Michael Blake, Director of Marketing for KM International, joins Jeff and Carman to discuss his company’s ecommerce launch, the evolution of their trade show strategy, and how he thinks video will be the differentiator between manufacturers that get ahead and ones that fall behind. In discussing these different marketing and sales tactics, Michael gets at the heart of KM International’s forward-thinking strategy: meeting their customers where they already are.
Meeting Your Customers Where They Are 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, a digital marketing agency made for manufacturers. I’m your cohost, Jeff White. Joining me today is Carman Pirie. Carman, how you doing sir?
Carman Pirie: All is well, good sir. Good to be chatting today.
Jeff White: Indeed, yes.
Carman Pirie: I think we’ve got a great episode lined up today, almost like a, which is the talk show host that says that tonight’s show is the best ever? And he says it every night?
Jeff White: You’re asking the wrong guy.
Carman Pirie: My knowledge of late-night is escaping me right now. But nevertheless, I think we’re just going to be able to look at a digital transformation that’s underway from three or four different angles today, so I’m excited about that.
Jeff White: Me too.
Carman Pirie: Why don’t you introduce today’s guest.
Jeff White: Sure, so joining us today on the Kula Ring is Michael Blake, who is the director of marketing at KM International. Welcome to the show, Michael.
Michael Blake: Thanks for having me, guys.
Carman Pirie: Michael, it’s a pleasure to be chatting. As we talked about the digital transformation that is kind of unfolding at KM International, we talked about it through the lens almost as three pillars, if you will.
There was that notion of how do you market and sell to what you’re seeing as a new type of buyer, a new generation of buyer. There’s the side of it of really getting serious about what you’re doing on content perspective. I think there’s some element around video out of that for you folks, but I’m sure it’s broader than that as well, and just how you go about producing different content for your very different target audiences, and then the eCommerce strategy that’s underway. So I’m really excited to start down through that list, but before we can get fully underway, why don’t you tell us a little bit more about KM International and your work there.
Michael Blake: Yeah, KM International, we’re an asphalt maintenance equipment manufacturer up in North Branch, Michigan. We’ve been in business for going on 35 years now. We’ve always prided ourselves on the quality and more importantly the longevity of our equipment, and like I said, we’ve been in business for 35 years. We’ve gained a lot of experience and knowledge over the 35 years that we’re always happy to share with our customers along with the equipment that we sell.
Carman Pirie: Michael, how long have you been with the firm?
Michael Blake: I’ve been with KM International for going on five years now. I graduated five years ago with a bachelor’s degree in marketing and have been with the company ever since. I’m the Director of Marketing, which obviously includes a quite a bit of different stuff, but mostly I’m part of the content creation, a lot of the advertising as well as the pricing structures and everything that goes along with those responsibilities.
Carman Pirie: Great, very cool. Well look, let’s start into the first layer of this, the notion of having to realign your marketing and sales effort towards a new type of buyer. What are you seeing?
Michael Blake: We’re seeing, I guess, it’s almost an age shift. The asphalt maintenance or pavement maintenance industry as a whole is a relatively niche industry where it’s not huge. There’s not a million different companies out there doing it. I consider myself a second generation, if you will, in the market. A lot of the first-generation-started companies, paving companies, seal coating companies in the late ’70s, early ’80s are coming to their career life cycle where they’re retiring and either selling the business or passing down the business to a younger generation.
With that younger generation, obviously, becomes a lot more digitally native where they’re doing a majority of their research online rather than picking up a physical magazine or a catalog. We’ve started to do a fundamental shift where we’re not heavy into the print advertisements or the physical catalogs anymore, and we’re starting to shift a lot of those brochures and content to digital forms.
Carman Pirie: Has it changed how you’ve had to sell to these folks too? I mean, have you found things like propensity to actually take a face-to-face meeting and things of that nature? Just how has that changed?
Michael Blake: Partially, a lot of … Back before my time in the industry, it was easy to call up a contractor and say, “Hey, I’m going to be in your area. I’d love to stop by and just show you the equipment, show you what it does, what we have to offer.” Whereas now it’s more of a, “Hey, can you send me more information via email or can you send me an online video?” That’s why we’ve put a lot of money and effort into creating educational videos, not just for our specific equipment, but the processes that our equipment support or promote.
Jeff White: I mean, you can just imagine a millennial receiving a call saying, “Hey, I’m in town down the street. Can I come and meet with you?”
Michael Blake: Speaking as a so-called millennial, I can say firsthand that that is just not, in my experience, a great sales tactic anymore. Not to discount anybody that’s still doing that. I enjoy doing my research and looking into a company before I accept a face-to-face meeting or they just show up out of the blue.
Carman Pirie: Yeah, it seems quite out of step with a world where things are coordinated. It seems … You don’t even need to talk about it too much. It just feels weird to think about.
Jeff White: Yeah, and I think one of the things that you had mentioned in one of our pre-conversations as well was that you’re even noticing just a broader shift in the general age range of people, even at trade shows, so you know even if you’re not willing to take a personal meeting, certainly people are going to trade shows to check out the equipment as well.
Michael Blake: Yep, and obviously being a smaller industry, the trade shows do still hold a lot of value just as both networking opportunities, and then like you mentioned to physically see the equipment up close. It does lend itself to some advantages for the manufacturers and the resellers, because a lot of the younger generation, are not as, I guess, restrictive to spend money.
We’ve definitely increased our ROI at a lot of the recent trade shows just because we’ve taken orders off of the floor where seeing the equipment in person is kind of the final step of the buying process. They’ve already done their homework online. They’ve already maybe got a quote or two from a couple of different resellers and now they’re at their final buying decision. Whereas, the older generation that was maybe an initial purchase decision where they’re just being introduced to the equipment at the trade show and then they follow a reverse cycle.
Carman Pirie: I have not heard anybody talk about trade shows in exactly this way.
Jeff White: No, not once.
Carman Pirie: They’re noting a shift in just where people are at when they engage with you at the trade show, in terms of where they’re at in the buying cycle. That’s really interesting to me. Have you had to realign your trade presence to connect with that? Things like, I don’t know, places for salespeople to maybe sit down and have more intimate conversations with folks as part of the trade display? I don’t want to put words in your mouth, but how have you had to change to meet that?
Michael Blake: No, definitely. We’ve actually started bringing inventory to trade shows, because we know from our past experience over the last four or five years people going to take equipment from the trade show. It’s something that we’ve seen. We usually send a full truck load of stuff down there, and even if we don’t necessarily display it all on the trade show floor, we want, if somebody wants to take something off the trade show floor, we want to definitely make sure that we have it there for them.
Like I said, a lot of these younger generations or younger generation people are coming to the trade show with the intent on buying. They’re at the end of the cycle. The last step is, “Hey I’m going to talk to this guy, one of the sales reps. Reconfirm what I already know or what I already feel. I’m going to make the purchase.”
Jeff White: I think that’s really interesting. I don’t want to put you on the spot here, because we haven’t necessarily talked about this particular subject before, but how much visibility do you have into the people who are coming to the shows that may want to make a purchase at the show ahead of time? Do you have any sense of the people who are doing the research perhaps downloading material off your site or is it just a consistent number or not necessarily people who are in your world yet?
Carman Pirie: How much can you call the shot? Do you know that lead’s coming?
Michael Blake: Yeah, and a lot of the time that we will be aware of who’s going to be down there, whether it’s an email just saying, “Hey, saw you guys are going to be at the trade show this year. Love to meet up with you and talk about a hotbox or a different piece of equipment that we might have to offer.” Or even a phone call saying, “Hey, you guys going to be down there this year? What are you bringing? I might be interested in purchasing this if you have one down there,” type thing. They’re not only pre-confirming that we’re going to be down there and have a presence, but they’re confirming that, hey, you guys are going to have equipment down there, right? Because we’re interested to the point where we will take it off the trade show floor if the price is right and everything like that.
Regarding the pricing structure, we used to give a post-show discount just for a couple of weeks or move it out to a month. We’ve even shied away from that, because we feel that we don’t need to at this point. The generated interest pre- and post-show I think is enough where we don’t have to necessarily discount our equipment to sell it that way.
Jeff White: That’s fascinating. Obviously, I mean, you have two different types of buyers. You have these target customers that are paving companies and perhaps second generation moving into those as you were mentioning, but you have other buyers as well, more in municipal and government organizations. My guess is they’re operating a little bit differently, is that correct?
Michael Blake: Oh yes. What we’ve found over our 35 years in business is we segregate our markets into two main markets, as you mentioned. One is the contractors, the commercial workers. Then the second is the municipalities. A lot of the time I always start by, if I’m training a new sales guy or just speaking about the market in general, the commercial contractors, and I think this is the same in any type of construction industry, their main goal is to make money, make a profit, to make revenue, decrease expenses. Whereas, because they don’t have a set budget at the beginning of the year, what they buy is going to be dependent on how much they make that year or how they can decrease their expenses, therefore increasing their profit.
Whereas the municipality, municipal market, they’re more in the lines of how is this type of equipment or this type of process going to save me money. At the beginning of the year, the budgets come out and say, “This is how much you’re going to have to spend this year. Use your money to the best of your ability.” As a marketer and as a sales team member in general, we find ourselves speaking a little bit differently, creating different content to appease and to promote both of these markets rather than just trying to hone in on one while we’re segregating the other.
Carman Pirie: Can you give us a sense of a type of content or a piece of content that works really well and one that doesn’t than the other? Or just a little bit of compare and contrast.
Michael Blake: Yeah, I mean the municipal market, they like to read, and not to say that the contractors don’t, but I have found that maybe an ebook or a published article in a magazine, maybe resonates a little bit better with them.
Where the contractors, they’re more visual as I’ve found. The videos, the pictures, they do still like to see that onsite demo. They’re more, hands on. They want to see it. They want to see how it works, whether it’s in person or through a video. Whereas the municipals, obviously, the municipal buying cycle is a little bit longer, so they have a little bit more time to do their research. They’ll download an ebook. They’ll email us back and forth for a couple months, just asking different questions to get a little bit more information. The buying cycles are definitely a little bit different, which I think allows them to do their research and pre-planning a little bit differently as well.
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Carman Pirie: My guess is that obviously most of the e-commerce is probably targeted on the commercial side and not on the government side of the business, but again, I don’t want to assume. Take me through what you’ve been doing with e-comm to date and what that journey has been so far and how it’s working. Maybe we’ll start to see what’s next here.
Michael Blake: Yeah, so we’ve recently created, it’s a small e-commerce. It’s a plugin to our current site. It’s a small product offering. It’s just to test the markets a little bit. We started with our parts, some of the more common change parts. We’ve seen phenomenal, better than expected results with it so far. So far what we have found is, as you mentioned, it is a little bit more contractor focused than the municipal focus. I’d say right now our customer base for the e-commerce platform is probably about, I don’t know, 60/40 in favor of the contractors. The gap isn’t as big as you would think or even I initially expected.
Carman Pirie: It makes sense to me in some ways as we think about it because of course, the online ordering, particularly of those types of consumables gives you a level of online tracking and things of that nature. You can be able to track your expenditures, lots of things that would be appealing to both sides of that.
Jeff White: Municipalities still need parts, so why not? I mean, it’s a faster, easier way to get it than a phone or an email order.
Carman Pirie: The procurement side of things has already been decided then because the part goes for what you had already … If there is a more extensive RFP type of procurement that’s already happened. I do notice that there’s $10,000 pieces of gear on the site too. It’s not just all consumables.
Michael Blake: Yep, it’s funny you mentioned that because our cut off is about $10,000. From the research that I’ve done and some of the other industry professionals that I’ve talked to, I don’t see, right now, anybody going online and punching in their credit card for anything over $11-$12,000. There’s a certain level of service and commitment that you want with that type of purchase that I don’t necessarily think an e-commerce platform can give a customer yet, not to say that that’s not in the future.
There’s a lot of … Carvana for example, they’re selling cars online. People are literally paying with them, maybe not by credit card but via financing or whatever, you may have it. I think there is a shift coming up where that number is going to start increasing, but for right now I think that’s people’s comfort level for an online purchase.
Carman Pirie: Yeah. I mean not to be too Canadian, but it is interesting to think, get a little Wayne Gretzky on this and try to think about skating to where the puck is going, right? Especially when you think about Carvana and others. We built a similar platform to that actually here in Canada for an auto brand that it was frankly, it was fantastic to see when you go and build this e-comm site to sell cars and you start to see the transactions roll in. That shift is afoot on the consumer side. It’s interesting to consider how it will impact B2B buying in five, 10 years, and of course even three to five years maybe. If we’re talking about three to five years, then how fast do you need to start to act now so that you’re ready for them?
Michael Blake: Oh no. Yeah, definitely. As an internal management team, we’ve already taken the necessary steps to be prepared for it when it does come. We like to think of ourselves as forward thinkers and try to preplan based on the market shifts and where we think our customers are going. We’ve actually, we do have an online partner, if you will, that does sell our full product offering, everything from as small as like the parts and the small consumables all the way up to some of our larger equipment that’s $20, $30, $40,000. We’ve already implemented that. We’re just waiting to see how that plays out. It’s more of a test phase right now more than anything. I think, like you said, within the next three to five years, I think there will definitely be a fundamental shift in the way that people are buying equipment as well as consumables online.
Carman Pirie: I’m curious, is that some sort of a separate online distributor that you’re piloting that with?
Michael Blake: Yep, we were approached by a company, he sells like seal coat tanks and small brooms and a lot of consumable products, but he did have some equipment on there already. He approached us and said “I don’t know how successful I’ll be, but I’d like to get some your equipment listed on our site.” And so, being the thinkers that we were, we said, “You know what? What do we have to lose?” So we have seen some success with that so far.
Carman Pirie: Very cool, very cool. I think that’s an interesting two-pronged approach here. One is obviously getting your feet wet, doing it directly on the KM site and then seeing what kind of volume you can drive from your other online partner as well. I think that’ll give you a really, I guess, interesting foundation from which to grow.
Jeff White: On top of that too, I mean it’d be interesting to see if any of your other distributors want to step up and do a similar platform and what results that begins to do for them. I mean, I have to wonder for equipment manufacturers, how many of the distributors are going to start to develop their own e-comm platforms? You know, it certainly doesn’t seem particularly common yet, but I’m sure it’s coming.
Michael Blake: No, and we have about 15 different physical distributors covering, I think, we’re up to 35 or 34 states. We’ve found it difficult that the e-commerce along with the physical locations have clashed. But as a company and with our distributor network, we’re working through that to see what’s the best, how are we going to compensate a distributor if a piece of equipment is sold in their territory or things along that line where the physical distributor, they’re there. They have a brick and mortar store. They have more overhead expenses that they need to account for. I think right now a lot of people buying our type of equipment they still value that physical relationship. They have a physical presence that they can go to or call.
I think we’re trying to prepare for the future where, and we’re urging our distributors to as well to have, even right now, just a minimum online presence and continue to grow that as the years go by.
Carman Pirie: Yeah, man, I think you’re getting really to the heart of the tension there in this. I spoke at a conference in April to a group of distributors. They were all in on e-comm, at least in some way, shape or form. But you could tell that they really felt like they were behind the eight ball and that they were at threat of their manufacturing partners just going direct if they didn’t up their game. I don’t know that there’s a whole lot to say about that, other than that’s just the state of affairs right now. I think that if you’re a marketer working on the distribution side, I think it’s important to get busy really fast with your digital transformation.
Jeff White: Get busy living.
Carman Pirie: Because the barriers between manufacturers and the end buyer have come down.
Michael Blake: We encourage all of our distributors to do … It’s not so much a clashing point. They understand that there is a transformation coming in and we as the manufacturer, as a national presence, we want to support our distribution network. They’re boots on the ground there. They’re the ones out there selling, making the face-to-face contact representing us and our equipment, so we want to make sure obviously that we keep them happy, keep them educated, keep them motivated to sell, but then they, likewise also have to understand that this new generation coming up, they want to take down any sales barriers that there may be. They, they might be the generation to go online and put it on their credit card and spend $15, $18,000. We need to be, as a manufacturer as well as our distributors, we need to be prepared for that, if and when that day does come.
Carman Pirie: Michael, I think that you said it really concisely there. I wonder, just as we come to the end of today’s show, if you could, if there’s anything that as you’re looking ahead over the next 12 to 24 months has you particularly excited that we haven’t talked about yet.
Michael Blake: Well actually, it’s funny you mentioned that cause I just got back from a conference yesterday. The main topic was actually video, programmatic video and video content. I think again, speaking as part of the younger generation, I really think that that’s where things are going. Although I love the content aspect of marketing, I personally like sitting down and reading an article or something like that. I think a lot of people are unaware of the impacts and the benefits that video marketing has. I’m really excited with some of the things that we’re doing to help cater to our audience with our videos. Like I said before, they’re not just necessarily promotional videos. We want educational videos, informative videos that the customers or potential customers are going to find value in.
Jeff White: Obviously you’re just at the front end of this as well and you mentioned a number of different types of video. Do you have a sense or an inference as to which of those kinds of videos will play best in a programmatic type environment?
Michael Blake: In my personal opinion, I think the educational videos are going to be where the future is going to take us. You hop on YouTube or you click on an ad on Facebook and watch a video, you don’t necessarily want to be bombarded with, “Here’s my product. Here’s what it does. Here’s how much it can save you.” You don’t want all that sales literature. You can get online and find that if you’re interested. You want a manufacturer or a company to offer a solution to a problem that you have. In my personal opinion, I think that the educational aspect of the video marketing moving forward is going to be really relevant. It’s going to separate some of the successful companies from some of the companies that maybe aren’t so successful moving forward.
Jeff White: I think you’re probably right. It makes a lot more sense to always be helping in those cases as opposed to always being, always be selling. Always be helping instead of always be selling, always be closing.
Carman Pirie: I think that’s a fair point. I think it also takes a bit of courage on the part of the brand to say that they’re just going to invest in educational content versus something that maybe seems to be a bit more of a direct path to a sale or something that seems more promotional in nature. I think the ones that choose to do that will see the benefit for sure.
Michael, thanks so much for sharing your insights with us today. It’s been a real pleasure to get to know more about your work with KM.
Michael Blake: No, I appreciate you guys having me on. It was a good time.
Jeff White: Awesome. Thanks very much.
Carman Pirie: All the best now.
Michael Blake: Thank you.
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Michael BlakeDirector of Marketing
Michael Blake is the Director of Sales and Marketing for KM International, a Michigan-based manufacturer and distributor of pavement maintenance equipment. Mr. Blake has held this position for 5 years and has helped in developing and implementing domestic and international growth strategies for KM International during his tenure. Mr. Blake holds a dual Bachelor’s degree in Marketing and Business Management from Saginaw Valley State University.