FUD sale—which do you find harder, and why?

Chaitanya Sakhalkar: The fear and uncertainty are harder, because what ends up happening is—and this is a human notion, to an extent. I may be a culprit in it; I just haven’t really had to be involved in the decision-making. When you’re talking about using a niche technology in a non-niche application, you’re sticking your neck out, right? You’re saying that I’m going to get a higher premium, one, because there’s going to be XYZ returns, while there are standards and everything that are written up to keep it in the current, what I would consider an inferior technology. The individual who’s making that decision based on fear of uncertainty has only one downside, right?

Again, hindsight’s 20/20. If I change the technology and this fails or works six years instead of seven, meanwhile, the organization was used to replacing the others every six months, and no one was going to bat an eye. But this one: because I said seven years and it failed in six, my neck is still stuck out. Nobody remembers that. And I won’t say that every customer it happens with, but that notion of, “I don’t know if I want to put my neck out for something that is so uncertain.” I’ll put my neck out on something that is clearly an environmental hazard—absolutely—because there’s enough paperwork, there’s enough backing that I have, that ultimately people are saying, “Knowing what we know today, hundreds of people would have made the same decision that I did,” as opposed to, “On what basis did you make that decision? Was it because a manufacturer told you?” That’s definitely a harder one to do.

Carman Pirie: I may be getting confused with that response, so I want to make sure I get it. I initially thought you were saying the total cost of ownership is an easier sell because it offers an economic upside. But then you just got to the end there, you mentioned the environmental piece. I guess my thinking was, if the person buying the pump needs to meet a certain health and environment standard, and they’re not in the business of trying to predict which chemicals may be hazardous 10 years from now—

Chaitanya Sakhalkar: Yeah, it’s—

Jeff White: —That’s still a FUD play?

Carman Pirie: Yeah, that’s what it seems to me it is. You’d have to convince them—give them enough fear that’s going to be a thing, right? So, did I understand you correctly that the TCO is the easier approach and that you would recommend going more down that road?

Chaitanya Sakhalkar: TCO is definitely the easier approach, and largely because there’s tangible evidence that’s tied to it. The fear-based one is the one where I was saying—I see why the confusion came in, because I gave you the six-month and six-year example. The fear-based one is definitely the harder one, largely because it’s walking into the unknown without any third-party evidence that the step you’re taking is based on something more concrete.

Carman Pirie: Yeah. Yeah, it seems to me it’s a little bit like folks who try to sell into unenforced regulations. We’ve encountered this before.

Jeff White: Yeah, compliance and regulatory demands that aren’t—

Carman Pirie: Yeah, sure. If everyone followed the rules, your product would be successful. But the rules have not been enforced since 1962, and therefore, those kinds of situations. This is oddly similar. Interesting. I guess it seems to me that, connected to this, you’ve had to learn to talk about your product and your value prop a little bit differently, and I’m interested in how you’ve enabled that with the sales organization. How have we helped them tell a different story?

Chaitanya Sakhalkar: Yeah, and that was a challenge as we went, right? Because we didn’t have a structure to do this. When you have an organization that’s, to an extent, spoiled because, “Oh, hey, this market segment saw its peak as it was dying down, some other market segment saw its peak,” you’re like, “I don’t need to worry about having a structured value proposition. I need to worry about how am I going to bolster my operation to deliver to the demand,” sort of thing.

And it has been a challenge to create what I would call a flow diagram with multiple decision points specific to marketing. When you make a brochure—which is a tool for sending a message—you try to cover every value proposition. But ultimately, for the sales individuals, we just started making a structure and identifying scenarios that, in our anticipation, would cover that. And the way the scenarios we laid out were tied to the markets and to whether it was an OPEX opportunity—meaning operational expenditure—or a CapEx opportunity. There were different decision trees that went in.

Chaitanya Sakhalkar: Now, ultimately, the value proposition lies in six or eight categories. It’s just a story that you want to deliver, ended up on multiple different decision trees of, “Hey, what scenario are you in? What’s your client persona?” So it was kind of like what you would do with anything else. What’s your input? Okay, the client persona is a buyer responsible for managing maintenance at a chemical plant that doesn’t really have any toxic fluids, as they have defined it. A decision tree leads you to the total cost of ownership, inventory management, fewer components, and related topics.

So we kind of laid out a rough back-of-the-napkin structure with our sales team. And the way we go to market is that we have direct business managers, geographically organized, and local channel partners that go directly to users. Those act in our representative capacity, and, as I like to say, they are at our customers’ places every week. We happen to be there once a quarter, or maybe twice a year, depending on how big the customer is and how easy it is to reach them. So the representative’s goal is to just have that brand presented, because they carry a bunch of different brands. Meanwhile, our regional business managers are the ones honing in on that message based on whatever the opportunity or the decision tree lays out.

Jeff White: Chatty, I’m wondering, as you move into these new categories and new types of chemicals and things like that, how far into the future are you looking? How are you evaluating the categories that you want to explore in the future?

Chaitanya Sakhalkar: Yeah, it’s a great question, and I’ll tell you the sort of fallacy that hit me. Four years ago, I was zoned in, and you could ask me 10 questions out of 20 on net zero opportunities, and I would tell you, “Oh, here’s what they’re doing. They’re actually squeezing corn over here and putting it in… Oh no, they’re actually taking the tallow from the plant that is actually processing beef and converting it—” to renewable diesel, renewable fuel.

And we were pretty much looking into that through the end of the decade and into the next decade to see what would carry us. Two to three years ago, as ChatGPT, Claude, and others took off, it wasn’t any of that. It was more like, “We’re going to have power demand. How are we going to produce power? Don’t care how we get there.” And then it became: okay, now we have the age-old nuclear, the modularized nuclear, and the gas plant powers. So it pivoted us to, okay, is the gas plant the bridge? So it threw us off.

So, to answer the question you asked and do it justice, we looked at 10 years. Real quick, we realized we can’t really execute on anything past three years that we look at, because things change dynamically. So the board wants to see a 10-year attention span. There’s a 10-year attention span that leaders of even the organization in—that’s responsible for North and South America, which includes myself—we look at 10 years, but the execution is purely driven by three-year midterm, three-to-five-year midterm plans.

Jeff White: I think that takes a lot of guts to look at that and say, “We really can’t look that far out. We can, but we’re going to focus on what we can accomplish—”

Chaitanya Sakhalkar: Yeah.

Jeff White: —in the short to medium term.

Carman Pirie: It’s just reality, right?

Jeff White: Yeah.

Carman Pirie: My goodness, you gave a great example of it. It’s just that the pivot was rapid, and not many people were projecting it in advance, to be fair.

Jeff White: Even NVIDIA had no frigging idea.

Carman Pirie: It seemed to be a convergence of both what was going on in the economy and also what was going on politically. So it was a bit of a perfect storm that enabled that to happen, I think, in some ways. Chatty, look, I think we could keep you on the show for another 40 minutes or so. This has been a fascinating conversation, and I thank you for sharing your experience with us.

I wonder—I can’t help but remember the story that you told at the start of this conversation about your discussion with that application engineer. I’m imagining, what if somebody’s listening in and they’re reasonably early on in their marketing career, and they’re saying, “You know what? I listened to this podcast once, and I don’t remember the guys that hosted the podcast, but I remember the producer was about to lose their job, and I remember the guest was—” sorry, Rich—” and I remember the guest inspired me to do this in my career.” What would you inspire them to do? I want to give you the platform to do that.

Chaitanya Sakhalkar: That’s a great question, and I’ll give context as I like to do. I hope I’m not talking too much here. But as I have grown in my career, I have developed the logic that if I take care of the customer, everything will be fine. Today, I’ve gotten to a point where if I take care of my employees, they’ll take care of the customer. Ownership will be fine. It’s just the mode that I’ve gotten to.

And I’ve had a chance to think about this question, and one of the things that resonates with me is the Japanese concept of ikigai. It just so happens that my mom read it. It just so happens that I work for a company that is headquartered in Japan. That concept says the overlap of what you truly enjoy, what you truly are good at, what people will pay you for, and what will be good for the world—those are the four circles and where you overlap.

If somebody were to listen to this, I think, for me, doing good for the world—and offering, through our mission, the why behind it—is the solution that will prevent explosions, protect personnel from harm, and protect the environment. It’s something near and dear. We are all human beings. If I were to get nerdy, it would give me a lot of oxytocin and serotonin from that bit.

To that extent, there were times during my time when I truly enjoyed numbers. Today, what I truly enjoy is talking to people, solving problems through interaction, and understanding the other side. So if I were to inadvertently or in a planned way inspire someone, I would probably use that sort of framework and be like, “What do you really want to do? What are you really good at? Is it helping the world?” And then let’s hope somebody finds a way to pay you for it collectively. I think that would probably be my approach.

Carman Pirie: Chatty, thank you for sharing it with us today. Appreciate having you on the show. 

Jeff White: Thanks very much.