How Manufacturers Can Benefit From Using E-commerce In Their Marketing StrategyHow Manufacturers Can Benefit From Using E-commerce In Their Marketing Strategy

How Manufacturers Can Benefit From Using E-commerce In Their Marketing Strategy Transcript:

Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White. 

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: I’m doing well, and you? 

Jeff White: I’m doing great. 

Carman Pirie: Nice.

Jeff White: Yeah. Yeah. 

Carman Pirie: Good to be chatting as always and today’s episode is I think… I don’t know. You know, when we think about the 100 and some odd, 70, or 80, or whatever it is episodes that we’ve done now, it’s not always that we get a chance to speak to a marketer kind of at the end of a transformation, or at the end of a major initiative where they can truly look in the rearview mirror and say, “This is how that worked.” 

Jeff White: Yeah. 

Carman Pirie: So, that’s why I’m kind of excited about today because sometimes we’re dealing in more future hypotheticals, which of course is kind of fun, but yeah, so exercising a bit of a different part of our brain today maybe. 

Jeff White: Yeah, absolutely. And also, just really diving into an aspect of manufacturing marketing that we have spoken about before but not in this way, like we’re gonna be diving into E-commerce in a way that I think a lot of manufacturers, not necessarily the marketers, but the manufacturers are a bit scared of. 

Carman Pirie: Yeah. They maybe don’t think about it in this way. Yeah. 

Jeff White: Yeah, so I really like the approach. Looking forward to it. So, joining us today is Adam Krumbein. Adam is the former VP of Marketing at Southwest Antennas. Welcome to The Kula Ring, Adam. 

Adam Krumbein: Hi. Thanks for having me. 

Jeff White: Glad you could join us. 

Carman Pirie: Adam, look, why don’t we kick things off by telling our listeners a little bit about you and Southwest? 

Adam Krumbein: Yeah. I have been in marketing for 15 years now. The whole time has been B2B marketing for manufacturers. And the last seven years I spent at Southwest Antennas, a manufacturer and designer of rugged antenna products for military and defense and federal law enforcement applications. 

Carman Pirie: Really cool. And now just as a bit of a tip of the hat to where you’re going next, I know that we’re speaking to you right at the transition point in your career, so you’re onto a company called Outward, I believe. Is that it? 

Adam Krumbein: Yeah. It’s a company called Outward. They’re owned by Williams-Sonoma. They are also a manufacturing company, but they produce some machine learning software and AI-powered software that controls cameras for capturing visual merchandising information for manufacturers and retailers to more quickly get products from the manufacturing floor up for sale online. 

Carman Pirie: And I think that is going to be a really cool topic of conversation for your second appearance. 

Jeff White: In 12 months. 

Adam Krumbein: Yeah. I’ll come back and talk about it. 

Carman Pirie: Because I have researched that offering a bit over the last while and I could see a lot of applications across many kind of manufacturing verticals. I think it’s an exciting initiative there. But look, let’s not get too ahead of ourselves. Southwest Antennas, so at Southwest you were really the visionary that brought E-commerce to the business, yes? 

Adam Krumbein: Yeah. Yeah. I was lucky enough to work with a great ownership team, so my primary boss and direct report there was the co-owner of the company, and he had a lot of really kind of forward-thinking ideas of how he wanted the company to operate, and so I was lucky to work under a leadership team that let us kind of do whatever we felt like doing, so we… I guess should I just kind of get into it? 

Carman Pirie: Yeah. I’m just kind of curious. I’m assuming E-commerce wasn’t just something you felt like doing, but there must have been at least some strategic imperative there, or some kind of hunch that you had about the role E-commerce could play in the business. 

Adam Krumbein: Yeah. I had done E-commerce at my previous company, another company that you would not think of one as maybe potentially falling under E-commerce because of the cost of the products and the market we were in, so I thought that it would potentially work again in another market where you might not see E-commerce for every company, so we tried it again and it worked fantastic for us. 

Jeff White: So, obviously you’re looking at this from previous experience and seeing that you know there’s an opportunity here. How are you bringing this forward? Because you know, you’re right. When you’re talking about products like this, it’s not necessarily something that everybody would think of just dropping their credit card into a form online to a company they may not have worked with before and ordering a piece of gear. So, it’s expensive enough, and custom enough, and all of that, that maybe that’s not necessarily their first thought. What was your thought process going into that to get people to come around to the idea that this might make sense? 

Adam Krumbein: So, it started because we had essentially no web presence. It was an old website, probably had five or six pages on it, just very typical of a manufacturing company in the mid-2000s, but not appropriate for one in 2015. So, our first task was that we needed to get all our products online. My boss who hired me, he’s like “You know, we have tons of products. No one knows about them. Hundreds and hundreds of products that have never seen the light of day that we’ve engineered, so we need to have them up on our website.” 

So, my thought is an E-commerce website is a great way to structure and organize products, and these would fit… I think fit the bill to sell online, so let’s set it up as an E-commerce website and that will serve as to guide our back-end structure, and then we can kind of design how we want to display the products around that on the website and have the information readily available for customers. So, that’s where the genesis of that was, is we were thinking about how we wanted to get the stuff on the website. Just made sense to use the structure of E-commerce to kind of be our guide when we were setting that up. 

Carman Pirie: I know a good many people have done that without adding the add to cart functionality, like they’ve taken… They’ve had the benefit of E-commerce.

Jeff White: The cataloging structure. 

Carman Pirie: Exactly, exactly. This is where Jeff comes in and saves me because he’s much more well versed. 

Jeff White: Taxonomy. 

Carman Pirie: Indeed, indeed. I was waiting for it. But I guess you made the decision to go obviously a few steps further than that and I’m assuming that was within the context of an existing distributor channel relationship environment, et cetera. Can you kind of tell us a little bit about that? 

Adam Krumbein: Yeah, so what we had existent at that time were just external sales reps who didn’t have any distribution when I first started at Southwest Antennas, so that’s something I helped to bring on board after I started, but we had existing sales reps, and so at first we had to just kind of work around our existing sales rep model, and that worked fine because the way we happened to run it is we would give the credit to the account reps in the area the item sold to no matter what channel it came through. So, if it came through the internet, that was fine. They’re still getting the credit for it and then they’re getting the details of the customer so they could follow up with the customer and make sure products are working well, have additional follow-ons with that person who’s in their territory, so that’s the method we used to get around any sort of conflict with our external sales rep partners. 

Distribution was a little bit more of a difficult thing to work around. Once we started doing distribution, we found that there was a little bit of competition between the distribution sales and people coming directly to us on the website to buy, but we got around that by just having open conversation with the distribution companies that we were selling that way, and that if they wanted to engage with us we were gonna be doing that, that we would try to design the pricing of the products to not put them at a disadvantage. 

Carman Pirie: Well, and I have to think that it’s at least a bit of an easier conversation to be having when the distribution channel is being set up after your eCom is already. 

Adam Krumbein: Exactly. Because they know that’s how we operate because they can see it. 

Carman Pirie: Yeah. They know what they’re getting into at least a little bit then and they just complain afterwards. 

Jeff White: That is something, though, that people who are kind of approaching it the other way, where they already have existing distributor channels, I think they’re more tepid about it, you know? About introducing E-commerce after and bringing that level of channel conflict in. So, you know, the order of operations here probably benefited. 

Adam Krumbein: Yeah. The order of operations definitely paid off. 

Carman Pirie: I don’t want to get too far past the point before bringing it up, because you mentioned in the previous company you had established E-commerce in a category that maybe didn’t have a lot of E-commerce players, and you said you chose to do the same thing at Southwest Antennas, and we will be diving into what that meant from a OEM specification perspective, et cetera, in a moment, but I’m curious. In each of those instances, have you found that the kind of coming to market with a strong E-commerce play, did it have any kind of reputation rub off, if you will? Do you think that Southwest Antennas, they may be perceived as being more technologically with it, et cetera, as a result of the marketing and the web presence, not just the technology that’s baked into the products? 

Adam Krumbein: Yes. Very much so. I mean, that’s part of marketing, too, is your public perception and how people perceive your brand, and I’ve always followed along with the philosophy that your company’s brand is what your customers think of it. It’s not what… You can think up whatever tagline you want. You can try to work in specific markets and make your brand. You can try to guide your brand. But ultimately the customers decide what the brand is and what it isn’t, and by having an E-commerce website and all our products up there, it made us look like… Quite frankly, just like a bigger company than we were, and it helped our brand definitely a lot, because we already had kind of strong affinity from existing customers, and customers really liked us and how we did things and our products, so having a more reputable looking presence on the internet and having all our products up there kind of helped lift our brand just that much more than it would have otherwise if we’d left the website alone and just kind of had a standard, run of the mill, old school manufacturing website. 

Carman Pirie: How much of that do you credit to the eCom versus how much do you credit that to the more progressive content initiatives like in the learning center or what have you? 

Adam Krumbein: I actually give a lot of the credit to the salespeople and the operations people that keep our customers happy, first and foremost, because the one-on-one interactions with customers really kind of help just cement the company in the customer’s mind, because we have customers that operate with pretty complex kind of end-case scenarios, so we’re helping them out a lot. I credit that first and foremost. But I think definitely the E-commerce played a decent role in helping set that, just because people could see what we have available. And of course, we tried to put out a lot of content to help educate customers about things that would be difficult for them or cause them issues. Didn’t necessarily have to do with our products, per se, but just kind of more general learning topics for folks deploying antennas into their particular use case scenarios. 

Jeff White: Another thing too, in addition to having that great kind of information available so that people can actually learn more than about just the specific products themselves, but also more kind of about how they integrate and things like that, you guys went further, as well, because you had 3D models, and other things, and just had all of this information just open. I mean, we talked about the potential for ramifications with channel conflict with distributors, but the other thing that a lot of folks are concerned about is just making all of their information available and their competitors can see it too, and there’s a certain amount of bravery just putting that out there, as well, as part of the overall product information. 

Adam Krumbein: Yeah, for sure, and that’s something that it’s definitely a mindset that you have to get in the zone for because it doesn’t come automatically to everyone, but I thought it had an immense amount of positive impact for us. I think people overestimate the amount of damage competitors can do with knowing about your company. And if they want to know your pricing, your lead times, things like that, they can find it out anyways. A lot of these industries, there’s kind of a small core group of customers and competitors and things that are all kind of interacting at different times, so the world is small. If competitors want to find out information like that about you, they can. I find the benefit of having all that freely available for the customers far outweighs anything damaging that a competitor can do to you with that information. And you have to trust that your marketing strategy and the tactics that are underpinning that can survive the normal kind of onslaught of market competition. 

So, I don’t know. To me, the benefits of helping the customers just far outweighs any detrimental effects from competition. 

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Carman Pirie: We hear this time and again, right? So much so that you can pretty much hold it to be true. People overestimate competitive concerns and underestimate the benefit of being more transparent and open with a lot of this information. So, it’s just interesting to hear it yet again. I hope people kind of take it to heart. It can be just like you say, it doesn’t come naturally. It’s a human decision in some way. 

Jeff White: Yeah. People are innately protective of that information and not even really thinking… You know, it’s possible to get your pricing. We’ll get your pricing. 

Carman Pirie: Especially in this day and age. 

Jeff White: And we may have to tear down one of your units to understand how you built it, but we’ll figure it out, you know? Compared to being a first mover in that in your particular industry and being the one who is transparent, and open, and giving of content, and models, and pricing, and other information, you develop a bit of an unassailable advantage at least for a long time, because other people then have to try and catch up. 

Adam Krumbein: Yeah. And to me it’s you look at if you’re competing on just pricing and product features, you’re already in a kind of a losing scenario there because you don’t want to be… That’s not what you want to be differentiating yourself with your competitor or your customers about. So, competitors can look at information and try to compete with you on those two things, but to me that’s not what separates a good company from its competition. Again, it just goes back to giving all the information possible to your customer so they can make informed decisions at their own speed, and don’t worry about what the competition is gonna do with your pricing, because that… I mean, you’re hopefully not competing on pricing anyways. 

Carman Pirie: Yeah. If competitors are busy copying you or chasing you, then they’re not busy innovating, so-

Adam Krumbein: Yeah. Exactly. 

Carman Pirie: Look, let’s talk about the eCom dynamic at Southwest as you were looking at the strategy as a way of migrating, if you will, from a single SKU sale to an OEM relationship. Talk to me about the role that you saw E-commerce playing in that and how you’ve driven OEM growth as a result. 

Adam Krumbein: Yeah, so we called our company at the time a job shop, so what that meant to us is that customers were coming to us one at a time with specific engineering or product requests and we would fulfill those, and we knew that to get the company to the size we wanted to, that would not sustain us. We could not grow fast enough with that type of business model, so we needed to be more of a commercial off-the-shelf COTS model, where everything is ready to go, ready to be purchased. So, by getting all the products up on E-commerce website, it allowed us to start to transition towards that model where instead of us servicing customers coming to us with a specific need, customers could browse our products and hopefully find one that met their needs that we already had, and independently choose to buy that. They could either buy it online without interacting with anyone or they could… if they had questions, they could drop us an email, or a message, contact us through kind of a more traditional sales process, and get the questions answered before trying out the product. 

And our whole hope with that strategy was that we would wind up seeing more customers coming to us to try the product out for the first time and then continue to buy that product as their end product went into full rate production. Because typically our customers were not going to be the customers using the product in the field. It was going to be one or two customers behind that, because our customers are system integrators, radio manufacturers, companies like that, that are designing technology to then be  deployed by other folks. 

So, we a lot of times weren’t even interacting with the ultimate end user of the product. We were just interacting with the folks designing it. 

Carman Pirie: So, can you give us a sense of the impact of that as you transitioned from simply being reactive to customer requirements to-

Jeff White: More SKU-based? 

Carman Pirie: … to opening up the product catalogue to serve emerging requirements from obviously a broader number of prospects? What kind of transition did we see in the lead flow? Are we talking about transformational, like-

Adam Krumbein: Yeah. Yeah. 

Carman Pirie: What’s the skinny?

Adam Krumbein: It really increased the amount of leads coming to us from new customers pretty rapidly after the first year of website launch. In the data, you could see a nice just upward line of new customers coming to us and our specs or our stats around cost of customer acquisitions and lifetime customer spend increased at the same time. Or the costs did not increase, but the customer spending over their life with the company, account life with the company went up during that time. And it was a nice… We just saw a nice increase in generating demand from new companies and also capturing previously created demand from existing companies who were so large that we weren’t servicing all the departments. That’s another interesting dynamic we saw, is that in the defense industry there’s oftentimes very large companies that are spread out across many offices in different parts of the United States, and they’re pretty stove piped. One group of customers in one office, one engineering office somewhere might be using your product, but another office that could also use your product in another part of the country, since they’re physically separated teams, they don’t talk, they don’t know your product solution exists. So, another kind of nice benefit we had of this is we started to see more sales from companies where multiple departments started buying from us kind of in succession, which was a nice thing to see. 

Jeff White: I think one of the really interesting… It’s a bit of a trailing indicator really, but if you’re initially something like a job shop, where you’re supplying very custom parts that are engineered directly for somebody’s needs and then moving to more of a brand kind of play, and maybe this is a really nerdy question, I don’t know, but did you see an increase in the amount of branded search for your products and your SKUs as time went on that were initially more about people just kind of searching for very engineering-oriented terms? 

Adam Krumbein: Yeah. Yeah. Our brand search has always been pretty strong and that I think goes back to Southwest Antennas having a pretty good brand reputation in the market already amongst the small number of customers we had when I first started, but yeah, our branded search remains incredibly strong to this day. A lot of people search for our name. Instead of… You know, a lot of people do search for specific product requirements, specific antenna requirements, antennas that operate within specific bands, things like that, but our branded search traffic still is incredibly high, and I think just serves to show that making sure you’re taking that into consideration when you’re architecting your overall strategy is very important and making sure you’re tracking that. 

Carman Pirie: Did you see… You mentioned about increases in lifetime value, customer expansion benefits. What about in terms of speed from kind of a first purchase to say a more OEM relationship? Were you getting a bigger PO, basically? Did we see any kind of evolution in that kind of cycle, as well? 

Adam Krumbein: Not as much. So, it didn’t appear to really affect the speed other than the-

Carman Pirie: You’re getting more of them but not necessarily any faster. 

Adam Krumbein: You’re getting more of them. They weren’t moving faster, but you get more of them, but the thing that always was hard to measure is since we didn’t… These were not known accounts to us before they would buy independently online. We didn’t have a good way to measure how long they were already researching us or looking into us, so that’s kind of the unanswered part of it that I would like to continue to work towards in future positions, is measuring that time that they were kind of in the research stage before finally coming to us and purchasing the solution. Because normally if someone engages with you through a standard kind of purchase model, where they get in touch via a form, you have that first touch date there and then you can kind of follow them along through the process as they eventually make a purchase, and you know how long that’s taken. 

But when they come to your website and you’ve never seen them before, you don’t know how long they were researching you, so it’s a little bit of an unanswered question at this point, but something I’m looking forward to digging into in the future. 

Jeff White: Yeah. It’s something Carman has really spent a lot of time over the last while, is figuring out how to shine a light onto those earlier stages of before somebody-

Carman Pirie: Of a buying process. Yeah. It can drive you crazy too. And then I think the more you light up parts of the funnel as people will say, or parts of the buying process that were previously in the dark, it becomes harder to paint everybody with the same brush. Everybody goes through the same checkout online, but that doesn’t mean that they’re going through the same research process in advance, and then… Yeah, and I think your options to impact it also become greater, as well. So, yeah, it becomes murky in a hurry. 

Adam Krumbein: Yeah. You can get into some interesting data trying to fit it into what you’re looking at and it doesn’t always give you the correct results, I don’t think. 

Carman Pirie: I’m kind of curious. When you think about the eCom evolution at Southwest, is there anything that you would either say, “Eh, I would have done that differently,” or, “I would have done X, Y, or Z,” faster or sooner? I’m just curious. 

Adam Krumbein: I would have implemented better search sooner. That was something that was incredibly difficult for us to get our heads wrapped around was good quality parametric search. It really seemed to bedevil us and the web developers, and just trying to get good results that were intuitive for the user who wasn’t necessarily as in tune to the products as we were, because that’s something that always was on my mind is I know the products back to front since I’m working with them all the time. I know how to search for exactly what I want on the website and find it. But I know the customers don’t have that same experience, so getting a really, really good search tool dialed in right away would have been something I would have looked into. 

The amount of foreign transactions was larger than I thought, and I would have spent more time getting DHL and some other international shipping options squared away first, too. Because I thought UPS was gonna just do it all for us and unfortunately we sold more product outside of kind of the typical UPS territory than I would have expected. So, that was something, having to come from behind on that and try to fix it afterwards was tough. 

Carman Pirie: Yeah, it’s like I could just hear the conversations at launch. “Yeah, if we get a few orders, yeah, we can deal with them one off,” and then all of a sudden it’s like, “Oh, no.” 

Jeff White: Like that old IBM ad, do you remember that IBM E-commerce ad from about 20-odd years ago, and they were talking about implementing, and it was like a small… They were launching the website. There was a little party. And then-

Carman Pirie: Yeah, it’s ringing a bell. 

Jeff White: They’re watching the orders kind of tick in, and then really tick in, and then like thousands and thousands, and then they were like, “Oh, no.” 

Carman Pirie: Yeah. 

Jeff White: It was either FedEx or IBM. I can’t remember. But it was like 20-odd years ago before any of this was even a real concern for most people. 

Adam Krumbein: Because we were building this at the same time the company is growing. It’s not like the company was this large behemoth and we were doing E-commerce for the first time. It’s we were doing this as the company was growing, so we never had a lot of international sales, so it’s kind of it was something we had to learn to deal with as the company was growing and the website was growing at the same time with it. 

Jeff White: Wonderful problem to have, though. 

Adam Krumbein: Yeah. Exactly. 

Jeff White: Assuming you can actually have the wherewithal to sort it out, but those are… Man, you’re not the first person to say that on-site search was really hard to crack. 

Adam Krumbein: Yeah. Incredibly hard. And it’s we had all the products, all the parameters were in a database already, so in my non-programmer mind, of course I know it’s gonna be difficult, but how difficult could it be? And it turned out to be one of the more difficult challenges we had on the website was designing good search tools. 

Jeff White: Yeah. 

Carman Pirie: And I think it was really insightful when you mentioned you have a way of thinking about the products, you have a way of searching so that you can get them, makes sense to you internally, but it’s really hard to be able to see it from the outside. 

Adam Krumbein: Yeah. 

Carman Pirie: Yeah. Very cool. 

Jeff White: Well, Adam, really enjoyed this conversation. What would you say is going to be… What are you most looking forward to about starting this journey again? 

Adam Krumbein: I think building. I really like building things. It’s something I was fortunate to be the first marketing hire at Southwest Antennas, so I had the opportunity to kind of build things the way I wanted to build them. Of course, got input from the team, but I was kind of left to my own devices to build things how I wanted to build them and I’m really looking forward to continuing to build things at future companies. It’s something I really enjoy doing. 

Jeff White: That’s fantastic and like we said at the top, we really look forward to chatting with you in a few months and find out what you’ve been up to and how things are going there. 

Adam Krumbein: Yeah. That’d be great. 

Carman Pirie: Well, all the best to you. 

Adam Krumbein: Yep. Thank you both for having me. This has been fun. 

Jeff White: Yeah. Thanks a lot. 

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