How to Keep Customers and Distributors Engaged Through Brand LoyaltyHow to Keep Customers and Distributors Engaged Through Brand Loyalty

How to Keep Customers and Distributors Engaged Through Brand Loyalty 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. 

Jeff White: Excellent.

Carman Pirie: Look, and I’m incredibly excited for today’s conversation. 

Jeff White: I am, as well. We’ve been lucky of late to have some of our early guests back on the show, and this guest is another example of that, and one of our favorite shows from the first season. 

Carman Pirie: Yeah. Yeah. Look, almost kind of like spoiler alert, we’ll talk about Klein Tools here, and the reason, I guess a bit of a soft spot for me for Klein Tools, because I actually have always used that brand as a bit of [an example].Since I’ve developed the Niche Navigator model and kind of looked at how manufacturers

Jeff White: Go to market?

Carman Pirie: … go to market within certain niche categories and extent of nicheness, if you will, of their markets, et cetera, the kind of example of a company that serves, yes, a niche, but a very broad one, and in some ways goes to market much more like a brand-first marketer, if you will, the one that I always kind of put in the window is Klein Tools. 

Jeff White: Yeah. No, it’s kind of the success story. Yeah. 

Carman Pirie: Yeah. And you know, it’s probably because I’ve visited there, and met Greg, and got to know the business a little bit, and he so successfully communicated how kind of passionate people are about that brand, and the work they did to kind of ingrain themselves in the trades, so I’m excited to have him back, and I’m even more excited that because of the kind of the tact that they’re taking in their marketing in the last couple of years. So, really cool. 

Jeff White: It’s amazing to see the shift in the three years’ time since we originally spoke.

Carman Pirie: Yeah, so let’s get on with it before we kind of spoil the whole damn show. 

Jeff White: Tell the entire story before Greg even has an opportunity. 

Carman Pirie: Yes. Greg, do you agree with this? And we’re done. 

Jeff White: And we’re done. Thank you. Goodbye. So, joining us today is Greg Palese. Greg is the VP of Marketing at, as we mentioned, Klein Tools. Welcome to the show again, Greg. 

Greg Palese: Hey. Thanks for having me back and thanks for all the kind words there in the setup about Klein Tools. 

Carman Pirie: Well, look, it’s easy to have kind words about Klein Tools. I think you guys do a lot of things right. And Greg, before we kind of dive in, maybe refresh our listeners’, or maybe those that didn’t get a chance to listen to your first episode, tell us a little bit about who you are and maybe tell folks about Klein Tools that don’t know about it. 

Greg Palese: Yeah. For those of you who missed our riveting first episode, yeah, Klein Tools, we are a 165-year-old family run manufacturer of hand tools, hand tools mainly for electricians, HVAC guys. People who make their living in the trades generally are our core customers. And again, we’re sort of the de facto standard for electricians all across the globe, so again, family run, family managed company. We’re on our sixth generation of leadership here at Klein Tools and we still make the majority of our tools here in the U.S. We’ve got a huge manufacturing facility down in Texas and we’ve got other plants in Arkansas, New York, Pennsylvania, and we actually do some forging right here in Elk Grove, Illinois, so still make the majority of our tools here and the family is committed to manufacturing here in the U.S. 

Carman Pirie: Really cool. Really cool. And look, I think one of the things that stood out from I think one of our early conversations, Greg, was we were in your office in Chicago and we were talking about kind of the brands that you look up to, and you kind of looked up the lake, I guess a little bit, and said brands like Harley Davidson, those really kind of brand centric marketers. 

Jeff White: Iconic. 

Carman Pirie: Yeah. That you kind of had in your sights, if you will. 

Greg Palese: Yeah. You know, this is such an amazing brand, and our customers are, as we mentioned last time, our customers are so passionate and so loyal to this brand, and as I look for inspiration across the spectrum, yeah, right up the road, Harley Davidson. You talk about guys who are Harley guys. They’ve only bought Harley their whole lives. They wear the Harley jacket. Maybe they bought the Ford F-150 Harley version. And you know, that is sort of our customer, and they have this deep passion, and I don’t want to say reverence, but certainly a loyalty to this brand, and it’s a very high standard for us. I mean, when we do things right, they jump in and they buy our products, and they give great reviews online, and continued success to the company. 

And every now and then, we make a misstep, and we do something that we shouldn’t have done, and we hear it, so they hold us to a higher standard, and it’s really important for me as the marketing guy and the brand guy here to make sure I’m living up to their expectations day in and day out. So, the fans and the customers keep me on my toes. 

Carman Pirie: I’m kind of setting you up here a little bit because I think-

Jeff White: But in a good way. 

Carman Pirie: Yeah. Well, you know, an awful lot of manufacturers would dearly love to have the level of brand equity that Klein Tools has. 

Jeff White: Very few of them actually have customers who get it tattooed on their bodies. 

Carman Pirie: Yeah. Exactly right. And so, I think that’s what makes what you’ve been up to recently so much more interesting, because it’s not like you’re resting on those laurels at all, or just letting the brand power your growth, you know? And what you’ve chosen to do is I daresay feels to me to be a bit more scrappier than sometimes what I might associate with a very brand-first marketer. So, talk to us. What have you been up to lately? 

Greg Palese: Yeah, so yeah, we definitely have made some changes and some shifts in how we go to market. The pandemic hit everybody very hard. Again, we have very loyal customers, and we also have very loyal distributors, and if you go into a traditional electrical wholesale outlet, you’ll see a wall of Klein Tools. It could be two feet, four feet, six feet, eight feet, ten feet wide of Klein Tools, but the pandemic forced everybody to sort of shut their doors. They were shutting their doors to traffic. Nobody knew what was going on. People were hunkered down in their homes. And sort of all that wall space, and all those displays, and all that work at sort of the front of the electrical wholesaler was going to waste, and we were like, “Hey, what’s going on here?” 

But the secret during the whole thing was their electricians were still working. Our customers were still out there. They were deemed essential workers. And so many places across the country, they were setting up mobile hospitals, and trying to keep the lights on, and trying to help everybody get through the pandemic, and so there was still sort of a lot of business going out the back door of these electrical wholesalers. They still had to do business. They still had to keep the lights on as we say. And we looked at that as an opportunity like, you know, we’ve relied on sort of the front door of the electrical wholesaler for so long. Maybe we should take a look at that back door and see what’s going on there. 

So, we sort of shifted our sales guys to spend a lot of time with end users, and customers, and contractors, so instead of walking into the front door and talking to the guys at the counter, we’re now out talking to the contractors. We’re out talking to the electricians and the end users on job sites and we’re saying, “Hey, we have a lot of solutions we can help you out with. We have a lot of things we can do. We’re not just a company that makes pliers or screwdrivers. We’ve got a lot of solutions for you, Mr. Contractor, and for your team, that we can save you money, we can get you new products, and we have a whole host of solutions that you can use. And hey, you know what? We already partner with the distributor that you buy your stuff from. We can work with them. We can get you pricing.” 

So, we’re doing a lot more. We’re working with the end users and we’re pulling those sales through and we’re getting a lot of that traffic that’s going out the back door, and we’re just gonna keep doing that and not really relying as much as we maybe used to on that front door. 

Jeff White: Have to think, too, I mean sales guys like that consistent… They like it when they walk in with a box of donuts and everybody knows who they are, and they see their display up on the wall, and they feel their brand, and they know that those… the team at the distributor is all in on Klein Tools. Going out to the job site is a bit of a different deal. I mean, they don’t necessarily know who this person is, and they’re probably concerned that someone’s walking on their job site that they haven’t met. So, how have your sales team dealt with that shift, and are you finding they’re embracing it immediately? Or is it taking them some time to warm up? 

Greg Palese: Yeah. You know, I think it definitely took them some time to warm up. Again, we benefit greatly from a really seasoned sales force. We’ve got guys who have been doing this 15, 20 years, and as you mentioned, they own that distributor relationship. They walk in and, “Hey, Joe’s here. How you doing? Oh, you brought donuts. How are the kids? What’s going on? How’s the sports teams?” So, it was a little bit of a different model for them, and it was a shift, but at the same time we recognized that it was a shift, so we started adding some new things. And we started hiring some younger kids, and some younger people, who… Go-getters who were, “Hey, this is great. I get to get my work boots, get my hard hat, get my pickup truck, and I’m out on the job site talking to dudes on job sites.” And so, we’ve added some new staff who are hungry, and they can also learn from some of the seasoned guys, but some of the veterans around here, they really have seen it pay off. 

We’ve had some great testimonials and we’ve seen some things, and you know, they work in conjunction. A lot of these electrical wholesalers already have their sales force or their sales team, so we’ve been able to sort of lean on some of the relationships and say, “Hey, can you get us on this job site over here? These guys are building factories.” Everywhere it seems like you go these days there’s a new datacenter going up, or a new Amazon warehouse, or something along those lines, and these things are huge, and they’re going up everywhere, so lots of work being done, lots of job sites, and it’s a huge potential for us, so our guys are making it work and they see the potential in driving sales and driving dollars, and ultimately if you’re a sales guy that’s what you’re judged on, so they like the benefit of increased sales. 

Carman Pirie: You know, you said something earlier there that got me thinking. I mean, so often when a brand makes a shift to develop relationships with an end user customer in a more direct way, that can sometimes make the distribution  channel a little jittery. But you know, you just said about the sales guys would be out there, if you will, selling along with the distributor sales team. I’m kind of curious about that. Has it actually helped deepen the relationship with the distributor partners in some instances? 

Greg Palese: Yeah. It really has. I mean, again, we’re spending a lot of time. Those guys can’t be everywhere. And we’re out there sort of offering up solutions. Sometimes, the distributor sales guy would go out and they’d talk to customers, and the guy would say, “Yeah, give me five of this, six of that, three of this.” But now we’re there and in addition to the guy saying, “Hey, I want five of this, six of this, three of this,” he’s also saying, “Hey, Klein just showed me a whole new PPE portfolio. Hey, can you also throw on some hard hats, throw on some knee pads, throw on some safety glasses, maybe on some respirators?” Whatever it might be. 

So, you know, we’re helping those guys add on to their sales, so we’re being an extension of that distributor and we’re driving traffic to that distributor and driving sales, and ultimately, again, we’re providing value to the contractor and providing them solutions for their workforce. But you know, we also know from having done this 165 years that a lot of the trade guys and a lot of the guys on the job site, they buy their own tools, right? So, these guys buy their own tools, they have their own stuff, and we’re providing them some opportunities to save. We’ve got  these… We call them our preferred professional discount cards, and what we do is we provide the contractor… We say, “Hey, give one of these cards to every one of your guys on your job site, so when they need their own pair of pliers, or they need their own screwdriver, they can go to Joe’s distributor and Joe knows hey, if the guy comes in and flashes a card, give him this special price.” 

So, we’re driving business back to that guy. We’re making contacts and we’re owning that end user a little bit more, so the distributors like it. Again, we’re driving people there. We’re again, in this day and age, everybody sort of defaults to, “Oh, I’ll just go buy it on eCommerce. I’ll go buy  it on Amazon. Whatever.” And these traditional wholesalers and electrical distributors, we’re driving traffic and driving business to them, so it is deepening the relationship ultimately with some of our most valuable customers. 

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Carman Pirie: Nice. Nice. And you hinted or you mentioned this Klein preferred partner program. The thing I like about something like that is it gives you… If you’re the sales guy, it gives you something to talk about. It’s one thing to say go onto a job site and have a conversation, but it’s like, “Why the hell are you here and what do you want?” 

Jeff White: I’ve got pliers. Yeah. 

Carman Pirie: You know, there’s a little bit more to it, right? I guess what else… Can you give us any more texture as to are there other demos that are happening?

Greg Palese: Yeah, so it’s again, I mentioned the preferred card. A lot of it, these guys, ultimately everybody’s about saving money, right? So, we have ways we could help save these guys money. We have ways that we can help deliver them some savings to their bottom line, to their workers, whatever it is. So, saving money is a big part of this program. Let’s just be honest there. Everyone likes that. 

But at the same time, we go on. We can help them. We can do some demonstrations about PPE. We can do some demonstrations about care and use of hand tools. We can do some demonstrations on how to use some things. Again, there’s always a… You talk to a lot of electricians, and you talk to a lot of folks, you see these fancy multimeters or clamp meters, and most guys use like three settings, right? I use this, I use this, I use this. We can go out and we say, “Hey, did you know that this meter can also do this, this, this and this?” And so, we’re providing their workers some training. We’re providing them how to use some tools, some features and functions, things that can benefit them. Again, if we have some new technology and some new benefits, we just did recently a training for a big contractor. We introduced a new conduit bender last year and conduit benders have been around forever. You’re just bending pipe, but for the young guys that were doing it, they always sort of mess up if they have to do a 45, or a 90, or whatever it might be, so we put some preset angle setters on their technology so a guy can just do repeated bends and he’s not gonna mess up a 45 or a 90 or whatever it might be. 

And people were like, “This is new technology. How do I do it?” So, we did a whole training for these guys on, “Hey, this is how you use the angle setter technology, and this is how it’s gonna save you money in the end because you’re not gonna have a guy screwing up his bends.” So, we’re providing training. We’re providing demos. We’re providing safety things. And then we’re also, again, these guys also like we can go out, we can do… We can give out swag, t-shirts, hats, buttons, pins, whatever those things are. Guys love that stuff, as well. So, providing them access to new tools, providing them demos, providing them training, saving them money, and all these things are really sort of the scope of the program there that we’re able to provide these contractors and end users. 

Jeff White: Have you found… One of the things I really like about what you were just saying is that not only were you able to get in there and train the contractors on the new settings, and let them know about the new offerings, but I’m wondering how much of that deeper connection with the end customer has allowed you to see what some of the things are that those contractors want and then bring that back to your engineers and say, “Hey, guys. They’re asking for a way to make it easier to not screw up a 45 or a 90-degree bend. What can you do?” So, I think it’s interesting that it’s gone both ways and you don’t necessarily hear that often. 

Greg Palese: Yeah. You’re 100% right. I mean, you spend more time on a job site and you see things that are… You see problems that are showing up. Again, and it has definitely influenced our product development organization, so you go on a job site, and you see guys, there’s usually one outlet there. They’re all fighting for power to recharge their batteries, or charge  their phone, so now we’ve got a whole team of guys working on power solutions for job sites. We’ve launched sort of the all-in-one battery solution, so if you need to bring a heavy-duty battery out and run some lights, or a corded power tool if you’re still running corded power tools, maybe it’s a hammer drill or something like that, we’ve got a battery that can run that. 

If you just need something to charge in your impact drill batteries, or your phone, or whatever, we’ve got solutions for, “Hey, put this in the gang box and this will help manage the cords and everybody’s not fighting over one tiny little extension cord there.” So, you see a lot of these things on the job sites. You walk around, you go, “Man, these guys are all fighting over power. Maybe we should look at this power space and figure out an opportunity.” And you know, it’s yielded results for us and yielded a whole new stream of products that are job site solution oriented. 

Carman Pirie: I’m kind of curious. I’m assuming that as you’re encountering these job sites, the average age of the person on those sites is… Well, comparatively maybe to the three of us, a little younger sometimes. Or there’s that kind of generational shift that’s happening and I’m sure it’s happening on the job sites, as well as it is everywhere else, and so I’m kind of curious. Have you noticed any differences in their propensity to kind of embrace the brand? A brand with all the nostalgia, and kind of that’s been established for so long like Klein Tools, are they as I guess keen to jump on the bandwagon, or do you notice any differences there? 

Greg Palese: So, I would say we have the benefit of all the old guys on the job site, the sort of king of the job site or masters of the job site who do our work for us, and those guys, guys show up on the job site and they show up with… They bought an inferior tool, or they bought something that was discounted, guys will be like, “What is that? What are you doing with that thing?” And we hear, again, I don’t want to throw anybody under the bus or whatever, but we hear all kinds of stories about young guys who show up on the job site with not the right tools, and the old guys, whether sometimes they’ll weld them to a beam 40 stories up and say, “You know, you’re not gonna use those tools,” or maybe they find them at the bottom of the porta potty or something like that.  

And then they say, “You know, listen. Go get some Klein Tools and when you’ve got the right tools for the job, then you’re ready to work and you’re ready to go to work today.” So, we’ve got the benefit of some evangelists on the job site helping us out, steering the young guys towards not making bad choices and steering them in the right direction. It is a very crowded market and again, as we all know, brand loyalty over the years, you’ve read all the stats, and articles, and there’s 101 articles on Buzzfeed and everything else. You know, “10 brands that gen Z has destroyed,” or millennials aren’t shopping these brands anymore, so it’s tough, but we’ve got some guys out there who’ve been doing it for a while and they’re helping us set the younger generation straight. 

Jeff White: There’s not many industries where you can actually weld somebody’s tools to a beam in order to influence them to buy the better stuff. 

Carman Pirie: It’s a different way of influencing a buying decision. Yeah. 

Greg Palese: Yeah. When you study the four Ps of marketing, I’m not sure where welding somebody’s tools to a beam falls in that in the traditional marketing model. 

Jeff White: Yeah. Here’s some flux. Go take care of it. 

Greg Palese: Yeah, so it’s like I said, we’ve got great loyal customers and again, the guys who are coming in the trades today, they’re embracing the brand. It’s something guys will just say, “Listen, you only have to buy this, and you’ll use it for the next 20 years of your career, so buy this now and you’ll be set. You’ll thank me later.” So, everybody seems to be jumping on board, and company continues to grow, and expand our brand, and people seem to still like us. 

Carman Pirie: Kind of a weird question maybe, but I’m almost kind of wondering, you get out there, you’re learning more, you’re seeing more, do you find anything new to worry about? Is there any changes afoot that you’re just kind of not sure how to deal with or not sure how it’ll impact the brand over time? 

Greg Palese: Yeah. I mean, there’s always things you see, and you worry about. As I mentioned up front, inherently we are a hand tool company. And power tools and power is a huge thing on the job site, and everything’s sort of going… There’s a lot of things that way, and you look at it, and you say, “You know, where do we play in this big power tool landscape?” And there are some very big power tool companies out there that have done a great job of automating some things, some tasks that used to be sort of manual related, so you look at some of those things, you worry about that. But again, you do as much as you can to prepare for that, and you look at other things. Every now and then, I see an article about prefab this, or robots building houses, or 3D printed that, and is technology gonna upset what we’re doing? You know, you hear about… Again, we’re really based on selling tools to electricians and people like that, and then you see articles online about town in Sweden all has wireless electricity now. Everything, there’s no wires. 

And we’re like, “Oh, geez. Our whole business is based on cutting, splicing, and stripping wire,” so is that gonna be? So, you worry about technology. You worry about is something gonna come in and sort of upset the whole apple cart, but yeah, we just keep doing the best job we can providing solutions for our customers, solving their problems, and we figure we’ll be okay. But again, nobody saw… Did you see the iPod coming and the way that that changed everything? I don’t know whether… did Kodak and Polaroid see digital? Who knows what’s gonna happen down the road, but we figure as long as we’re solving solutions for our customers and providing them benefits on the job site, we figure we’ll be okay for maybe another 100 years or so. 

Jeff White: A bit of the Apple of electrical tools. Yeah. Hand tools. 

Greg Palese: Yeah. And like I said, maybe we’ll stumble upon something in product development and maybe we got something for the other guys, so you know, these guys are working on some great stuff here and providing new solutions, and you see some things in sort of that beginning stage, and some of that skunk work stuff, and you’re like, “Well, that’s pretty interesting.” I think we’ve got a few things in the pipeline that will really get people excited as they evolve, so we’re doing everything we can to stay ahead of the curve. 

Jeff White: I think that’s really cool. And for those that haven’t listened to the first episode that we recorded with you a few years back, what you were speaking about then was this idea of national signing day, of really holding up people going into the trades as important and relevant careers, and something to be celebrated as they move on from high school into their postsecondary training, and I know you’re still doing some of that today. Since that time, you’ve pivoted and changed your sales model, and you continue to kind of lead in that way. I guess what’s next? Where are you taking this from here and what are you excited about?

Greg Palese: Yeah. I mean, we’re still doing national signing day. That’s still a big part of, again, we’re all about the trades. We’re all about the guys working in the trades. So, the skills gap is still a really relevant thing for us. You know, we’re doing everything we can to sort of highlight and address this and see what we can get people to consider the trades, so we will still be doing national signing day and continuing to do that. We’ll still talk to our end users and the customers on the job sites, and that’ll be a big part of what we do. But really, we just keep always coming back to our fanatical loyal customers and figuring out better ways to activate that group. You know, these guys go out and they… Again, they evangelize for us on the job sites. They spread word of mouth about new tools. And so, we always just sort of come back to the customer and look at those guys and say, “How can we do more to keep these guys engaged, keep these guys passionate, keep these guys loyal?”

And it could be something as simple as we’re doing a whole program this year for hardhat stickers and toolbox stickers and things like that. These guys love that stuff on the job site, and we found over the last couple years we got so many requests for this stuff, so now we’ve got a whole program in place to get those guys doing simple things like that. So, it really, besides the strategies of going after the end users and contractors, and talking about sort of thought leadership on skills gap, ultimately a lot of the tactics and strategy are how do we activate this incredible base of customers that we have to stay loyal to us and to help spread the news and spread word of mouth about new products and why we’re the brand of choice. 

Carman Pirie: Greg, I’ve really enjoyed having you on the show again. Thank you so much for coming back on and sharing your expertise with us. I think it’s been fantastic. 

Greg Palese: Yeah. Thanks. It’s been great. Again, I listen to a lot of your stuff. You got a lot of great guests on here and I certainly have taken a lot of notes driving to and from work from people here, so I’m cribbing some of the great ideas from some of your guests and seeing what I can do, how I can implement it into my marketing, so thanks to you guys and thanks to all your guests for helping me out. 

Jeff White: Fantastic. 

Carman Pirie: Awesome. Yeah. 

Jeff White: Thanks for joining us. 

Greg Palese: Thank you, guys. 

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