Mike Donley of Setco joined us on the show this week. We talked about intensely precise machinery and how He and Setco are developing conversations about keeping them very precise for a very long time. Can education around handling and caring for your parts to get the maximum life out of them create sales opportunities? We conclude, yeah, it can! We also chat about diversifying content through video production. And, Jeff gets to complain about audio quality (his favourite).
Last Longer, Go Farther: Creating Win-Win Scenarios Through Education 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 as always is Carman Pirie. Carman, how you doing, sir?
Carman Pirie: I’m doing well. I’m doing well. And you know, I think the last time we recorded I was highlighting, and this will probably not come out in the proper sequence, of course, because they never do, but we were highlighting your birthday, and then oddly enough, I don’t know why I didn’t realize this before, but then immediately the day after is my mother’s birthday, so-
Jeff White: There you go.
Carman Pirie: … kind of this weird ongoing series of birthday celebrations here at The Kula Ring, you know?
Jeff White: Indeed.
Carman Pirie: But beyond that, I’m excited for today’s show. I think… I like when marketing sometimes takes a bit more of a noble purpose, let’s say, and there’s a quote that stood out when I was first chatting with today’s guest that just kind of resonated with me, where it was just seemed like it’s best to create marketing that helps people use what they have. And you know, that seemed like something really worth unpacking, so let’s get into it today.
Jeff White: Yeah. I’m looking forward to it as well. So, joining us today is Mike Donley. Mike is the VP of Marketing at Setco Corporation. Welcome to The Kula Ring, Mike.
Mike Donley: Hi, Jeff. Carman, thanks for having me on the show today. It’s great to be here.
Jeff White: Yeah. Really glad you’re with us. Why don’t you tell us a bit about yourself and then dive into what Setco does?
Mike Donley: Yeah, so I’m a long time marketer. I’ve been doing this for… Well, close to 30 years now. Maybe even a little longer. Sales and marketing. Been a lifelong passion of mine. I enjoy it very much. Very happy to be at Setco Corporation. We’re based in Cincinnati, Ohio, in the Cincinnati Metro area, and we’re in the machine tool space, so we are an OEM of spindles, and slides, milling heads, and we also have a significant portion of our business devoted to repairing those same products, especially spindles, so that’s where we live these days.
Jeff White: Very cool. And how big is the company?
Mike Donley: So, we’re about a $70 million company. We’re global. We’ve got facilities in China, Taiwan, India, the U.S.A., and a little bit in Mexico.
Jeff White: Very cool. I love the… I was saying to Carman the other day the full name of the company, or the previous name, it was Standard Electric Tool Company, and it feels like it really needs like a modern hipster logo showing the 100-plus year history of everything. I can see it, crossed spindles in a circle.
Mike Donley: We just moved to a new facility and in going through that move found a photo archive with some very cool old machines in there that we’re hanging onto, so yeah. Lot of history with this organization.
Carman Pirie: But you didn’t have a modern hipster logo, I believe the term is?
Mike Donley: I don’t know if we’d call that modern hipster, but we have updated it a few times over the years, so have to look up that definition of modern hipster and make sure I get it right.
Carman Pirie: Right.
Jeff White: I think this was designer speak for me. Yeah. We’re always kind of saying things that other people don’t understand and that doesn’t make sense.
Carman Pirie: Mike, take us into this, into your work at Setco, and this notion of the strategy of helping people use what they have. It seems that the space would obviously be quite technical. But you’d also somewhat assume that the people within it know how to use what they have. Talk to me.
Mike Donley: Yeah, so the idea around that or the concept around that is that in marketing, I think it frustrates our customers, our prospects if we’re constantly selling them something. People don’t like to be sold to nonstop, so in my marketing efforts I try to focus on how to help them use their products more efficiently, more effectively, get longer life out of them, get higher performance, increase their productivity, and we believe that if we focus on that then the sales will happen naturally and organically. As we develop new products, our customers will like us, they’ll trust us, and they’re more likely to take a look at these, at the new offerings, as well. But if the core focus is around, “Hey, thanks for buying this. This is how you can get the most out of it,” I think that’s a solid message that works in our space.
Jeff White: And what kinds of content are you producing to get that message across and to help your customers?
Mike Donley: Yeah, so I’m relatively new at Setco. I’m coming up on a year now. My first year. And with previous companies, I’ve tried basically the same strategy. But we publish blog articles. We’re gonna be getting more and more into video. Just haven’t had the time to get to that with the move to the new building and launching a new website, but more video content around how to optimize the performance of these products. Explain to people why they fail, what they can do to prevent them from failing. Spindles are highly technical products, and they take a lot of care and handling, so we produce content around how to store them properly, how to move them properly from one location to another, how to test them, how to make sure they’re lubricated properly, and right on down the line.
You know, we have products to help prevent contamination, and we explain to people how to best protect their spindles when they’re operating in their machine tools in order to keep them clean, keep those contaminants out of the bearings, which is one of the key spindle killers, is contaminated bearings. And really help people do the right and correct preventative maintenance in order to keep the spindle running. You know, a small machine tool shop, they can’t afford to have their spindle go down for any extended length of time. That means that machine is not producing product, they’re losing money, so anything that we can do to help them keep their shop running more efficiently, longer, I think is a win for both. For both our customers and for us.
Carman Pirie: I kind of think maybe we should rename the marketing department like the replacement reorder prevention department. It seems like you guys have really gotten your head around that. Some people, you hear it in a number of categories. People say, “Oh, you know, our products are almost too well built. It would be nice if they broke a little earlier so that we could sell the replacement.” You know, and I understand where people are coming from with that, and it is a backhanded way of commenting on your own quality, but at the same time it’s kind of another level of this strategy to actively pursue the extending of the use and not just building that you’re great from the start but trying to extend it further. Doesn’t strike me that the business has had any challenge accepting that notion, however.
Mike Donley: No. Everyone seems to be on board with that. We look at it in the long term. There’s a lot of machine tools in the world today and all those are prospects for us, so if we can help people use this equipment longer, their business is gonna grow. They’re gonna need a new machine tool. They’re gonna expand. And spindles don’t last forever no matter how good you take care of them. They don’t last forever. And we want to position ourselves as the company that we’re gonna help you keep it running longer and then we’re also gonna be there when you need us to either repair it or replace it. So, we think there’s enough growth out there that this strategy will definitely pay off for us.
Carman Pirie: And Mike, excuse my ignorance, but to what extent are you helping people better use what they have with the understanding that what they may have isn’t something that they already purchased from you, i.e., are you helping them better use what they have even if it didn’t come from you initially?
Mike Donley: Well, the content is available to anybody, so we help people… We put content out there around how to prevent contamination of your bearings. Bearings is a common theme in a spindle. You gotta keep your bearings clean and running well in order for that spindle to operate properly. So, that content is available to anybody, whether you’re a Setco customer or not. We don’t lock that down behind a firewall or anything, so we make it readily available. We don’t even require a login at this point to get it. It’s just free and open on the website.
So, yeah, we think that if we can keep our name out in front of people and help them maintain this equipment, it’s a win for us, as well as them.
Carman Pirie: Do you find that you’re able to surprise them? That you have some tips that they haven’t thought of? I mean, the people working in this space, like I said, I think they probably know what they’re doing a bit.
Mike Donley: Yeah, so there’s… Especially like if we look around our shop, the guys that have been rebuilding these spindles for 20 years, 30 years, 40 years, they know exactly what they’re doing. They know how this equipment works. And we’re not really going to drop something on them that they say, “Oh, hey, I never really thought about the fact that I have to use clean air.” You know, clean, dry air in order for my tool changes. You know, they know these things. It’s people that are newer to the industry. Maybe it’s a maintenance guy that’s fairly new in machine tools, people that are just up and coming, they’ll get the most out of it, but it’s always a good reminder too.
Another key component of that is around vibration analysis and preventative maintenance. Companies might feel that maybe they can’t afford that type of technology in their system, so they shy away from it, but if we can help them understand that in the long run they’re better off investing in that up front to avoid the downtime, then that’s an opportunity maybe to enlighten somebody that is a little bit more experienced in the field and looking at that tradeoff.
Carman Pirie: I think that’s an interesting kind of hinge here. I’ve found that one of the places… People that employ this very education-first strategy, sometimes they kind of arrive at a bit of a fork in the road, if you will, where they either decide we’re going to educate people on the thing itself, the use of it, or we’re gonna educate them on the business of what they do. You know, getting more into the background processes, or like you say, imagining sensor technology, et cetera. Kind of think about investing in their business in different ways.
Have you kind of thought about that formal distinction about advising people more on the business side versus on the actual usage side? And do you make any conscious decisions one way or the other about how to approach it?
Mike Donley: We don’t get too terribly deep into that. We certainly tout the benefits of preventative maintenance, keep track of the health of their machine tools on the whole, and spindles in particular, so we try to be a little bit more holistic in that area and not… We don’t want to be too hyper focused on the spindle, necessarily. We sell other products, as well, but we recently completed a market research study and we found that particularly for the small and medium size job shops, they don’t really think about spindle repair that often. The spindles just don’t go down all the time. A lot of prospects in that category might only have a spindle failure once a year or once every 18 months, so we’re not top of mind for them.
But we certainly want to be present when something does happen and they do need some help, so the key there is around trying to think of it from their point of view. Get into their head, understand what they’re thinking about, and focusing on what makes the most impact for them. And again, I believe if we do that we’ll be just fine in the end.
Jeff White: I think that’s really interesting because the spindle is a part of a machine, but it’s not kind of the core thing, so yes, a lot of these machine shop operators and the folks who are kind of using those are going to know about the components of the machines that they use just over time as they get more experience, but you know, the first time that that spindle breaks or goes down on them, they’re gonna have to go potentially looking for this. They’re not necessarily thinking about that failure until it happens, right?
Carman Pirie: Or planning for in other words. Yeah.
Jeff White: Yeah. So, kind of having this strategy of creating content about that should give them a way into you even if they haven’t heard of Setco before.
Mike Donley: Yeah. Ideally it would work that way. So, machine tools are very sensitive. They’re often highly precise pieces of equipment depending on what it is that you’re making. Naturally, if you’re turning a lathe on wood and you’re just making a chair rail or something like that, that’s fairly simple. You’re not getting into microns. You don’t have to mill that down to 1 micron tolerances. Whereas, within some of the metal products in automotive and other areas, aerospace, you have to be that precise. So, even when a spindle doesn’t fail completely, it can get out of tolerance. If it gets out of balance, it starts to vibrate a little bit, it can throw your machine out of tolerance by a few microns, which isn’t very much, but then that part is not gonna pass inspection and their customer isn’t going to accept it.
So, there’s catastrophic failure that just blows everything out of the water, and then there’s getting a little bit out of alignment here and there that matters, as well. So, it’s both sides of that, helping our customers understand that a little bit of wobble is a bad thing depending on how precise their requirements are for the parts that they’re making.
Jeff White: I think that can apply to a lot of parts of life, you know? A little bit of wobble is a bad thing.
Mike Donley: Very true. Very true. Well spoken.
Carman Pirie: A lot of wobble, however, depending.
Jeff White: Listen, it was a Friday night.
Carman Pirie: You know, I’m going to really expose my spindle ignorance here, but I have never purported to be a spindle expert, so I don’t know why I’m concerned about being ignorant of them, but I guess when there is a failure there, when there is a requirement for replacement or what have you, one assumes the brand name is resident on said spindle, correct?
Mike Donley: Correct.
Carman Pirie: Appreciating Jeff’s point that it’s kind of part of a bigger system, but I guess how is that as a barrier for displacing competitors? You can educate people all you want. You can have a great brand recognition. A lot of people can know you. But when they go to replace a spindle, if it’s not your brand that they see on the one they’re replacing, well, now what? Because in that moment that’s really what they’re seeking to do is break fix, correct?
Mike Donley: That’s correct. And that is one of our biggest challenges on the repair side of the business, is that the OEM that manufactured that machine, oftentimes they’re the spindle provider, as well. They manufacture the spindles that go into their equipment. And they’ll have requirements around warranty that that spindle has to come back to the OEM. Plus, they have the added advantage because they make a whole bunch of those spindles. They have a repair or replacement on hand, so they don’t have to fix the one that comes back. They just send them out a new spindle and trade them out. That’s expensive to do it that way for the customer, but it does work, and it is fast, and a lot of times it’s their best choice.
You know, in our space on the repair side, we can repair just about any OEM spindle out there. We’ve been doing it for a very long time, so we have access to parts typically. Drawings a lot of times. Not at all times. To be able to build it, rebuild these things back to OEM specifications, or even make alterations in them if the use of that machine has changed over the years. So, they are highly complex. The OEMs are a competitor of ours on the repair side of things. But then there’s OEMs that we provide spindles to on the new side, as well. Because we’re a spindle manufacturer as well as a repairer.
Jeff White: I was gonna lead right into that, actually, because I think it is a different segment of the market for you. You’d obviously be going to market when you’re selling to OEMs and being an OEM supplier of spindles differently than you are for the machine shop owners and operators. So, how do you think about that in terms of kind of a split of marketing effort?
Mike Donley: Yeah, so the OEMs that we work with are typically… They do highly specialized work. They don’t necessarily need hundreds or thousands of spindles. We have a niche of really strong engineering capabilities, so when we can design a spindle to really meet the needs of a very specific application, whether it’s… Well, really for anything, whether it’s aerospace, or defense, or anything. It really doesn’t make much difference. We can design a spindle for just about anything. And typically, if they’re not gonna be building a ton of these, it makes more sense to outsource that to a company like us rather than try to develop that technology and build that from scratch yourself. It’s just easier. They can focus on the marketing and the sales of that and the other components of the machine.
Jeff White: I think that’s really interesting. And I mean, it must… It probably presents different challenges to your sales team, as well, I would think. Kind of working more directly with OEM manufacturers than the folks who are sending things in for repair or sending… looking to buy a new spindle from you.
Mike Donley: Yeah, it does. On the marketing side, when we’re prospecting, it is a different approach to reach out to on the repair side of things, because essentially that’s the entire machine tool universe. Anyone that has a machine tool, we could potentially repair that. For the OEMs, we target more specific niche type operations that need something that’s very highly specialized. So, our guys on the sales side, and we do most of that through in-person sales calls. So, those guys, they know the market. They’ve been in it for a long time. Lot of tribal knowledge there. Lot of sharing of information around these different companies that need these types of services to build these highly specialized spindles. And the targeting of that is a little bit different than what we do on the repair and rebuild side.
Jeff White: You’ve talked a bit about how since you’ve arrived at Setco you’ve been investing in digital, and new website, and content strategy, and all of that. Is that extending to the sales team, as well? Are you standing up CRMs? Is that new for your team? Or are you still kind of working more directly with the sales team?
Mike Donley: I work very closely with the sales team, so being with the company for a relatively short period of time, the first few months I was here we were tied up with our big trade show, the IMTS show in Chicago, so that took up the bulk of my time. Learning a little bit about the business, for one thing, because I’m not a spindle expert coming in, so that I had to learn all the spindle stuff that Carman just picked up today, so that’s part of it. And then through that, getting through budget, developing the new website, and then the move to a new building, that’s kept me from gaining as much product knowledge as I typically would coming into something new.
So, as I ramp up and I learn more and more about our products and services, I’m a long-time marketer, so my core competency is writing good, strong email campaigns, but I really lean into the sales team to wordsmith those for me, to make sure that I’m using language that makes sense to OEMs, or to the average guy in the job shop, because I don’t speak their language yet. So, I understand the marketing side of things, but I really depend on my sales team, my engineering team, to help me with fine tuning these so that I don’t write something in there that just doesn’t make sense.
And it’s the same thing with the blog articles, so even if I write a blog article for the website, it always gets reviewed by the sales team or our VP of sales. Somebody takes a look at it to make sure that the content is gonna make sense to the audience, so it’s very collaborative on that side, because I just really believe strongly that content is king, that we really have to push good content out of the marketplace to position ourselves as the industry leader, where we want to be. And without that and without the support of the sales team and people that have been doing this for a very long time, yeah, it would fall very flat. I’d be writing all kinds of things that just don’t really land well with our audience.
Carman Pirie: I want to extend on this point a little bit and kind of explore your drive that you mentioned earlier, or at least interest, in heading down the video road a bit more strongly. How much thought have you given to that strategy? And what’s the driver of it, I guess? Are we starting from a point of view of we think video is a good thing we ought to be doing? Or do we have some level of customer demand leading us to think that it’s a direction we ought to head in?
Mike Donley: Yeah. Some of it is anecdotal, but when we all think about our own experiences, I know I do a lot of work around the house, a lot of house maintenance, and anytime I need help with something I’m gonna hop onto YouTube if I haven’t done it before and try and find a video that shows me how to do that. So, that’s primarily anecdotal, but when I think about how people typically are consuming content, and I look at the numbers around the growth of YouTube and views in the marketplace, it’s a valuable tool for someone to actually be able to see what it is that we’re talking about. So, you can talk all day long about bearing contamination, and the different things that can go wrong with a spindle, but if you can show them that in a video, or an animation, or something that makes that concept more clear, I think that it helps the end user understand better and it positions us at one notch up from just writing content.
So, our effort going forward, we hope to be producing at least one or two videos every month once we hit our stride, and we’re a ways from that right now, but that’s the intent.
Carman Pirie: I’ll be interested to see how that plays out over time and the infrastructure that you put in place to make it happen. It’s one of the interesting… If I had to draw some patterns that I’ve seen in manufacturing marketing departments over the years, there’s almost… There’s a bit of a divide. There’s some that really build out their video capability in house and really lean into it and have lots of good reasons for that, of course. And then others where that’s just not a strong thing, but it seems like there is a… It’s hard to be half pregnant on it, you know? People are either all in or not. I don’t know if the editor of the podcast is now gonna have to edit that out or not, but we’ll see.
Mike Donley: So, when you talk about video and how it’s done, I think one thing that YouTube and the ability for anybody to upload a video on their phone has created, it’s for lack of a better term it’s lowered the standard for video quality that’s acceptable in the marketplace. So, a video doesn’t necessarily have to be highly produced in order to be effective. You know, a guy in his garage showing you how to replace the carburetor on your lawn mower is okay in a lot of situations. So, what we try to focus on or what I really look at is making sure that the audio is clear, that people don’t have to struggle to understand what it is that we’re saying. And the video generally comes out clear enough with just a little bit of editing to get the proper closeups when you’re really trying to communicate a concept. I think that’s important, as well.
So, little, tiny bit of editing, and make sure your audio is good, and I think you’re okay. I think that works in today’s environment.
Carman Pirie: I think Jeff will certainly be shaking his head at the notion of having good audio being easy, because we all know that that’s not the case. My goodness.
Mike Donley: That’s not easy. It’s not.
Jeff White: It really is kind of incredible. We all have these video production studios in our pants pocket right now, and yet it’s still very hard to get good quality audio.
Mike Donley: It is. It’s a challenge.
Jeff White: Video, you can go 4K for a joke these days. But yeah, no, and the audio’s really where you notice it, too.
Mike Donley: Yeah. And I think that’s what makes a difference. We want our videos to be clear so that when people are… A lot of times, they’ve got it on their phone, and they’re not necessarily… They’re more listening to it, I think sometimes, if they’re trying to walk through something while the video is playing. I know I do that. So, the audio is what we really try to make sure that we get right. Take the time. It doesn’t have to be perfect. It’s certainly not studio quality. But we don’t want people to struggle to hear what we’re saying. And you can’t have machines banging in the background and a lot of distractions. You have to find ways either to shoot the video and then drop your audio in after, or just have a little bit more quiet environment and use maybe audio from the surrounding shoot sporadically throughout just to add a little realism.
Jeff White: Yeah. That’s always really difficult when you’re talking about environments your shop is probably in. I remember doing some video shoots in a… One of our former clients was a manufacturer of RF transmitters, radio transmitters, so there’s so many radio waves in the air out there you couldn’t use any kind of wireless things for triggering lights, or audio, or anything like that, because there were too many radio waves. It just didn’t work. And there was also a lot of noise.
Mike Donley: I would say too to people that are… You know, any new marketers that are just starting to do more video, is when you’re investing in equipment, invest in a decent microphone. Invest in the right type of equipment that’s gonna deaden that wind noise if you’re shooting outside. It’s worth that investment to get decent quality equipment that’s gonna keep your audio clear. Your audience will greatly appreciate that when they don’t hear all that hissing and static going on in the background. Makes a big difference.
Carman Pirie: I wonder, Mike, just zooming a bit back out here as we close the show out. You know, you mentioned earlier at the lead off of the show that you’ve been in the marketing game for quite a while, but you’re reasonably new with Setco. I’m kind of curious. What’s been your biggest surprise in year one?
Mike Donley: Biggest surprise at Setco in year one really is how complicated and diverse a spindle really is. These are really highly, super complicated pieces of equipment that are just ridiculously precise in some cases. And when you’re talking about tolerances that get down into the microns, and how fast these things have to go, spindles, 120,000 RPMs, and the way they can cut metal, and all these crazy different angles, and five and seven axis machines, just the complicated nature of the industry and the amount of effort, time and effort that the OEMs make to create machines that can do all these just unbelievably amazing tasks faster and faster, and do it in a way that really makes sense. You can turn the parts out as quickly as you need them and still get that precision. Super complicated process that these OEMs are working at to make more simple so that with relatively simple programming you can produce parts that are amazingly complex and precise. That has impressed me from the beginning.
Carman Pirie: It’s always kind of a delight about working in the manufacturing space, is that you get to uncover the complexity that exists in some ways in areas that most people don’t get to see.
Mike Donley: It is.
Jeff White: In this case, you’re making the making machine.
Mike Donley: Exactly.
Jeff White: It’s very meta. But I love that where you went with that question, Mike, was to suggest that the number one thing that surprised you was just how cool, and interesting, and how little, or how much you still need to learn about the product itself. It speaks to the strategy that we’ve been talking about throughout this episode. I’ve really enjoyed it. Thanks very much for the conversation today.
Mike Donley: Oh, thank you for having me, and I really appreciate the time to be on the show. Thanks, guys.
Carman Pirie: Take care. Announcer: Thanks for listening to The Kula Ring, with Carman Pirie and Jeff White. Don’t miss a single manufacturing marketing insight. Subscribe now at kulapartners.com/thekularing. That’s K-U-L-Apartners.com/thekularing.
Mike DonleyVP of Marketing at Setco
Mike Donley is a long-time sales and marketing professional with over 30 years of experience in sales, public relations, and industrial marketing. He holds a Bachelor of Science in Business and an MBA in Marketing. Mike is the Vice President of Marketing for Setco Sales Company based in Cincinnati, Ohio.