IndustrialSage

Well hello and welcome to today’s Executive Series. Today I have Mr. Mike Futch, who is the president of Tompkins Robotics. Mike, thank you so much for joining me today on IndustrialSage Executive Series.

Thank you so much for having me, I’m glad to be here.

I’m excited to hear your story. We were having some great chatter before we were recording here, so I’m excited to kind of jump into all of that good stuff. But before we dive into the story a little bit, just for those who are not familiar with Tompkins Robotics, just give me a quick little high-level: what you guys do.

So we’re a company that makes AMRs that do sortation and so we use these small robotic vehicles, and we sort items, such as a calculator here or a pair of reading glasses, a pair of shoes, and we sort the items for an order to replenish store shelves, fill your ecommerce order coming to your home, the grocery items at the grocery store that you would pick up on your way home from the office. We use them to sort all these different types of items to include outbound shipping, returns, and other channels as well. And so we’ve come up with a way to use these small autonomous robots, and use a fleet of them to do what big, heavy, long lead time, more expensive, less flexible types of sortation systems of the past did. And it is a very unique take. As a matter of fact, we have some really interesting ways that we can use our system. Everything in our system is on wheels, including the surfaces the robots run on, the charge stations, everything is portable and modular and configurable. And it’s an entirely different take on how to do those processes that are required to be done up and down the supply chain, in every tier of the supply chain.

Awesome, well, I’m excited to kind of get into that a little bit more. I’m sure there’s going to be some great topics that we’re going to uncover as we have a conversation around that but before we jump on I want to get to know Mike. I want to get to know you a little bit more. So tell me, how did you get into… Well take me before Tompkins, take me before… how did you get into this crazy business?

For a poor kid that grew up in North Carolina out in the country and worked on farms from the time that he was 11 years old, this is a far cry from what I was doing when I was growing up. I went to college, I was in the Air Force, I got out. A guy by the name of Jim Tompkins, same guy whose name is Tompkins in Tompkins Robotics, gave me a shot and I was a consultant for decades. I worked at Tompkins, I worked at Guard Consulting back in the day, Deloitte Consulting, I came back to Tompkins eventually. And then in 2017, I was sitting around and I was looking at these whole AMRs, autonomous mobile robots doing things like moving a trade across the floor of a warehouse. And it dawned on I and the two guys I was talking with that wow, if we could make that robot run a little faster, and we could put a little tilt tray on top of it, we could put individual items on it, go to a destination and tilt it into a container or receptacle. And as soon as we thought about sorting items for an Amazon order, and then we’ve realized we could use it for returns, and we could use it for store replenishment, we could use it for outbound shipping of small packages, that type of stuff is sent to your mailbox every day. It was almost like our heads exploded like a jet.com commercial and I was hooked. And so we went immediately and started working on this as hard as we could. And we’ve had some success. We’ve got over 10,000 robots in operation today.

That’s awesome. That is awesome. So alright, when your consulting days before coming back as Tompkins but under Tompkins Robotics, were you in material handling space or the same space or something completely different?

It was mostly supply chain consulting. So back in the 90s, it was a lot about how many warehouses you had and what inventory you put in them and how you process the goods, the orders through the distribution center. Later, when you got to the .com period and into the 2000s, it became more about ecommerce fulfillment. And then for a few years prior to getting into Tompkins Robotics, and the AMR, it was about the entire supply chain reimagining the whole thing and how you blend the customer experience. The different tiers of the supply chain, and how you blend the different channels, retail ecommerce, returns, all of that together to try to make it into the best network that you can from a physical perspective, but also the best information and material flows.

Yeah, no, that’s very cool. So one of the other things that I want to ask throughout your journey, in your career and in your life, is there something that stands out that really helped you? I don’t know, maybe it’s a good piece of advice or a mentor, somebody that really sticks out from your career standpoint?

It’s hard to put a finger on a single individual or event but if I had to summarize at a high level, I would say my parents because my first summer job I was 11 years old, they taught me how to work hard, how to go after whatever I wanted. They taught me to never give up. And I still look to them for inspiration. And dad’s gone now, but I’ll call mom up and just talk to her sometimes. And so, if I had to pinpoint a single individual group of people would be my parents.

That’s awesome, that’s awesome. So in your downtime, when we’re not solving the world’s challenges or the world’s supply chain challenges, what are your go to hobbies?

Well, to tell you right now, I live in Cocoa, Florida. And with all the social distancing, I was a big fisherman and all that stuff before, but now that you can’t go to bars and restaurants and other places like that ’cause we’re doing social distancing. My wife and I have spent a lot more time pulling out of the boat, Indian River, Banana river et cetera, around Cocoa Beach, Florida and it’s really been fun and that’s been our social outlet. I literally went this weekend and I bought five new fishing rods and reels so yeah, fishing and those things are big for me. I also like college athletics and anytime I can get together with friends around the pool or on the boat or on the water or whatever, it’s a good time and with the kids as well.

Oh, that’s awesome. Alright, so the two follow up questions with that, number one, what’s your favorite fish that you like to fish? What do you like to go after?

Tuna, dolphin, wahoo. And when I say dolphin I mean dolphin the fish. It’s mahi-mahi, a lot of people call it, but yeah: mahi, wahoo and tuna.

So, the tasty fish.

Love to eat all three of them and love to catch them as well.

That’s awesome, alright. And then college sports who your team’s?

Well, my team is my Alma Mater, NC State. I was an engineer from NC State and I still have lifetime football tickets. I don’t make it but to a couple of games a year because I live in Florida now, but I follow every game I can and I’m hopeful that there’ll be sports this fall but I’m starting to have my doubts that they’re going to actually have a game.

I think we all are. But we’ll see. But okay, well… so you said you were doing consulting work, so then you said, “Hey, I want to… “Let’s go start a Robotics company”?

Well, yes, so we, I worked with some colleagues and we figured out a business plan, and we started putting things together. We found an AMR manufacturer that was actually Using an AMR to sort packages, and we started doing modifications of that to be able to sort with cross belts, tilt trays, different types of devices to sort anything from the size of a penny. And now we can do things up to as large as 66 pounds and a meter long. So we now have grown from an idea to three different models doing different sizes and shapes of items, and a wide variety of applications for those different models, and it’s been a rollercoaster of a ride. And in that short amount of time that we’re talking about here, from 17 until today, over 10,000 of our robots have been deployed. So we’ve had a lot of success, and we’re really excited about where our future’s going. We’ve had a little bit of a setback in 2020 as a lot of people have, people postponed some projects, a little apprehension about what Covid-19 is going to do to their business, but it’s already turned a corner and the last half of 2020 and 21 and beyond, it’s just going to be phenomenal.

So when you say that you think it’s turned the corner, what do you mean by that?

Well, so there was a lot of apprehension of firms. And we weren’t getting the same quantity from each. We had a couple of projects. I’ll give you an example. We have an ongoing project right now in New Zealand. I think everyone that heard New Zealand shut the country down, so no one who’s not from New Zealand can even come in unless you’re part of the America’s Cup because they gave them a waiver, right? So we’re not the America’s Cup, so we can’t go over there. All the equipment has been delivered, but we can’t go to New Zealand to install it right now because they won’t let us in the country. And so we have some setbacks like that. But now the phone is ringing off the hook. RFPs are coming in. It’s all we could do to keep up with the tide of people asking for concepts, pricing, contract negotiation… And when I say turned the corner, the last half of 2020 and 21 and beyond, we’re bigger than we probably ever would have been, if it weren’t for COVID-19 . COVID-19 is having a bigger positive impact in our business long-term than anything we could have imagined. It did have a temporary setback, there was a three month period there where everybody was like, “What does this mean? What am I going to do? Where do I go next? Am I going to open my stores back up? What’s happening?” But that is over and now it’s pretty much wider.

Yeah, I would agree with you. There was this ominous period, starting in mid-March. I think really, at that point, it was just like, “What is going on?” But it’s good, and it’s a very similar story, what I hear from a lot of other companies as well, specifically in any type of technology-based company for manufacturers, certainly if you’re in AGVs or AMRs, it’s huge yes. And I agree 100% that the COVID situation from a long-term standpoint has really created a big opportunity because of I think there was… Now we’ve been shown so many different vulnerabilities in the supply chain that there were already issues to begin with that were… We were going down this road anyways, but this just literally threw gasoline on. So right place, right time.

And especially when you think about the micro fulfillment arena, because during COVID-19 that just leapfrogged and I read someplace where the amount of increase in ecommerce in a 12 week period of March, April and May, was equal to the previous eight or 10 years as far as percentage of growth. And so I don’t recall where I read that, so I don’t want to plagiarize anybody, but I did read that somewhere. And it rings true to me. It’s really taking things off, and it’s the new reality as well. When you think about micro fulfillment, specifically, not everyone’s going to go back to this in-store experience for groceries and other things like they were before back in January and February. There’s a new reality as far as people and their acceptance of microfulfilment, at home deliveries and buy online and pick up in store, that’s never going to go back. There may be a slight reversal on a small percentage of the ecommerce and the buy online, pickup in store, and home delivery once there’s a vaccine and we’re completely out of the woods on this thing. But I don’t think it’s going to be more than just a small tick, it won’t be anywhere near where it was before. And more than likely, as younger people and older people become more accustomed to using the type of technology to buy online, pick up in store and have it home delivered, it may be that growth even goes faster. So I think where we projected online sales and home delivery and buy online and pickup in store to be in say, 2022, 2023 we’re going to see that a couple of years earlier because of COVID-19.

Yeah, and that was definitely a huge trend that was being pushed forward before. I mean, I remember hearing stories not that long ago, and I can’t remember which company was piloting it but in Walmart, for example, in the stores where they’ve deployed AMRs or AGVs to go and actually pick product for consumers to better do that. And so from your crystal ball, what does the future of retail look like from a fulfillment standpoint?

Well, I think you’re going to have more and more situations where you’re trying to do a store- I mean, an order fulfillment at the store level, or at a micro fulfillment site that’s a dark store or nearby. And we’re already seeing a lot of that. There have been quite a few ASRS-type vendors, automated storage and retrieval types of systems that have been built or made for micro fulfillment either in a dark store or in the back of the store. I think you’re going to see more of that. I also think it’s going to change, though. I think it’s an unsustainable model to put $5 million on the back of every store. For example, Walmart has 4,800 stores. That’s not going to work. So I think there’s going to be some new creative ways of doing something that gives you a large percentage of the benefit that you would get from one of those: I call them ASRS systems for micro fulfillment, without having to spend that money and delete time it takes to do that. And we’ve actually come up with a design ourselves, that’s getting a lot of traction. We’re in a contract negotiation with several firms. We just rolled this out in April. It’s our micro fulfillment system. And what we like to tell people, it’s a 10th of the cost a 10th of the lead time, and a 10th of the space versus the ASRS-type systems. And I’d welcome anyone who wants to go to our website and look at it, it’s all over our website. We’re really excited about it. And we’ll have our first customers under contract here before the summer’s over.

That’s awesome. Congratulations on that.

We’re excited, I think we’ll sell more robots and micro fulfillment two years from now than we will to distribution center operators.

I could see that because I thought this was a big shift that was- again, I thought it was happening anyways, and so it is the whole last mile piece: look, how can we get products from a consumer standpoint getting them down to consumers and really rethinking the way on how distribution happens at that point, and it was all good. Do you think that it’s going to be more of a flex model where you might have up front, you’ve got customer-facing stuff. And in the back, you’ve got actual fulfillment happening and it’s completely separated. Do you think that it’s going to be mixed? What do you think that’s going to look like?

I think it’s going to have to be mixed. Because even when you put one of the ASR systems on the back of a store, you don’t put all the SKUs or all the items in that system. So I think it’s going to be a mixture of certain stores that have micro fulfillment at the store level, pulling from shelves and in the house on the selling floor with some reserved stock in the back of the store, The other options would be a dark store that maybe services three or four stores in a small radius for buy online, pickup in store and home delivery. And then you’re going to have more regionalized distribution centers. We have one customer that has what they call a local omni channel hub in Southern California, it’s actually in the LA area, and so it’s handling a couple hundred miles’ radius. And so I think it’s going to be different levels of different automations, I don’t think it’s going to be a one size fits all for every single customer.

And I think being able to do something with various types of technology such as ours and others, and ones that are complementary that can be joined together to create or craft a great solution in each one of those tiers of the supply chain. That’s where people are going to find value. That’s what’s going to allow people to work on razor-thin margins for ecommerce when they’re going out of the store. I think all that’s going to evolve, and not everyone’s going to survive. There’ll be some consolidation in the industry, there’ll be some firms that maybe don’t make it. But in the end, the consumer and successful retailers will find a way to make it work. The consumers will get what they want because they’re not going to buy if they don’t get what they want. And the successful retailers are going to come up with things like we’re talking about right now at every tier of the supply chain to be able to satisfy that convenience factor, that speed to market, that satisfaction level for the customer.

Yeah, certainly I think it’s a fascinating challenge, because you really do have a nexus of technology. Obviously, these market demands you mentioned here, speed to market, the convenience piece. I mean, Amazon obviously has flipped everything on everyone’s heads because the consumer’s expectation is that “I need to have something in two days minimum, or an hour,” right? And so in certain cases, so what fascinates me is that you’ve got a really interesting challenge to be able to meet all those, but also it’s very multifaceted in the sense of, if you’re talking about expanding a retail location, you’re talking about a very expensive cost per foot expansion, whereas traditionally a distribution facility would be rolled miles away where the cost per square foot is going to be significantly cheaper. So there’s a premium cost that’s going to come to that, so finding that balance from a supply and demand standpoint I think is fascinating.

It is interesting and I don’t think there’s a one size fits all model and I think different people will be successful doing different things because it’s going to work for them and with the demographics or where they’re located and the way their cost structure is. But we are seeing, for example, there’s an RFP that we are working on right now for a company that’s a large grocery chain. And they’re actually looking to convert a portion of the selling space at the store into reserve and order fulfillment- so not just what is called the traditional back room, but a portion of the selling floor. And their objective is to replace that site daily as necessary, have less stock on the shelves, still have the same number of SKUs and a smaller footprint, but have a warehouse so to speak as part of the location.

There’s another company that we’re looking at or working with and the design that we’ve come up with them. It’s a little bit unique. Every town you drive through, there are vacant grocery stores or retail spaces just sitting there. The landlord would love to get someone in there. Even if he’s only getting 50 cents of the dollar of what he was drawing two years ago. You could take a space like that, you can put a system like ours, which is a bunch of autonomous, small robotic elements. You can combine it with a storage system, like a good two person AMR type system. And there’s several of those on the marketplace- I’m sure you’ve talked to some of those guys in the past- and now you can rapidly deploy an AMR, just a person type robot, a la Kiva from back in the day, to deliver to a T-sort system to sort things out to an individual order and convert our vacant grocery space into a warehouse in two months. And so the rapid deployment and combining complementary technologies, taking advantage of open vacant space where there’s a need or a void, there’s a lot of ways you can skin this thing and create unique solutions for customers. And the customers in this case would be the retailers, whether that be for grocery or for general merchandise.

Yeah, well, there’s certainly a lot of exciting things on the horizon, that’s for sure. That sounds like you guys are kind of on the leading edge of helping to provide those solutions and answering those challenges of the industry. So Mike, in kind of wrapping here, for any of those who’d like to learn more about you guys what you’re doing, what’s the best way to contact you or reach out to you guys?

Well, barring me giving everyone my cell phone number here–

I was hoping for in a credit card, but anyways…

Just please go to tompkinsrobotics.com, it’s all one word: tompkinsrobotics.com, and there’s no h in Tompkins, it’s T-O-M-P-K-I-N-Srobotics.com. There’s video on our website, there’s information about our different applications, there’s information about our micro fulfillment solutions, there’s a lot of stuff there about the different models and the things that we’re doing. And we would welcome the opportunity to speak to anyone who’s interested.

Awesome. Well, Mike, thank you so much for the time today. I really enjoyed our conversation. And yeah, for those who want to check out more and learn more about Tompkins, go to tompkinsrobotics.com

Thank you very much. I enjoyed our time today on the phone, and I hope you have a good rest of the week.

Thank you, this is awesome. Hey guys, so thank you so much for watching. This wraps up our episode today with Tompkins Robotics on the IndustrialSage Executive Series. Listen, if you are not subscribed to us on industrialsage.com, go ahead and go there right now. If you’re not there already and go ahead and subscribe. You want to get on the emails. This also goes out in podcast formats, sometimes people don’t know that: so you can go to your favorite podcast station, we are there- whether it’s Spotify or Stitcher or iTunes or there’s like a half dozen others that we’re on. So thanks for listening or watching, and I’ll be back next week with another episode of IndustrialSage. Thanks.

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All right, so let’s go ahead and jump into today’s episode. I have a familiar face, Daniel Loeschen from MXD Process. Daniel, thanks so much again for coming on. This is take two, so I think you were here last October, November, and we talked about social media, so if you haven’t seen that episode, you might want to check it out. We talk about the importance of social media and whether it’s viable for manufacturers, it was a really great episode. But one of the other things that we wanted to kind of pick up on the conversation is that you guys are rolling out with E-Comm. And we’re seeing that a lot, and I just think it’s really valuable for everybody. So just talk about how you guys started doing that, why you started going into E-Comm and all that good stuff. But before we really get it started, for those who haven’t met you or heard you, haven’t watched the episode, tell me a little bit about yourself and MXD.

Yeah, so I’m the marketing director at MXD. The company’s been around since 2010 I think, so going on nine years. And really just wanted to be a disruptor in the space that we’re in. You know, it’s old school industrial manufacturing and there’s not a lot of new developments in that industry in terms of how to sell and how to process things and market, and it’s just been the same stuff for so long and so we really wanted to kick it off from the beginning with trying to do something different and just see what happens. And it’s been a great almost nine years. I’ve been there for the last six, so almost since the beginning.

So what does MXD manufacture?

Yeah, so we started off making just agitation equipment, like big mixers, things like that. And then after a couple years, we started making our own vessels for them, which we found, there was a large need in the market for that because there’s not a lot of companies, very few companies that do both and have the engineering in house. And so if you’re needing to mix something, you need a mixer and you need a tank, and so you’re buying them from different people, and then sometimes neither one of them have engineering, and you have to find engineering for them to design, and it can get really costly and really convoluted, and so we wanted to be a company that did all of that, and people really love that. So we added on stainless steel tanks and then a few years after that, we added on automation and batch control systems and stuff like that. So that’s why we kind of changed our name to MXD Process because we’re more of a process company now. So any piece of equipment that has to do with processing a liquid, that’s what we provide.

All right, so food service or chemical–

Yep, pharmaceutical, food and beverage, brewing and distilling, chemicals, oil and gas, there’s a lot of different verticals for it.

Awesome. All right, so that makes a lot of sense. So let’s talk about this E-comm thing. When did you guys start going into E-comm and why?

Yeah, so we started from day one. We built a store on Magento. I don’t know if you’re familiar with Magento.

Yep, it’s a E-comm website.

Yeah, it’s a platform, and it’s a good platform. It was a little too much in terms of everything that it could do for what we needed. But it was something that was recommended, and we kicked off our website with that, and it did well. I mean, that’s really what grew our company up until this past year, we switched to Shopify. But going back to the beginning, the thought with launching with ecommerce was, no one else was doing it in our industry, and we did believe that people would buy expensive items without dealing with a salesperson. We didn’t really know how they would do it, or what that process would look like, but we believed that they could, and that it would be a better experience for them. So granted, kicking it off, especially in 2010 it was slow going, but it really started off with the propellers, like $60 propellers that you can’t really mess up. You know, that kind of stuff. And then after a few years, we redesigned the site, still on Magento, to kind of make it a little more user friendly and we were heavily investing in SEO to try to do better in rankings, get more traffic, all that stuff. But year over year, there was some small growth in ecommerce sales. And we always had the idea that eventually this could be a salesperson replacement; it could sell as much as a salesperson. We really believe that. We just wanted to figure out how to do it, and really that happened within the last year.

Really, okay, wow, so 10 years–

Yeah, but the market’s there now, so I mean, I don’t think it would take–

2010, that was a little difficult for sure.

Yeah, I mean some of our competitors didn’t even have websites in 2010.

Some of them probably still don’t.

It’s a slow-moving industry. So we did a ton of research, we were willing to spend the money, talked to a lot of our customers to figure out what they were doing on the website, what they liked, what they didn’t like, what it would take to get them to be able to spend 10 grand online, you know, that kind of thing. And so we switched platforms, we moved to Shopify which is just full ecommerce. It doesn’t have a lot of the other bells and whistles. I don’t know if I even want to call them bells and whistles because Magento is a pretty dated software itself. And Shopify’s just been great; it’s super easy to use. We signed up for Shopify Plus. It has a lot of the B2B stuff, software and advantages that their normal platform doesn’t. And so we did a redesign, and the redesign was based off a lot of the customer feedback that we had and the analytics that we were looking at. One of the big things we found looking at the analytics was that, on average, the average time on site for a visitor on a website was over 20 minutes. Which is crazy. That’s an insane amount of time for someone to spend on a website. Like you and me wouldn’t do that.

And why is that, why do you think?

We started reaching out to people, like asking them, and the main reason was how critical the purchase was. Because they are a business that is buying this equipment to produce a product. And so if they don’t get what they need, then they’re not making product, they’re losing money, and it’s our fault. And so they were spending tons of time trying to get as much information, trying to make sure that what they’re buying is what they need, yeah. And they were trying to do it without talking to a salesperson. And so after talking with them, we were like okay, well clearly what we need to do is get information on the website, educate, get resources on there so that they can speed up that process, and get enough information so that they’re confident and that they can trust us that they’re going to get what they need. So we spent a lot of time developing that kind of content, from better images of the products to customer testimonial videos, and so people can search for products based on the industry that they’re in.

Yeah, that totally makes sense.

Yeah, and each industry page has customer testimonials. We traveled, visited, made videos of different companies that we’ve worked with, and so it’s to really build that trust through every step of the process, and it’s gone very well. Our website’s much easier to use, we have a visual navigation so people aren’t having to read as much, and that time on site has gone down by about 10 minutes since we launched, and it’s been a huge success so far. So I mean, we’re close to that goal of being able to replace a- not like fire someone and replace them, but not having to add the dollars without the cost, and that’s the goal. So we’re projecting next year, we’ll hit it probably halfway through the year if the growth continues.

That’s awesome.

Yeah, so it’s been a huge win for us for sure.

So I’m curious, so you started with a $60 part on there, what’s the most expensive product? Let me ask this: what’s your most expensive product that somebody has purchased?

Sure, I think the most expensive, it happened this year. Someone spent about 18 grand just straight through the ecommerce cart, which was unheard for us before. I mean, I think before we launched the site, it was maybe like three or four thousand. But I mean, we’re getting the $10,000 plus sales straight through the website every month now. And it’s amazing, you know, I mean, where we would get 10, 11 orders in a week, now we’re getting 30 or 40 in a week. The proof is in the pudding that if you do the research and you talk to your customers, you could be successful. That people are really willing to spend that much online when they’re confident. If they’re not confident, they’re not going to. Like for sure.

Absolutely, so a couple questions: how are your customers primarily finding you guys?

Primarily through Google.

So a lot of SEO.

A lot of SEO, yep. We put a lot of resources into that, and we have people that monthly, excuse me, monthly working on the website, and whether it’s on page data or the meta stuff in the background, the backend stuff, but we have people working on it all the time to try and increase those rankings month by month. And that’s the main way people are finding us, but then social media, and we do a lot of trade shows, and as we bring in more sales people, they bring in contacts too, and email marketing, I mean really the whole gamut of digital marketing. But the main sources is through Google search.

I notice you’ve got your inbound shirt on, so for those that aren’t familiar with the inbound, it’s Hubspot. Hubspot obviously is a big proponent of blogs and content marketing and that stuff, I’m just curious, is that part, from a content marketing strategy standpoint, is that part of what you guys are doing as well?

Absolutely, yeah, that’s the main building block of our online marketing strategy; making content that then drives traffic. Excuse me. That drives traffic to bring people to you, but that also has to be followed up with a good sales strategy.

Absolutely.

Yeah, and so you can bring as many people to your website as want, but if you’re not taking care of them on the other end, then it can be useless.

Are you having customers that come to your website, maybe start going through Shopify, or they start looking at things, and then they’re like, I really want to talk to somebody about this, is there like a percentage where you may say-

Percentage-wise? I don’t know the exact, percentage-wise…

Even anecdotally.

Yeah, yeah, yeah, I mean, it’s probably somewhere around half I would say. And we have a really great online chat, and we have that chat personalized to every page of the website so if someone’s looking at, for example, we sell mixers called top entry mixers, if someone’s looking at it and they spend a certain amount of time on that page, the chat box will pop up and say like, something personal message about what they’re looking at, asking them if they need help about it. And so that prompts a ton of leads because–

It starts engaging them.

And it’s a picture of one of our actual sales people and so if they do start talking with them, they’re talking to that person that they’re seeing. So it’s just kind of like tearing down those walls and letting them know that they’re talking to a real person. Even though that sales person isn’t the one that popped that up or whatever, but if they respond to it, they will be talking to that person, helping them along the way, every step of the way. Making checkout easier, that was one of the big pieces of feedback we got, was that our checkout was “laborious.”

Make it more fun.

Yeah, or shorter at least. We had to make the switch to https site. A lot of websites are just getting removed from search because they’re not, and so we wanted to get ahead of that. Well one positive of Shopify Plus is you get, I can’t remember the name of it off the top of my head, but there’s like a couple different tiers of security, and Shopify Plus automatically you get the highest level of security, so you get that green badge with the check. And so we have that now, so people know that it’s secure when they’re shopping. But it’s just a one-step checkout. There’s a picture over here, and you fill your stuff in over here, and then you checkout, you’re done.

That’s awesome. Okay, so a couple other questions then on that. And you may or may not know the answer to this, but when you’re looking at customer feedback, I’m curious, do you have any demographic information just in terms of who is actually buying, not in terms of name the companies, but just in terms of, are you seeing it boomers, gen X, millennials, is there a mix, any idea?

Yeah, not so much millennials. And the main reason for that is because our industry is older, it’s just older. It’s not so much, a lot of the older people that are retiring aren’t buying. It’s really that middle, like between 30 to 50, which I guess the early 30’s is still considered millennial, but that’s the main demographic right now because the CEOs are always the older guys, but the head of engineering or the project management’s the one that’s doing the purchasing, or looking for what they need to purchase. And that person is usually in the somewhat of a tenured employee, but not at retirement age. So it’s that middle, it’s getting younger. It’s definitely getting younger, but the millennial age group hasn’t quite aged up into the decision making role, yeah.

That’s interesting. All right, so another question I’ve got for you. As far as getting organizational buy-in, so in terms of your leadership, and saying yes, we want to do this. How did that happen? Was there a lot of selling in? Obviously it’s a very innovative approach, especially to do that in 2010, let alone doing it today. I mean, still very innovative, very risky, very different. Is that a cultural thing inside the organization?

For us, it is definitely more of a cultural thing. Our CEO has always been on board with wanting to push the envelope in the industry, and so there’s not, for us, there wasn’t a whole lot of buy-in that needed to happen. Him and I worked very closely together on these things, and when we first started talking about making the switch to a better platform and really investing in it, it really started from realizing that we have to make a change because of the security of our site. That was a big issue because we needed to upgrade how our site currently was, or we were going to lose a ton of ground in our rankings.

Just out of security from, really?

Yeah, yeah.

Interesting, okay.

Because you know how if you go to a site that isn’t secured, you get that blank page on Google, and that’s just happening more and more and more, and so that was the pathway we’re on. Like that was going to happen, and so we’re like, okay, what do we need to do for this? And then once we kind of pulled that out, then we realized that we really need to update our theme which was currently on Magento, and then Magento had just upgraded their platform so that even if we updated this theme and it wasn’t going to work on the new ones, so I mean we ended up going to a conference to try and find people and talk to people, and started this year-long search to figure out what we actually wanted to do. And through that, it was just like, uncovering one thing after another of what we could do. Because that stuff’s not cheap, even from the beginning, we knew we would have to spend a good amount of money on it, but if we were going to spend the money, what else could we do? Like what could we do? And that’s when we started looking at the numbers of our ecommerce and not just going to get a better design, but a more functional design; one that, when people see, that it makes them feel good. I know that sounds really vague, but it’s a big part of it because when you’re shopping online, especially if you’re going to spend some money.

$18,000.

Yeah, right. I don’t know how often you do that. But when you buy anything online, within seconds, when a website loads, you get a feeling about it. You just know this is going to be hard, I don’t know if I really want to deal with these people, you might not even be able to put it into words, but you know. And so we wanted to have a website that didn’t give people that feeling. That instantly made people feel like it was a company that was well reputable, they could trust, all that kind of stuff.

That’s such an important thing because we’re so conditioned to making snap judgments, I mean just immediately.

Even if it’s not founded. This is what we do.

Exactly. Instinct, we are totally, really we’re taught now to just totally judge a book by its cover. And it happens. So if you’re totally starting off on the wrong foot and the websites like eh.

Yeah, it can’t look like a directory, which I mean, you’ve seen so many of these, especially the industrial manufacturing, their websites just look like a directory. It’s just a terrible version of Amazon. And it loads slowly, it’s hard to figure out what you’re doing. That’s why we wanted to go with a visual navigation so that people don’t even have to read as much. So whenever they go to the menu and it drops down, there’s all the categories, but next to the categories is a picture so they can just see. because a lot of times, especially with our products, people know I need a mixer that’s going to fit this, but they don’t know what it’s called. And so they’ll come to the website looking around like, do I need a Drum mixer, do I need a tote mixer? Like I don’t know what it is, I know I need it to fit in this thing, and they know what it looks like. And so they can see it and immediately by like, that’s it, that’s what I need, and go on down. So it’s really improved everything, but it started with a design, and then getting into the numbers of like, what do we need to do with the design to improve these numbers? How can we get people to spend less time on our site, but make it a more productive lesser time? because the last thing we want is someone spending 25 minutes on our website and then just bouncing. I mean, what a waste of time. And they’re going to feel like they wasted a ton of time. So we really wanted to lower that and give people just a better experience overall.

That’s awesome, that’s really intriguing to me. One part in particular, and I know a lot of people struggle with this is, what did getting that feedback look like? Did you just email a bunch of people? What did that look like?

Sure, so we got a list together of a spreadsheet, and we filtered that list by the people that have spent the most online. And then started just calling them or emailing them, however we could get in contact with them, just asking questions of, what do they like about the store? What do they not like? What is their process through when they’re trying to find something? “Tell me how you’re doing this.” So we got a lot of that feedback. And we went all the way down the line to people that had purchased but they never purchased again, asking them why, and things like that. And then we also got a heat mapping software for our website so we can see how people were navigating, which that’s crazy.

It’s creepy, but it’s cool.

It’s creepy and it can be, you have to take your emotions out of it because you can see people–

What are you doing? Go this way!

Yeah, well, and you can watch someone’s session and you just know they hate this website and they’re having a horrible time.

And it tears you up inside.

Yeah, you just feel terrible. But that was super helpful because we could see where people are naturally gazing and all that stuff. And whether it was where we wanted them to or not, and be able to adjust, and so that was really helpful. So those were the two main ones is like, actually contacting the people that were purchasing, and then the heat mapping and the website sessions.

So using like Crazy Egg or Lucky Orange or something like that?

Yeah, it was… HotJar is what it was.

Yeah so anyways, anyone who’s interviewers who are listening or watching, if you’re not familiar with that, there’s some creepy technologies that basically do that. It literally records website data and activity. You can see where the hotspot areas that people are looking, I mean some of them will actually record the actual user session so you can see the mouse.

See the mouse all over.

Creepy, but it does really help from user experience.

And you’re not getting any personal data from them, so it’s not anything, yeah. But those were the two big data points that we looked at.

That’s awesome. So what’s next? I don’t want you to give away the secret sauce here.

We do have a big project we’re working on, and I can’t go into full detail about it right now because we’re kind of in the middle of it, but it’s a big step and they’re trying to make that process even easier. We recently re-evaluated our kind of core purposes and culture as a company, and so we kind of landed on a new core purpose that we want to use and really implement in everything, and that’s that we really believe that every process we touch, we improve. That’s our core purpose statement as a company, and so we want that to kind of filter down internally and externally. And so how are we actually manufacturing stuff? How can we improve that? How can we improve marketing? How can we improve communication internally? And then on the customer side, how can we improve their experience? How can we let them know along the way when their stuff is getting built? How can we evaluate their process that they’re actually buying this equipment for, and maybe recommend something better, even if that means it’s cheaper. You know, like, really improve the process for the better, not just for our own gain. You know, that kind of thing. because I mean, we really believe that as a company, the more that you give, the more you’re going to get. If we sell someone something that’s less expensive than what they originally wanted because it’s what they really need.

Then you pick up a customer for life.

For life, yeah. And you don’t feel like you cheated someone out of something, you know? And so we really want to just apply that to everything, and that’s why this next project is going to be so important because we do believe that people are smart enough to make their own decisions, and they need to be able to not just find what they want, make their own decisions, but to be able to customize stuff, too. And that currently there’s nothing like that in the industry. And so that’s really what we’re working toward so that people can be their own salesmen through the entire process. And so that’s what we’ve got coming up hopefully sometime next year.

That’s awesome.

We’re working on that hard right now.

Very cool. All right, so one of my last questions, you know, for those companies that are interested in taking a little step in that direction. Obviously we know, and this isn’t necessarily going to work for everybody, totally depends on what you’re manufacturing and your product and all that stuff. But what tips would you give for somebody who’s thinking about it, or like hey, we kind of want to get into this. What would you say?

Well, I would assume that they have websites now, even if it’s not ecommerce. And so I would start with that data. Start looking at that data. Install a heat map so they can see what people are doing. You’ll find out very quick whether or not they’re finding the answers to their questions. And once you know that data, start answering those questions. That’s really where you kind of learn if, like, well maybe ecommerce isn’t what we need to be doing, or maybe it is. You can have this product with all the information that they could ever want, and really clean it up and make it easy to use. So unlike last time when we talked about social media and you asked about the time investment, I don’t think that this requires to start a huge full-time salary time investment. Gosh, websites can be so easy nowadays. And especially if you’re using Shopify. You know, there’s plenty of great agencies out there that can do pretty cheap, good templates that are built off of best practices so they might not be customized to the extent that ours is, but they’re customized to best practices. So you’re starting on a good foot.

And so you can start there, implement this ecommerce website, and then you don’t have to lose what you’re already doing because you’ll have a good website, it can be a legion, you’re not firing salespeople, you’re not really changing anything, and just pick a few products that you think that people are buying. Maybe a middle of the road price range that’s somewhat of a popular product that you sell that’s not complicated. And start with that and really put some ad spend into it, and try to really see what you can do in terms of converting your visitors to those things, and see if it’s something that’s viable. And then if it is, then you can start adding more and more products and building more and more content. You don’t have to just put all 2000 products you have from day one, because you’ll spend a million dollars in content and images. You just don’t have to do that, but I think people feel like they have to do that. But you can start smaller and kind of test the waters of it, and then collect that data. And if you’re in a place where your competitors aren’t doing it, I mean, gosh, you’ve got nothing to lose, everything to gain.

Absolutely. Well Daniel, again, I really appreciate the time, the answers just unloaded a ton of value and just a lot of great insights. Thank you so much for coming back on IndustrialSage, swinging by in the Atlanta area. So if anybody wanted to come check you guys out, you’re at mdxprocess.com?

The website that we’ve been talking about is mixerdirect.com. Yeah, it’s our brand of agitation equipment.

So mixerdirect.com, check that out and take a look at all the great things. I love the visualization you were talking about through the navigation and all that stuff.

Yep, definitely.

Thank you, thank you.

Yeah, absolutely, my pleasure.

Well, this was really, I love this episode. I’m just a big huge fan of ecommerce, and I know we talk about it a lot on here. There’s so many key takeaways that I definitely took. Think about, if you think this might be a really good fit for you, you might want to try it, dip your toe in the water, just try it. You don’t have to do everything like Daniel said. Maybe just try a couple little things, and I’m going to steal a line that Malika, if you watched a couple episodes ago from Landis+Gyr talked about nail it and scale it. All right so just like get it, test it out, and if it works, then scale it, and go from there. Don’t be afraid to continue to really just try. You have to be innovative, and that’s what it’s really going to take right now.

I think one of the other great awesome takeaways is, and we talked about this a lot, is looking at your website and that experience. Like people make a snap judgment on you and with your product and your company. And if you go to your website, we talked about this on a previous episode we just recorded, that when people come look at your website, what’s the experience? This all plays into it. So anyways, take a look at MXDprocess.com– I’m sorry, mxddirect.com, I got that wrong– and take a look at what they’re doing, see how you guys might be able to use that in your own organization and go from there. So if you have any future questions that you love for us to answer on IndustrialSage, we love to do that, you can reach out to us at IndustrialSage.com/questions. If you’ll see it on iTunes, we love a review on social media. Hey, share the love. And as always, thanks for watching. I’m Danny Gonzales and this is IndustrialSage.

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Alright, so let’s jump into today’s Executive Series interview. I have Mr. Tom Galluzzo, who is the founder and CEO of IAM Robotics. Tom, thank you so much for joining me today.

Thanks Danny really appreciate it.

So I’m excited to jump in and into this episode and learn more about you and about IAM Robotics. So for those who aren’t familiar with IAM Robotics. What do you guys do? I have a venture I have a guess but–

Yeah, so we do autonomous robots for warehousing. And our robots are designed. We have the only robots that are what we call autonomous mobile manipulation robots. The robots are able to drive around the warehouse, and they can actually find and grasp things. So they travel around the warehouse just like a person would when you’re walking around trying to find items to pick when people order things for ecommerce and so forth. The robot actually goes to the individual location, grabs an item, picks it off the shelf. And that’s amazing basically IAM Robotics and that’s so.

Awesome. So we’re going to jump into all the… there’s a huge growth obviously right now, huge talk about automation, digital transformation, all that good stuff. And we’ll get into that here a little bit but before we jump into that I want to learn a little bit more about Tom. I want to learn more about you and your backgrounds. How you got in this industry. Take me back take me take me way back.

Way back.

How did you–

Way back.

How did you get into this?

So I started out my career as an aerospace engineer. I went to school at Embry-Riddle Aeronautical University.

Oh, nice.

I thought I wanted to go planes and rockets and stuff like that. I did my first internship at Boeing. And that was a great experience, but I got to realize that these aerospace projects are really huge. And when I was at school I got a chance to work on some club robotic stuff and we thought we were going to do this drones. We called them UAB back in the day. But we were too afraid of flying and crashing a drone. So we got into these robots that would actually just drive around the ground, basically like miniature, driverless cars. And I just fell in love with the challenge and difficulty of the problem and how much you had to use robotics, AI, computer vision, all that stuff.

So that set my career on a course for robotics. And I went to Grad School in robotics where I got to really work on some amazing, really amazing stuff. Back in 2004 and 2005 there was this really huge competition in robotics called the DARPA Grand Challenge. I don’t know if you’ve ever heard of it but it’s basically it was the first big step into driverless cars. And so my school was one of the schools participating. I was at University of Florida at the time and we actually decided to enter the DARPA Grand Challenge. So it was a really big milestone event in robotics in general. And that was very exciting. And then I ultimately went to Carnegie Mellon University after school to work on more projects for DARPA and then just fell in love with really hard challenging product problems in robotics.

That’s awesome. So you are from- good story, but what I heard is that you basically you’re a rocket scientist. Is that is that what I heard?

I really wanted to do rocket science. Yes it was everyone when we were graduating at the time everyone bought these t-shirts that said, “Well yes, actually I am a rocket scientist,” so–

That’s awesome. See, that, I would almost want to… I don’t have the brain for that at all. I would fail- but just for that, that’s just a great story, a great thing that you could totally use, so… But all jokes, all kidding aside. Tell me, walk me through a little bit of the… you founding IAM Robotics. What was sort of the impetus for that?

Yeah it’s a good question. So at the time this is going back around 2010 I was on a project at Carnegie Mellon working on a project for DARPA as I mentioned. This project was another kind of competition but it was called ARMS. And it stood for autonomous robotic manipulation software. So what we were doing at the time was DARPA. I’m not sure if you’re familiar but is kind of like the R&D group of the Department of Defense.

Yeah.

And they built five identical humanoid robots and they gave them to various teams across the country. And they said here’s the hardware. We want you guys to build the software that basically brings these robots to life. So they took arms and hands and they bolted them all together. But the robots didn’t do anything without the software.

Right.

So our job at Carnegie Mellon was how do you build a robot software that enables a robot to look around on a table, find items, pick them up, move them around completely by itself. And we got pretty good at that. We found that we could actually get robots to see things, grab things, plan how to move them around, pick them up and place them. And so I’m just naturally entrepreneurial. And I started thinking about where in industry are people just effectively being used as just object movers go to a spot, I find an object, I pick it up and I move it. And that led us really quickly to ecommerce and piece picking. And so we started talking with some business owners and they love the idea of robots driving around their warehouses, finding items on shelves, kind of been an industry dream for the past four years, to take AGV robots and put an arm on top and have the robot actually do the picking. So that’s the challenge that we went after. And it’s been incredibly fun and difficult and exciting. And we’ve become now the first company in history to actually deploy mobile manipulation robots that can drive around and find things and grasp them by themselves.

That’s awesome. So alright, obviously an entrepreneurial spirit is there in order to do this. Not just anybody goes and starts a company and whatnot. Did you have that background before? I mean- by background, I mean: were you predisposed to that through growing up? Or was that a foreign thing to you or something that you were very familiar with?

Entrepreneurship?

Yeah.

Yeah I did. I’ve always had that kind of drive for whatever reason to go off and do my own thing. When I was 10 years old I started a business doing magic shows for kids birthday parties. And my mom would help hand out flyers and stuff and get me gigs to go do magic and actually bought my first Nintendo from the from the money that I–

That’s awesome.

Yeah it was basically my motivation. I wanted to get a Nintendo so I had to start a company. But yeah, and then my dad, he actually studies as a pharmacist and he started his own pharmacy when he was 50 years old. And so he kind of had that spirit. And it inspired me to branch out and do my own things as well.

That’s awesome. And the reason why I asked that is because I think that it’s… it’s interesting when we talk to a lot of different founders about what the story is and it’s funny of some, we’re predisposed and had that and others didn’t I know that in my case, because I guess I would consider myself an entrepreneur- because I am. Yeah, I didn’t have that career. It’s funny kind of funny where you mentioned as a kid that you did magic. I just didn’t realize this till later that I had that, I had that entrepreneurial spirit. And I actually did kind of make some money but probably not as gracefully as you did as a magician. I realized later that I became a broker or maybe a distributor. And what I would do is… This is horrible, this is so bad. I would… ice cream, I had the job of collecting the money for the ice cream for lunch when I was probably in third grade.

Yeah.

And so I figured out, I knew that every day there was an average about seven kids that would get ice cream. So I just basically printed off a new- or figured out a new ice cream chart or whatever and just added like 25 cents or whatever it was to each price. And then I knew that anyway it was as long as I collected enough, I can get some ice cream out of that and nobody would ever be none the wiser. Fast forward, I ended up getting my degree in accounting. Now I understand why, so- but I don’t practice it because I realized that was probably a little fraudulent. So anyways, that was too much about me. So, but no, I think it’s– it’s super interesting. So, alright… walk me through the moment I think every entrepreneur has the… they have an idea. And not just one- you have tons. But specifically IAM robotics you had this thing. And it wasn’t just a fly by night decision that you made to say hey I’m going to go start this company. It’s something that you probably thought of and kind of maybe stewed and it took some time to kind of develop. Walk me through that moment in your mind when you said I’m going to do this.

Yeah there was probably multiple moments where I said I’m going to do the same because as this evolved the definition of what this is.

Yeah.

When we started out, we were having… I was on that DARPA project. We were having a lot of difficulties with the robot arm that we were using at the time and we thought, there’s got to be– we’ve got to be able to make a better robot arm than this. And so we started looking at potentially doing that and we were excited about that opportunity. And we thought maybe the challenge isn’t so much building the arm but it’s what you can do with the hardware. And so my first job actually in high school was a stock clerk so I worked at a grocery store basically stocking shelves. And I thought, well, given the success of how that we have now with these robots and how we’re able to get them to pick up things and move them around…

So one of the challenges in grocery stores is what they call shelf-facing. And I don’t know if you’re familiar with what this process is but at the end of the night basically, as people pick things off the shelf stock clerks go through and they actually replenish the shelf. They bring everything to the front of the shelf, just make it look good, right? And it’s all, it’s a hard job and it’s a boring job and you can create a whole night’s work for someone just going down an aisle and just, disturbing things. So it’s really kind of an interesting time and I thought, well, we can get a robot just to go up and down a shelf and just pull things to the front, make the shelf look nice. And then we started thinking, is that really where the big opportunity is and right around that time is when Kiva systems was acquired by Amazon for almost a billion dollars. Or three quarters of a billion dollar wow. Maybe there’s opportunities in ecommerce. And so we started talking with some ecommerce and distribution center folks. And they said, “Yeah.” Picking is- piece picking, when you buy something online, is when someone has to go into a warehouse and grab it off the shelf. It’s largely manual, I think 80% manual.

Yeah.

And so there’s a huge need for that. And that’s really when I was at CMU. I said, “Okay, well, that’s the big problem we’re going to go after. We definitely can do it.” And I made that decision to kind of leave, quit my job and invest money in IAM robotics.

Okay so I’m going to drill into that a little bit more: you made that decision, “I’ll quit my job and go in there.” What… what was that? There’s a moment in your mind: you say, “Alright, I’m going to do this.” Not just like, “Yeah I think I should or whatever.” It’s like, “No I’m going to do it. And I’ll plant my flag. And by doing that I’m quitting my job. And I’m going to drive away with my things. And I’m going to drive off into the horizon saying, ‘I don’t know what I’m driving into.’ ” What was that for you?

It’s a good question. It’s been so long, it’s hard to remember. I know that one of the things that we were really surprised by was we started looking at patents in the space. We thought this has got to be something that someone out there there was nothing. There was… the patent space was wide open. No one had patented robots driving around a distribution center picking up something off the shelf. And I just couldn’t believe that, and I thought, we have to do this. We have to. We have a design, we have an idea. And so I wrote the provisional patent and I handed it to our lawyer. And it was like this 10 page patent. They’re like, “You didn’t write this, a lawyer wrote this.” I’m like, “No, I just kind of copied the style based on all the other patents out there and just kind of used the same language.” And they were like, “Wow.” So yeah, we filed that. And we actually did patent robots either picking something off of the shelf or putting something on a shelf. And the design of how you get a robot to do that and the methodology and so forth. So that was a really big inspiration. I thought, “We’ve got to strike while the iron’s hot and go do that now, because someone’s going to claim that quickly.”

Yeah, that’s awesome. So jumping forward a little bit that’s obviously you did that you made that decision. You’re going there and you mentioned and I’m blanking on how long ago? When did you decide to do that?

So I left CMU in 2013.

Okay.

And we actually moved the company originally to do that robot arm thing in 2012. And then it really pivoted into the piece picking thing in 2013, 2014.

Okay so we’re going to look at six, seven years.

Yeah.

Yeah. Into this right now. Yeah, so what is… looking back on all this, was there- and I know we kind of talked about the moments and whatnot a little bit there- was there anybody in particular, or it could be an event that really struck you, that really influenced you? Maybe, I don’t know if there’s a mentor or a coach or a teacher or a friend or a parent or or some event or something that really helped to define who you are today, and the career that you’re in, in this space? Is there something that jumps out?

Yeah. I think I’ve been very lucky to have a ton of great teachers in my life. And all of those teachers really inspired me to do great things. And I could think of specific math teachers and I went to grad school. My professor at University of Florida Dr. Carl Crane was very inspiring. I think the biggest one was really my dad. Going off and at a later stage in his career deciding to start his own business, that was really inspiring me. And so that that particular event was where I thought, “Yeah, I mean if you want to go do something like this, you should just go do it at all costs, right?” I think there’s too much of a fear of kind of taking that leap. And seeing others in my family do it was a huge inspiration. So I think that that’s probably the biggest thing for me. And then I’m just continually inspired by other large, visionary CEOs out there. There’s so many. And the one that really for me is like the quintessential visionary founder or CEO is actually Walt Disney. So I watch I’m a huge Disney fan and everything they do and to me he was the one guy that could just really make the impossible or just take this ultimate creative vision and make it reality. So that’s the most inspiring for me.

So really from his Imagineering capabilities to be able to–

Oh, Imagineering is super inspiring right? Yeah absolutely. I think it’s almost, it’s harder to become an Imagineer- Disney imagineer- than just to become a NASA astronaut or something like that. Or it was at one point, but it’s one of the coveted I think jobs in engineering.

I think, yeah, I think it’s super interesting. Actually there’s kind of on that level a little bit at least with Walt Disney’s philosophy. There’s a great book on customer experience and success. So it pulls in some of the imaginary elements called be our guests. I don’t know if you’ve read it or heard of it but it’s on my list of things to do. So a list of books to read. which keeps getting bigger and bigger. But I just think it’s… yeah I think that’s awesome about his philosophy, what… what he was able to do. Yeah, just the vision and how not just from a, “I’m going to imagine something and engineer it,” but then also just what they’ve been able to do from just the whole customer, that whole experience like the whole thing- he really was able to capture the whole ecosystem, not just the product. It’s also developing a product in an engaging way that is actually a need for a customer. Which I think a lot of times from a product development standpoint we can get really, you can get really lost in the weeds, like, “Oh this is super cool.” We can do all these just because you can doesn’t mean you should isn’t addressable market so–

You’re right, yeah, no absolutely. Yeah and I think that there’s something really special about folks that can kind of reinvent old markets like that. If you think about- I was just watching recently: before Walt Disney, theme parks were really just carnivals and were thought of as these kind of, not like this really rich immersive experience they were thought of more like a… a place where you go and get… get money swindled away from you or something like that. And people would ask him, “Well why do you want to make a theme park or ground? It’s like, “Well my park’s not going to be like that. It’s going to be this whole different world that you go into.” And getting people to make that leap is just huge, and it’s just unbelievable how some people could do that.

Yeah So, I think that… kind of transitioning and pivoting here a little bit… As we talked about getting into industry challenges and kind of where we are obviously though, the whole Coronavirus thing is ushering in a whole new… a whole huge paradigm shift. And it’s almost like, it’s either… you have two speeds: it’s either exponential, or it’s dead. One of the two. But it’s changes are very slow. Maybe not dead, but very slow for a multitude of reasons. It’s I believe this is an opportunity that you’re going to see a lot of reinvention. A lot of Imagineering, a lot of reinventing something that was old, largely out of necessity. But I think there’s also… it’s kind of we’re hitting a little bit of a reset button. Do you share that idea?

Of Coronavirus really changing the world and getting people to rethink things?

Yeah in terms of… I’m thinking like industry or verticals or just even solutions inside… it’s being pushed to take an old industry or an old methodology and a way to do it. And now it’s flipped upside down on its head, saying, “Let’s do it differently.”

Totally. I think there’s several aspects to this that make it a thing that’s going to compound or accelerate the rate of innovation and automation and so forth. I think you’ve got to kind of look at it from the supply side pressures demand side pressures right so from the supply side you have these retailers and so forth that they are facing this crisis and ecommerce workers and so forth became essential because people needed their goods delivered to them.

Right.

They’re buying things online. Amazon actually hit kind of max capacity so that we would not… they wouldn’t fulfill orders for anything that weren’t critical need items and so forth. Because they had that limited bandwidth. And I think what that says to me is, on the supply side people realized the importance of ecommerce buy online, pick up in-store, you really need to make sure that the supply chain is more robust to these types of pandemics or big catastrophic events. That might happen because it’s so essential for the economy. They were already looking very seriously at automation because lack of availability of labor and all kinds of different pressures, market pressures and so forth. But now it’s like, “Oh we have to go automate this stuff. Because if we don’t have this next time around, we’re not going to be prepared.”

Right.

And then on the demand side I think you have a whole lot of people that have been effectively forced into buying groceries online or items online that they never would have done before. And so now that they’ve kind of had a taste of what it’s like to get those goods online, they’re not going to… a large percentage of them are going to keep doing that.

Yeah.

And that’s met the demand accelerator spike in a way that hadn’t before. So I think it’s definitely something.

Yeah, I think it’s super interesting. We’re going to see in kind of a weird way maybe. I’m obviously… what happened with the virus is pretty crazy and pretty traumatic, so to speak, to say it lightly.

Yeah.

But the thing that I actually… the silver lining that honestly gives me a little bit of excitement is, there’s companies right now that are innovating that are making things happen that otherwise wouldn’t have happened because of this. And I right now things are pretty cruddy for multiple from health to not just the Academy but people’s mental health, people’s physical health, certainly in the economy job all that stuff, right. But it’s kind of interesting, from the 2008 recession type perspective. There was all kinds of innovation that happened as a result of that. Maybe WeWork is a really bad example, but that–

They get mixed up.

But yeah gig economy certainly was a huge and I think- well for sure one of those areas, the gig economy is being even more accelerated now because of that, so I just think that we’re going to see a lot more innovation and I’m pretty interested to see what that’s going to look like. What is somebody working on in their basement or that piece of technology they’ve been working on for the last six months of the last year that nobody knew about or was kind of whatever boom and then this whole other industry part pop up like you were mentioning. I already think in retail, for example, I mean, you were talking about some of the stuff there. There was already a whole movement towards and a shift toward there these are micro distribution and having a mixture of I may be going into the grocery store there’s going to be a robot next week, because the robots picking an order that’s going out for somebody that for curbside or whatever which I was already happening, but it’s so I don’t know it’s interesting. It’s exciting to me that is–

It’s very exciting. And I totally agree and these kinds of things act as a catalyst for accelerating those changes. It’s interesting because we… you’re touching on a number of things that have to kind of tap into the macro scale changes of what’s really happening around this whole shift. With retail in particular it’s really interesting. I think JC Penney announced just recently that they’re going to be closing stores and so forth. So massive retailers really changed… the landscape is changing so fast. And one of the things that we’ve realized as we’ve started to explore, “Well what is exactly the macro trend that’s happening, and how do you quantify it?” It’s really interesting because if you think about people shopping in the United States every year, for instance, people do– customers do 40 billion hours a year of shopping. And that’s effectively going to the grocery store mostly going to the grocery stores and grocery shopping once a week a couple hours. And if you add all that up all that labor that it takes that the customers are basically doing for free their own last mile fulfillment.

Yeah.

If you will by doing their own shopping. 40 billion hours is the equivalent of like 20 million full time jobs. And so what happens if you were to move all of our buying goods online that 40 billion hours? So that’s 20 million full time jobs. It just cannot be replaced.

Yeah.

There isn’t enough unemployment in the country to be able to and the vast number of people that are looking for a job. They’re not interested in going to do this kind of shopping and ecommerce work.

Yeah.

So what that means is that as things continue to move online, you have to automate it because there just isn’t enough people in the workforce.

The workforce, yeah. That’s an interesting perspective and that makes a lot of sense. I mean obviously you’ve seen a big spike. And all the Uber Eats, the Instacart, you know. All that and you’re seeing that shift: shift of dollars, shift of jobs. Yeah, it’s, you’re 100% right, that makes a lot of sense. Makes a lot of sense.

Yeah absolutely. And so yeah those pressures are only going to be accelerated to hell by Coronavirus.

Yeah.

And we think that that is… that’s an opportunity for making our supply chains more robust and taking people out of harm’s way. In a lot of ways. It’s unfair to folks that work in supply chain that they have to go and put themselves at risk. And warehouses are effectively… could be dangerous places for spreading disease because you have hundreds of people walking around a distribution center. If one of them is sick it’s very easy to spread that to other neighboring employees.

Yeah.

So why should they be the ones that have to bear this additional risk? So the rest of us can stay at home and get our goods delivered to us.

Yeah exactly. That’s one small example of some of the change, so I’m curious. With your company, your organization, and just for the audience, everyone who’s listening or watching, this is unscripted, I didn’t send you this question. So I’m asking you an unscripted question. I’m just curious on this. We’re talking about changes and everything with this. What changes are you going to be implementing? Or do you think you might be implementing in your organization as a result of this long term?

Are there any? Maybe there aren’t any but no long term I think we’re more serious now about partnerships. And so we realized that our robots are part of a larger ecosystem. And we realized that for a long time, but now this is the right time to implement a lot of these partnerships with folks that are working on additional adjacent things that make a lot of sense to some merging with our solutions. I was just on the phone for example with an augmented reality company today. And they’re using augmented reality for guiding the picking process in the warehouse. We think that’s a really good thing that can be interlaced if you will with autonomous robots because the same kind of technologies that are used to guide augmented reality in a warehouse things like QR codes and barcodes and stuff like that same kinds of things that we use for robots to guide those picking process. So for us it’s about being able to work with additional companies like that to bring bigger broader solutions to market and to our customer base and to compound the return on investment for prospective customers.

Yeah, yeah, exactly. So one of my last, kind of a couple questions here. Industry challenges: obviously, there’s a lot and we just talked about a lot of them. We talked about innovation and different things going on as we begin to emerge. And things start getting back to what they call, I don’t know, ‘the new normal’ or whatever we’re going to get back to, or we’re going to go to, is… We were chatting before that things are starting to open up a little bit. And we’ll release this video here in a few weeks, I’m sure things are going to change a little bit now. But what are some of the… some of the challenges that you foresee as we start kind of rolling back or getting back and then in the short term and then maybe even in the long term?

Yeah I think in the short term it’s going to be… there’s going to be a lot of challenges around integration putting all kinds of different technologies and part pieces of the– solve the big problem. So how do you integrate all that stuff together?

Yeah.

And I know that there’s companies emerging that are building kind of middleware platforms to allow multiple industrial components plugged in to ecosystems and warehouses and factories and so forth. I think that that’s a near term challenge. A long term challenge, I think that there’s going to be a continued shift of, as I mentioned, as you move more of those consumer purchases online, how do you get closer to consumers and so forth? I think there’s a big opportunity opening up with brick and mortar retailers, closing stores, that’s a lot of real estate.

Yeah.

Available.

Yeah.

Somebody’s going to do something very interesting with it I think. And so I think that that’s an exciting long-term opportunity or challenge or change or getting something out of that infrastructure that’s been built and not just letting it go by the wayside.

Yeah, no, I agree. There’s a big story on… with all the malls and whatnot. That was a big issue before obviously now it’s but yeah I agree somebody is going to do something very interesting like that. And so we kind of sit and wait. Maybe you have the idea? I don’t know, but but–

We’ll see.

Yeah, we’ll see. Well Tom, listen, I really appreciate the time, just kind of chatting getting to know you a little bit more, kind of weaving the conversations around COVID, learning more about IAM robotics. Obviously I see there’s a lot of need for your solutions that you guys have, especially as we’re coming out of this thing. So for those who would like to learn more about you, what’s the best way to learn more?

Yeah, absolutely. We’re at the big trade shows just like you guys are– MODEX and ProMat every year, would love to meet people in person there. You can always learn more by going to our website: www.iamrobotics.com, and we’re always… you can fill out forms and email us directly there.

Alright, excellent. Tom, thank you so much for the time.

Yeah thanks, Danny, I really appreciate it. Great conversation.

Likewise. Alright, so another great episode of IndustrialSage. This is our Executive Series with Tom Galluzzo who’s the founder and CEO of IAM robotics. Great conversation, the topic of the day again being a lot of shift in what we’re… what we think, what we think might happen, what we’re seeing happen relative to COVID and just the industry in general.

So that’s all I’ve got for you today. Thank you so much for watching. If you’re listening on any of the podcasts stations, hey, leave a review, we’d love it. If you’re not on our email list. Go to industrialsage.com and subscribe. There’s multiple opportunities for you to be able to do that. And because why do you want to do that? Because you’re missing out on a lot of other content like our manufacturing news. We have other series, like the… we have other expert series that are coming out- Obviously this Executive Series- we have other executive series that will be coming out in specific verticals. So, a lot going on there, you don’t want to miss out. Go subscribe today, and that’s it. That’s all I’ve got for you. See you next week.

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Okay, let’s jump into today’s episode. I have Steve Smith here, Director of Marketing from SANY America, Steve, thanks so much for joining us today.

For sure, yeah, for sure.

So for those who aren’t with the illustrious Steve Smith and SANY America tell us a little bit about who you are.

Steve Smith, lifelong equipment junky, flunky, kind of got into marketing by default ’cause we didn’t have a marketing department.

I’ve never heard that before.

So, yeah, yeah, I know it’s standard in our industry, but we started from the ground up, I had to learn everything from the group up, but managed a couple hundred people and got into digital marketing back in the late ’90s which at the time was, we made a decision that relationships were going to be managed differently and so we just got full boat into the internet and the rest is history, as they say. But so now I work with heavy equipment manufacturers and dealers and help them improve their brand presence.

That’s awesome. So what I want to talk about for today’s episode, and there’s a lot of things, obviously you’ve got a tremendous amount of experience, we were talking about off camera that, I mean you were into this back in the late ’90s, I mean who else was doing that at that time?

Nobody that I know of.

Yeah.

Yeah, at the time, yeah. There was a precursor to, I would say I was doing Google before Google was Google. By that I mean there was a company called Overture and Overture had these analytics that they used, key word, bars and charts, and there were two and three, four-word phrases that if you match the content of that search term into the title tag and the body of your website you would own the internet. You could have four or five, you know, first-place positions and that’s not true today ’cause things have shifted–

Sure.

But it’s possible with good strategy to make a huge difference in digital so it’s doable it just takes a lot of work and strategy.

Yeah, so I would ask, you know, back then and then to now, like how important is it to be able to have that digital strategy, that online strategy?

Fundamentally the most important thing marketing wise.

Why is that?

I just think that people engage with brands differently. I think that they do a lot of research in the beginning, they’re kind of qualified before they buy, and we can’t control that buyer journey. And so if you’re creating a good first impression, and you’re doing this throughout the course of their interaction with your company I think by default they’re going to give you a chance.

Yeah.

Absolutely.

Yeah, you know- you mentioned the whole buyer’s journey and how that’s all shifted and it’s dramatically shifted, you know, even before we were talking about the Amazon effect, I mean just as consumers you know it’s like we are all, I feel like we’re, we are conditioned to buy differently, and it’s like this speed and I want this information and I want it now.

Yeah.

And it’s no more of let me make a phone call to a rep and try to set up, to get some preliminary information I’m going to wait however long it takes them to get back we want that immediately, we want it right now.

Yeah, yeah.

So, you know one of the other things that I think was interesting that I really want to talk about on today’s episode a little bit more is really this whole thing around CRM, okay, so, you know–

A lot of thoughts on CRM.

Yeah, a little bit huh?

A lot of thoughts, yeah.

So, well let’s, you were telling me, you were telling me a story actually of GoldMine back in the day and I remember actually which GoldMine now, the new founder did a– there’s a new CRM called Nimble, Nimble CRM which is pretty cool, but how you were rolling out with that and I feel like most manufacturers, you know, we talked to a lot and they’re still using an Excel spreadsheet.

Yeah, yeah.

Right, so, why have you guys transitioned over to that and like what, you know, what does that look like?

Well we– back in the late ’90s and early 2000, we had a sales staff of, say, 28 people, all doing 28 things differently. And so we started– I know that’s probably a common thing and so we had this a, this vision of, we had a very big territory selling into what was arguably at the time the sixth largest economy in the world selling a commodity-based industrial product, a forklift, and we were told that we needed 40 some odd people to cover our territory but we decided that we, that was too many people, there’s overhead, there’s more management there’s more–

Right.

Cost burden to do that and so we said, you know what if we own the internet, we focus on our target market, ’cause not all the market that we were told to cover was targetable, it wasn’t an addressable market which I think is a big distinction. We needed an automated system that’s predictable and visible but we didn’t want to overbuild it ’cause salesmen sometimes, or salesmen or woman, they want to, they don’t always do the right thing, their hearts are always in the right place I think–

Sure, yeah.

And so we developed the CRM system back in 2001, 2002, at the time was GoldMine an Enterprise Level 6.7 Edition, I remember it like it was yesterday, time goes by fast, and we hooked that system up to our website and, our fully optimized website, and got leads and pushed leads out to flip phones so that we’re getting leads on our phone and that was a revelation. And just by automating those processes and defining the amount of fields that we wanted the sales staff to put into the field, ’cause I’m a big believer in CRM at its core it’s to help you manage customer relationships but it’s not designed to help management manage salesmen, and so the distinction is different because we just don’t like to pull out of, as a former equipment guy, we don’t like to put any more than is necessary in the system.

Right, yeah.

So we designed a system, my quarterly speech was, “Garbage In and Garbage Out,” where I would say, “If you put in this kind of information here’s what we’re going to do on your behalf.” At the time, this dates me a little bit too, we were starting to do emails with the information, this is in the early ’90s so we had a good email system that was already going out and we had, or a, recommendation engines so we’re already promoting our other products and services that people have and we’re able to track all these analytics through our CRM system, but it was garbage in garbage out.

Yeah.

As long as they gave us good information we would help the salesmen penetrate new accounts in their territory and once they saw that we were actually not acting as a Big Brother for them, then they’re like, okay, now I’m all in and the whole thing sort of just took off. And at the end of our, we had sort of a five-year lead study that we did we went from 430 qualified leads to 4,800 plus qualified leads and the salesmen bought into it, and management bought into it, but the key at the end of the day was we didn’t overbuild the system and we didn’t over complicate it because I think that’s… in my experience, people overbuild CRM systems, they have the best of intentions, but very seldom are they actually installed and done correctly,

Yeah, I think that’s a huge thing. We hear a lot of times, you know I’m not trying to knock a big-name CRM, I’m not, I won’t mention, but we all know who we’re talking about.

I will.

Yeah.

No.

Yeah, I mean, look it’s, we’re talking about Salesforce in case you didn’t, you didn’t pick up on that, for our audience there, but… Salesforce is a great product, it really is, but it’s like the Ferrari.

Yeah.

And if you don’t know how to drive per se, or you know, it’s like: don’t get the Ferrari. And then we see that a lot where it’s like “We have to have a CRM! We go from Excel spreadsheet, Where are our leads from this trade show?” “Well, it’s in Susie’s drawer.” “Well, let’s dig,” you know.

Stack of business cards.

Yeah exactly.

Yeah, like that.

And then we, you know, you get into this thing it’s like, “Hey well, and it just falls apart,” and I think a key thing you mentioned was buy-in. Particularly on the, you know, I think management, upper management typically is like, “Yes, this is great because we’ve got all these metrics and we have all these great things we can look at.” But where the wheels fall off a lot is that actual, that behavioral change. That buy-in. So how, talk to us, talk to me a little bit on how you, some of the tactics and strategies you’ve used to be able to kind of, you mentioned that a little bit like taking the data and reducing that, but how long did that take and what does that look like?

You know, because I had people come out and visit our dealership at the time and they would say, “Hey this is great.” Our dealership was studied as a best-practice digital dealership back in the early 2000s. And they would say, “How long does it take for you to get all this stuff in place and working in buy-in?” I said, “A couple years,” at the time. And they said, “Well, we don’t have two years.” And so I’d say, “Well, you can go back to your old strategy and do that if you want,” which is Excel spreadsheets and business cards, or whatever. I think that can be done in a lot less time today, I think six months is realistic. But it starts with having a roadmap of expectations that this is the benefit for the sales staff, this is the benefit for the customers, these are all the processes that we could do and Salesforce is a great example of saying they can do everything, and they can. For a small fortune, they can. But if the key is really just to stay in contact with likely prospects then you have to define what that, what that roadmap looks like.

And I think as far as sales staff is general is concerned, the easier you make it the better. And we started out, it was too complex, we had too many fields, we wanted to know 20 different things about customers and the reality is we really needed to know about five. And so the feedback that we got from the sales staff was, “Hey Steve, this is great we know what we’re doing and we love what you’re doing, we buy into it, but you’re asking for too much information, we have to sell.” And having sold equipment for a living I know a lot of my time was engaged in relationship building and it wasn’t always about doing reports and coming home every night with my family and filling out all this stuff. So to the degree I made it easier for them, they bought in exponentially. And that’s, when I’ve worked with clients in the past they kind of get that and I’ve engaged with people in CRM rollout programs and it’s always dumbing down what you first do. Lower your expectations, make it easy, get some traction, and then sit back and go, “Okay, that’s kind of nice. Maybe that’s good enough. Maybe we shoot for the moon next go around.”

Yeah. I love that, there’s some really key things that, one thing I think as the most important piece is that you listened to the sales team. So it wasn’t like, “Okay, this is what we need to do and we’re pushing it and it’s all about us, and let’s hear to that feedback.”

Yeah.

I mean obviously you were there, that was your thing. So I think the other piece with that is making it easy. Make it really easy. And I think that’s where a lot, we get all tripped up like you mentioned. “Oh we want all theses fields, we want all this customer data, we’re going to have this,” and it’s like, “Am I data entry, or are we selling here?”

I think the, I think all the intentions of management and IT, whoever’s involved in the initiative, are always well-intentioned, but if they haven’t sold equipment in the field and don’t know what that’s like, it’s great to start out with these plans, but the reality is is they haven’t lived that life, and so they don’t know how challenging it is. And we used to have this saying: “See 20 people in a day,” when you could physically knock on people’s doors and visit them, but you can’t do that now. People don’t want to see you. I don’t want to be called on by a sales rep. I get sales calls all the time. I don’t want to engage; I’m too busy doing what I’m doing, and I’ve already done all my own research now so I’ll call you when I need something that you’re selling.

Right.

So, and I think statistics say you have to be on someone’s radar like 20 times over the course of a calendar year, little impressions, messaging–

A lot of touch points yeah.

A lot of touch points, so that when they’re ready they’re warmed up and if you do that, and you do it well, then you’re in the hot seat, or you’re in the driver’s seat. But I think what we did differently is I had the benefit of selling equipment so I started off with a system that was designed to help the sales staff sell, not management or Big Brother to look at reports. And that’s a distinction because management wants to do, they want to see all this stuff, but it’s not grounded in reality of selling I think. And CRM systems will be a great tool for anybody, provided they’re executed and planned for the right way. It’s just, I think stats are like 90% of companies start and fail, or 95 or something like that.

It sounds, that sounds about right.

Yeah.

You got rid of that process. So let’s, so my next question then would be, so for that company that’s saying, “You know what they’re talking about us right now,” or, “Yes, we are that company that’s got that, that’s got all the spreadsheets and we don’t have it, what are the first few things that we should be thinking about?”

I would sit down and have a round table meeting with the stakeholders that were expected to use the system and say, “Alright, we need to do something different. What are your thoughts, what are your ideas?” Do your research, you can google top 20 CRM systems and you’ll get a report that’ll tell you, who’s good and who’s bad. But understand: there’s strengths in the weaknesses. Salesforce has a lot of strengths, and it has a lot of weaknesses. There’s simple email automation, marketing automation programs, which can over automate if you’re not careful, but can be installed for 50 bucks a month and capture web data and push messages back out and sometimes for a lot of companies, that’s enough. And then, but then you sit down there with your group and you say, “What are the follow-on activities we’re going to do with this data? Are we going to have customer events, are we going to call them back once a quarter, are we going to drop a direct mail piece in the mail? Are we going to use that data to build custom audiences for social media or online promotion campaigns? What are you really trying to do with that data?” and you have to start there.

You just can’t say, “Hey, this is our CRM system let’s do this.” You just got to figure out what your… just start off with a planning strategy with the people that are going to be using the system and ask them, “Would you be willing to do this?” And there isn’t a sales staff alive that I’m aware of that likes Big Brother looking into their stuff. And so, and they’re not going to change in our lifetime. The psychology of the sales staff is not going to change. But if they know that the plan involved is doing something that benefits them so they can touch more prospects across the board, without them doing a thing and just taking orders and closing deals, or doing the final sale, I think that you’ll get the buy-in.

Yeah, no, I think you’re 100% right, dead on, that totally makes sense. It’s like, so you’ve got to sell it to the salespeople you’ve got to use– But the reality of it is it should be, if it’s, if it a fully flushed out process in the system and you really do have a true integration, an alignment between sales and marketing and it should be, look, marketing should be helping to generate leads–

Yep.

That, you know, and get them from marketing qualified over to sales qualified–

Yep.

Take that education from, we don’t know you from Adam, or we met you at a trade show and we had a, we weren’t ready to buy, but the sales cycle is six to 12 to 24 plus months–

Yeah, yeah, or under.

How do we continue to engage and then have the right metrics saying, “Hey, okay, I know. We met this person two years ago and now they’re ready to go, and let’s get that over to somebody.” You tell that to a salesperson like, “Hey, instead of you spending 80% of your time prospecting and trying to figure that out,” it’s like, “Hey.”

We don’t need to do that today.

No, no.

Yeah. I have a client I’m working with now, we can talk about them if you want, and I’m their Director of Marketing and they brought me in because they needed a complete brand overhaul, and they needed everything. New, good flashy website, brochures, at last count we have about 83 separate projects going on, but at the core of what we’re doing is to generate leads and awareness and get the sales staff qualified leads that have been pre-qualified, they’re warmed up so they can close the deal. So part of my practice is to go in and say, “We want to generate leads. We want to generate the right kinds of leads.” Here’s all the methods we’re going to do to do that.” And then the interaction that you have at each interaction level is critically important. Does the material look good? Are you touching all the emotional hot buttons that this audience may have because they’ve all got frustrations, I’m positive they have all got challenges.

Yep.

And if your messages touch that then they’re going to respect you for understanding who they are and the pains that they have–

Right.

They’re going to pay attention to you over time–

Right.

And then in the heavy equipment space the sales cycles can be from, you know, one minute to years long.

Yeah.

And so however that sales cycle is defined, you’ve got to make that initial first impression count and then every impression thereafter count, professional, good quality, good quality. You know followup processes we have the same, especially in your inbox, to be that welcomed guest not an uninvited guest, and if you just bomb them with meaningless information that’s not centric to that particular audience then, then they kind of turn you off.

Yep.

You know, so that balance is, it’s important to understand upfront.

Yeah, no absolutely, and you don’t have to look very far- just look at your own inbox and get a sense of what do you value–

“Delete, delete, delete.”

Versus yep. Delete, ignore, or it doesn’t get through and I think that, you know, a lot of great things there, obviously the relevancy. You know having valuable, valuable information and solving their pain and I think, you know, I think that there’s been a huge, well now I think a lot of manufacturers are realizing hey we, we definitely need to make this shift and the marketing message of yesterday was, was of like, hey, we’re the big brand and we’re…

I ask for no justifiable reason.

Right, yeah, yeah.

Rather than how we solve problems.

Exactly.

Yeah.

And so you’re buying brand, you’re buying, you know, we’ve been around since hundred and twenty three, so we’re the 800 pound gorilla in this space, so you need to buy it from us and I think that that is–

It doesn’t work.

It doesn’t.

It doesn’t work as well. And for the companies that have huge traction, good for them, but for the upstarts that are seeking to displace them, at the core level every company has a product and a service they got into business with before. There’s a reason they got into business and if you dig into the reason that product was developed it’s probably got some good value proposition stuff in there and you’ve got to bring that out into the marketing messages and let everybody know, “Hey this is how we solve the problem that’s unique to you. And old advertising guy, Claude Hopkins, I don’t know if you’ve heard of him. He’s from way back in the early ’20s, but he said, “Platitudes and generalities roll off your back like water does to a duck, and specifics sell.” How you specifically build a case based on evidence on why your product and service is statistically better and people just are inclined to believe in data and stats rather than a general message, and that should permeate throughout everything that you say and do marketing-wise I think.

Yeah, yeah, no, absolutely. I mean you’re talking about getting into looking at, you know what we talk about it here is a lot of persona development, so looking at, you know, okay we’ve got a product and that product could be sold in many different verticals, you know, just depending on what that is, but then even the person that you’re selling it to inside that organization you have different messages and there’s different pains there. So at the top level versus the end user, that it’s very different reasons or maybe look at the top, hey, how can we drive costs and save this and all that versus maybe end users, more ergonomics and more, you know, so how do we tailor those messages depending on that person that we’re talking to because if you’re talking to an end user, yeah we can save you all this money and, I don’t care about that. What I care about is, I don’t want to feel, I feel exhausted at the end of the day using all this other, whatever.

Yeah, and in our industry, for example, uptime, having the equipment run all the time, and the support services that you put around and your 24/7 contact information and your uptime plan, or whatever creative marketing program you want to put together, the customer makes money in our space typically by having equipment up and running, up and running all the time. And when it’s down, it costs them money, so you have to build your support programs and your messaging around that, this is how we’re going to keep you up and running and instill some confidence in this new prospect before it becomes that customer. And I think at the fundamental level every audience has hot buttons you’ve got to dig into and say, “What do you hate most, or fear most in your day?” What does a customer fear or hate most? And when you understand that, when you understand that answer it drives the marketing messaging and makes our job easier.

Absolutely.

But I think a lot of companies… they don’t take the time to do that or they just, they sort of assume that, “We know what’s best for the customer.” Don’t do that! Ask the customer, do surveys, get in there and take the good news with the bad news and even ask about how your company’s currently doing and it is what it is and then go back to management, or whoever you’re trying to sell the concept of marketing to and say, “We’ve got some work to do,” or “We’ve got some strengths we need to focus on, But you know, we’ve got some work to do.”

Yeah.

Yeah.

As they say, you can’t fix what you can’t measure.

Exactly, yeah.

So whether that is, you know, customer feedback, talking about net promoter score, whatever, if you don’t have the data, or you don’t have a way of being able to collect it, then yeah, you’re just kind of like, you know. You know it reminds me too, talking about it’s like, even with a lot of product development it’s the same thing, it’s like oh we can make this and this is amazing, this is super cool and this is going to be awesome. And what, the customers, is that a real need that the customers have?

Customers have?

Yeah, exactly, well, I mean, you know, and that’s, you know, that’s a big challenge.

Yeah, yeah definitely.

So, yeah so listen, I’ve really enjoyed our, you know, our conversation I think we could go on for hours talking about–

Days.

CRM and marketing and, is there anything else you want to add to that conversation there before we wrap up, any last parting thoughts maybe to a company that is still, you know, on that, saying, “Yeah, we need to make this jump, we need to make this jump to CRM.”

You must make the jump to digital CRM in a comprehensive approach for sure. I think not doing that you’re leaving opportunities and money on the table. I think for our industrial network, industrial audience, we have nothing but upside on all levels, and there’s nothing that we can’t do, it’s not like somebody says, “Hey, I want you to build a rocket ship and go to the moon,” which is an analogy I use. I can’t do that. I’m overwhelmed with that. But to figure out who your audience is, what they’re hot buttons are, how to deliver the messages consistently over a long, short and long time horizon, with really compelling reasons to do business, is not difficult. There is a process, there’s an evaluation process where you evaluate how well you do now versus how well you want to do, but this industry in general has more upside than any I’m aware of, and I love being involved in it.

Awesome. Well, we agree 100% and that’s why we love this. Here at IndustrialSage–

Thank you.

We’re super excited about it, so thank you so much for coming on and sharing a lot of valuable information and your story and your background. I think a lot of our audience will really latch on and I think what you’re saying will really resonate.

Yeah, you’ve just got to take that step. Take the step.

Take that step.

Call this guy.

Or these guys.

Right.

This is awesome. Thank you.

You’re welcome, thank you.

Thank you very much. Okay, all right so yeah, another awesome episode here. You know if you haven’t picked it up yet, if this is your first episode well then get excited we’re talking about this all the time. If you’re a listener, a loyal listener, or watcher, many of you are watching videos, we talk about this all the time. You have to make that transition but there’s a lot of, a lot of really key pieces for me on here particularly with the CRM piece because that is something that comes up all the time we talk to tons and tons of manufacturers and you hear that story of you know, we’re going this way and we’re going 100% into, you know, Salesforce. Look, I’m not knocking Salesforce I’m just saying, I’m knocking the process- that’s what I’m knocking. Salesforce is great but you’ve got to, you’ve got to qual-, well not qual, you’ve got to crawl, walk and run, right?

So let’s just start this off right and I love the advice where Steve was talking about, say, “Listen. Before we make this evaluation bring everyone together, get that round table, talk to the sales team, get some ideas, what those challenges are,” because he’s totally right. And if you haven’t actually sold these products you don’t understand. We were saying, “Oh we want all this information from a marketer’s standpoint and from a management standpoint, we’re going to generate all these reports and everything,” and that’s really a huge pain and a challenge for them and you know what’s going to happen? They’re going to resist. And I know a lot of you probably are saying, “Yeah, that’s exactly what’s happening in our organization right now. We’ve rolled out with this and people aren’t using it and they’re resisting. We have to make it easier, we have to be able to show what’s in it for them because really at the end of the day it’s this, it should be this shared unified goal.”

So, anyways, thanks for listening. Listen if you are listening to it on iTunes, or anywhere on the, any other podcasting tools there, we’d love a rating or review. If you are on social media we’d love you to share our content. And listen, if you are not on the email list you need to get on that. Go to IndustrialSage.com. We’ve got all kinds of valuable assets not only are we going to release these episodes and other educational content, but we’ve got some special content for you. We’ve got, you know, digital marketing planner guys, insights, persona development, we talked about that in here, all kinds of tools and resources to be able to help you to really take your organization and take it to the next level. So make sure you sign up there. If you have any questions you’d like us to answer we’ll make an episode out of it or answer it on another episode for you. Go to IndustrialSage.com/questions and we will answer those for you. We love doing that all day long. So, thanks for watching or listening, I’m Danny Gonzales and this is IndustrialSage.

Thanks for reading. Don’t forget to subscribe to our weekly newsletter to get every new episode, blog article, and content offer sent directly to your inbox. You can also subscribe wherever you download podcasts so you can listen on the go!

Hey everyone, I’m David Caron with IndustrialSage. Today’s executive series, we want to take a moment and reflect on a few of our past executives and highlight some of their insights. Let’s start with Cory Flemings of JBT, who had some great insights about automated robots AMRs and AGVs growing in the workforce. Even in some environments we may not expect like hospitals or subzero freezers.

Many people would, I guess, be surprised to find out that many of the hospitals that they go to actually have behind the walls are automatic guided vehicles running, running behind the scenes.

Really–

For example Ohio State University, they have, I think, 64 vehicles at the facility and they, it’s really an intralogistic system of the hospital.

Yeah.

You’ve got food to deliver, you’ve got dirty laundry to take out, you’ve got trash to take out, you’ve got surgical cabinets that need to move, supplies come in from the supply room that need to be distributed through the hospital. There’s a logistics system that’s completely automated in that hospital, that actually has elevators that go from the basement all the way to the 23rd floor. Greenville, South Carolina has a hospital that’s completely automated.

And that’s all behind the scenes kind of thing–

The patients don’t even know that they’re there.

Okay, interesting.

What we’re starting to look at now is moving with AMR assistance to move into patient rooms using these kinds of AMR vehicles as well. What’s rather new in the marketplace is a vehicle that will actually work in minus 20 degrees centigrade temperatures. Think about how much it costs your labor if you have to, those of you who have at least freezers know how much you have to pay for labor to go work in a freezer all day. So these vehicles live in the freezer and they work 24 hours a day, seven days a week. They get charged by, getting charged through the wall. The chargers can be outside the freezer, they plug up on the thing that comes through the wall and the vehicle stays in the freezer and keeps working. Revolutionary really, it’s been something that the freezer companies have been asking for a long time.

Next, we had Tim Vargo of Exide who discussed business sustainability and addressing the desires of different generations within the workforce.

Everybody’s always looking for the easy solution and so lithium has come on board here over the last decade or so, people are saying “Lead acid is dead, lithium is the solution.” Kind of forgot lithium’s got a lot of stuff in it that people don’t like either and isn’t good for the environment and oh, by the it’s not something that’s completely recyclable yet and may never be.

Really.

And so, um, so we’re, we’re dealing with a couple of things, we do lithium today, we buy lithium cells, we assemble them, provide solutions for a variety of different energy needs from backup power to motive power for forklifts and that sort of thing. But, it’s a complicated problem because the industry isn’t old enough yet to have developed the full recyclability. So we’ve got to be good stewards of that product as well, though, and that’s exciting. Now that I’m old enough to remember people saying that when I was young, the work ethic had gone down the drain and we didn’t have the same work ethic. And I’ve been around long enough to hear that from my kids and now my grandkids and what I would tell you is we find a great workforce out there today. They’re easily motivated, provided you are giving them reasons to work from where they like to work and how they like to work. And so challenge for old guys like me is to try to figure out how you can make sure you’re providing a work environment for today’s employees

Yeah.

Differently than we had in the past.

Yeah.

And I think our company’s doing a really good job of that.

Matthew Putman of Nanotronics shared his timely insights on this era of rapid technological advancement and COVID’s impact on that development within the supply chain.

We’ve had for your life and mine, you’ve heard something called Moore’s law, which you’re familiar with. If you’re familiar with Moore’s law, that basic idea is that you have computational power that increases at the same price at the same time, price and costs for us comes down as things get faster and better. But there’s also something that’s happening that is a bit dangerous and a challenge. Is that to make those electronic devices, the factories to build them are exponentially getting more expensive. Our fabs, which is fabrication factories to build semiconductors, they cost over $20 billion to make now. To build a factory, it’s unthinkable for any other generation or any other time. Any other time meaning even 10 years ago, this was unthinkable. So a huge challenge is to bring about some of the changes that I was mentioning earlier in order to make factories much, much less expensive. If you don’t do that, the barrier to entry is going to be huge. You can imagine the barrier of entry for you to create a podcast or for us to write an app that might be interesting for our phones or for the computer, the barrier to entry is only our imagination and what we want to do with it. Barrier to making a factory right now can be billions of dollars.

Finally, we’ll leave you with a teaser from next week’s executive series interview with Tom Galluzzo of IAM Robotics. You’re not going to want to miss this episode.

If you think about people shopping in the United States every year, for instance, people do, customers do 40 billion hours a year of shopping. And that’s effectively, going to the grocery store, mostly going to the grocery store and grocery shopping once a week, couple of hours. And if you add all that up, all that labor, it takes that the customers are basically doing for free, their own last mile fulfillment, if you will, by doing the shopping, 40 billion hours is the equivalent of like 20 million full time jobs. And so what happens if you were to move all of our buying goods online, that 40 billion hours, so that 20 million full time jobs, it just cannot be replaced.

Yeah.

There isn’t enough unemployment in the country to be able, and the vast number of people looking for jobs, but not, they’re not interested in going through this kind of shopping and ecommerce work. So what that means is that as things continue to move online, you have to automate it because there just isn’t enough people in the workforce.

Thanks for reading. Don’t forget to subscribe to our weekly newsletter to get every new episode, blog article, and content offer sent directly to your inbox. You can also subscribe wherever you download podcasts so you can listen on the go!