IndustrialSage

Hey, so for today’s episode, we’re going to talk about CRMs and which tool your industrial sales team needs to use. All right, so CRM, we’re going to talk about this. This is something that we’ve talked about a good little bit, and it comes up a lot, because it’s exciting and there’s a lot of companies right now that are going through this digital transformation piece, which we’ve talked about a lot: not just in the operations, but also in the front office piece, when it comes to sales and it comes to marketing…and a big, big, big part of that conversation is your CRM tool.

A lot of companies are still relying on a spreadsheet, or some antiquated system or something that doesn’t really talk well, and part of the problem is that with the new ways that we’re going to market with the new technologies, and the speed of information that we need, a lot of these systems need to catch up. And if you have one – if you don’t have one you need one – so, that’s kind of what we wanted to talk about today: if I have an industrial sales team, what CRM sales tool should I use? What do you think, David?

Well, I think the first thing that we hear from the marketing side is, the sales team doesn’t want to use it. It’s tedious, it’s cumbersome. They think, “Hey, I need to be out there selling, not entering in a bunch of data.” So, I couldn’t agree more, and it feels like you’re slowing down when you think it should be helping you, so a lot of the tools now are making it even more easy to input that data, or input it for you, so when you’re looking at Salesforce, or Microsoft Dynamics, Hubspot, they’re all great tools, and even when we look at our survey. We surveyed what, almost 200 industrial organizations, manufacturing organizations, and they said 34% of them are using Salesforce.

Not a surprise there.

Not surprised.

Big 800 pound gorilla.

Yep. Then we have 12% using Microsoft Dynamics, so I’d say maybe a couple of years ago I’d cringe, and be like, “Oh my gosh, I can’t believe you’re using that. No wonder you don’t like your CRM,” but now you’re seeing a lot of improvements. I think they’re really trying to answer to the user that’s using it, and then you’re looking at, maybe a little guy that’s new, still publicly traded, but Hubspot is a free CRM. You kind of eliminate your excuse for your organization, so looking at those three robust options, you kind of don’t have an excuse to not use one.

Yeah, that makes a lot of sense, and I think especially, I think that one of the big shifts that we’re seeing in this will help justify that expense and making that shift is really getting a sense of looking at that customer journey and making it really easy to buy. I think that’s a… you’ve got a lot of competition. Maybe you’ve got a commodity as a product it’s very hard to be able to compete on price alone and typically that happens a lot. But one of the ways of being able to answer that is just looking at your sales process, looking at your customer service, dealing with the organization. Is that easy? Is it frictionless? Or is it full of friction?

Right, and that’s where the marketing side of the organization. It’s, how can I get more data to be able to take action on?

Right.

And get the sales qualified leads in front of my sales team.

Right.

So, your CRM is really going to either help or hinder.

Right.

So when you can have form fields on your website that auto completes or when the person puts in their email address it can automatically fill in their website URL and the company name and maybe pull in public information like, the phone numbers and things like that okay? That to me is time saving, helps you qualify those leads way better, much faster. That’s what a CRM can do.

Yeah.

So put those tools at your sales team’s fingertips to sell better, versus “Where is this information? What’s their website again?” Things like that.

Spending 30 minutes just doing that basic research on a company. One of the things that I love is that you hear about sales automation a lot. Sometimes, automation gets a little bit of a bad rep when it comes to sales and marketing because sometimes people think, “Oh, you set it and forget it, and that’s it.” No! Do not do that! But I think there are some really cool tools that a lot of companies… we’ve had a lot of conversations with manufacturers over the last several years and just sharing, like these simple little features and these really cool tools. People are just, their minds are blown. For example, the ability for you to be able to set a sales email, send it to a prospect, let’s say after a trades show. And if you’re following up, you want to send them sales deck or something. To be able to actually have analytics and data to be able to see that they opened that email, and see that they actually clicked through on there, that’s mind-blowing to people.

Absolutely.

Still, the reality of it is, it’s still new technology. But it’s super powerful. So instead of just sending that one email to somebody and you have no idea, “Did they open it? Did they look at it?” You’re getting that information right there and that’s going to help you from a sales standpoint to say “Okay, I’m not freaking out. Did they get it, or did they not get it? Okay, they got it. Ooh, they opened it one time. That’s great. Oh, they opened it 20 times! Maybe that means they forwarded it on. Okay, this is good. I’m going to wait before I pester them again.”

So it’s giving you actionable data that helps you focus where you’re going to spend your time. So sales? It’s numbers. You’ve got to do a lot. Have the data work for you.

Right.

And it’s not just, “Oh, they opened my email, great,” it’s knowing based on that information, what am I going to do? What’s the next step? Well when they don’t reply to it, it’s being able to have that sequence set up so that three days from now they’re going to get another valuable email from you, which they are hopefully opening and sharing within the organization.

Yeah, no, absolutely. You know, there’s no lack of CRMs out there. There’s a ton. I know we listed the top three based off a survey and there was a handful of other ones. I think Zoho is probably number 4 on that list. Then there’s a few others. No lack of them.

There’s a big bucket of everything else. So when you’re that scattered it’s hard to pull anything value out of that.

Right. So what would you say maybe – Some ideas around somebody that like, “Hey, we think we need this.” What are some ideas around evaluating which tool might work best?

Well, a little while ago we had Cassie from Ad Victoriam on and she went into a lot of those questions you might ask. So it’s really, how does a CRM fit into your overall sales process? And that’s not just from inbound lead or an outbound lead coming in to where they buy, but even post-purchase. Through that entire life cycle because customer service can be involved and that can all be powered by the CRM. She goes into a lot of great detail, I think we can include that in the show notes. A much more detailed response.

Absolutely.

But it’s definitely – you’re looking at it touching every aspect of your working station.

Yeah, and I think that’s the interesting thing in a way of looking at it. That instead of just being a silo tool, that’s just strictly used for let’s just call it outbound communication, from a sales standpoint, it really is – and depending on which ones you get definitely these top 3 can be lot more sophistication to them and they can be configured to really help support the whole business operation piece and that is sometimes where people they kind of misunderstand the value of it. I’ll give you a really good example, I’ve talked with a lot of companies in the past and you’re starting to see this a lot more is that they hold the ability to CPQ: “Configure price quote,” if you’re not familiar with that. So, a really fancy word for- I think you have a really good story about the – the BMW story.

Yeah, So I got an email from BMW on their latest model they’re coming out with, and I have a certain affinity to BMWs.

I like Audis, but anyways.

So, it gave me this option, “Configure your custom BMW,” and okay, I’m probably not going to be able to afford it right now: a dream BMW, per se. But being able to build out that customization is super easy, and I’m doing it on my phone and then realizing “Hey, here’s a $180,000 vehicle that is absolutely gorgeous, I’m going to save that in my favorites folder for later.”

Okay.

Some goals.

180, all right.

Just 180. It’s not your Ferrari.

Yeah no. I’d have a hard time spending- I don’t know. I’d probably buy a plane with that. Anyways, I don’t want to digress but sorry. Must’ve been a really nice BMW though.

Oh, gorgeous. It was fast enough.

Fast enough, okay, so it meets some certain criteria. Alright that’s good. Well, I think that’s – I feel it’s an interesting thing because obviously from a consumer standpoint, you’re seeing the same thing on a B2B purchase, and especially when you have purchases that are a lot more complex. It’s a great starting point to get a sense of… the ability to be able to – just like with the CRM – where you’re able to choose to customize a part or a tool or a machine that’s able to fit my specific use case.

There’s areas that, the engineers, the product teams have not even thought of yet that you’re like, “Well I have a specific thing and I can kind of build it on and kind of do my own thing,” I think is great and the ability to sort of own that data and that process inside of a CRM tool that they can talk back and forth is huge. I think a lot of companies, there’s a lot of… we’ve got the distributors, the dealers who are working with large equipment where you’re coming and you’ve got your order form, “Let me put this in and let see what it is, and I’ve got to submit it.” Maybe you do have a digital system. It’s all online somehow. But then, if it’s not connected through a central storage unit if you will.

Paper is slow.

Yeah, yeah.

You’re dealing with paper, too many people have to touch it, there’s room for error.

A lot of room for error.

And then you’re still going to digitize it anyways.

True.

So what’s better? Star with paper?

Right.

Or have it on a cloud system that everyone can access within milliseconds of that data being in there.

Exactly.

And it’s even user-generated data.

Well, the other piece too, is you have multiple entries, so if somebody is literally writing here, you mentioned that it’s prone to error, and somebody’s got to take that in and digitize it at that point, so you’re doing that step twice and who knows how many more other times. Which is going to increase the error rate, not to mention the speed aspect. So, it’s just one example of using this technology inside your ecosystem to be able to help really create a much better experience for your customer. To increase the speed of being able to do that which is going to really ultimately affect which we’ll talk a little bit later about reducing that sales cycle time.

Is it three days to get a quote, or is it three minutes? You tell me which one is going to provide a much better experience.

Right.

I think three minutes.

I think, to that point we talked with Xometry about a year ago and you’re seeing a lot of these different companies kind of pop up that are really thinking forward like that and if you think about that. If you’re not familiar with Xometry, they’re kind of like the AirBnB or the Uber of custom manufacturers. If you want to go get a quote, you can set up a free CAD file. If you want to do something in a small batch it’ll kick out a list, with the price and everything. You’re seeing more of that. And I think that is just helping to make it easier so that, what I need to get to my customer, I can get it better, faster, and hopefully cheaper. That’s really kind of where everything is going. I know we can probably go on and on and on about it. There’s some really really cool stuff that you can do with this.

I think the biggest take away is, that the CRM is really going to help your organization versus hinder it. But you need that top down buy-in implementation.

Right, Yeah. I agree 100% with that. I think the other piece too is maybe, dovetailing a little bit as far as tricks on how to get some of that buy in on the lower end from the salespeople’s point. Instead of it coming necessarily from a top down saying, “We have to do this,” because sometimes there’s this perception of, “Oh, we need the reporting, and you have to do this,” and the sales team’s like, “Are we freaking data entry people, or?” like, “What’s going on?” Well, no, let’s look at these tools that’s going to help make your job easier. So maybe instead of talking to these trade show people, you’ve all got to set up 50 email follow ups, well guess what, we can do that, or create one template it out and then fire it off to all of them instead of saying copy repeat whatever. Instead there’s a lot of tools that these CRMs have that really help to automate that process, just like we’re automating processes in the manufacturing plant on the floor.

And when you’re automating it and using that process you’re tracking data. Not just, “Okay, did they open it or not,” but, “Did they take action after that?” And if they did, hey, that means the email you’re writing is very effective. Wouldn’t you like to know that out of the prospects that you’re sending an email to, let’s make up a number, 50% are then taking action? Or is it lower? Is 10% taking action? Well, I’d probably write a different email.

Yeah. So, a lot of really great things we can do here. You know what we should do later? I might get in trouble for doing this, it’d be really cool if we had like comparison charts of the different CRMs, check boxes, and different things to be able to help build companies. I don’t know, maybe we’ll do that.

They could work towards it.

I’ll shut my mouth. Alright, that’s all we’ve got for you today. With this episode of IndustrialSage. Hope you liked it. Listen, if you have any questions, a particular topic of interest or concern or something that you’d love for us to address on the show, reach out, you can go to industrialsage.com/questions. If you’re listening on the podcast, we’d love a review, and if you’re not subscribed you need to go to industrialsage.com and sign up for all the newsletter alerts. We’ve got tons of content coming down the pipe that you don’t want to miss. So that’s all I’ve got for you today, I’m signing off, I’ll see you next week with another episode here on IndustrialSage.

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Okay, well, welcome today’s episode of IndustrialSage on our Executive Series. I have the extreme pleasure of talking to Fran Brunelle, who is the President of Accelerated Manufacturing Brokers. Fran, thank you so much for joining me today on IndustrialSage.

Danny, thanks for having me. It’s a pleasure to be with you today.

So Fran, so tell me a little bit about your journey. How did you get to where you are today?

(laughs) Okay.

I know it’s a little question, right?

Yeah, a little question with a with a big answer. So I actually started my journey in servicing the manufacturing community, believe it or not, as an industrial auctioneer.

Oh, wow.

Yeah. So we were helping manufacturers exit their business when there was some sort of need to exit. Sometimes there was a medical issue. More often than not, it was that they were in financial trouble. And the auction process is an accelerated way to exit from a company. But interestingly, the companies that were buying the manufacturing equipment for us were growing thriving manufacturers that were consistently trading out their pieces of equipment for a newer piece, the more modern piece, right? And it was at their behest that we began our journey in the M&A field.

So one of our longtime buyers came to me and said, “I’ve just been diagnosed with pancreatic cancer, and you can sell my company.” And I said, “I love you, Scott, but I don’t do that.” And he said to me, “Yes, you do, kid, you just don’t realize it yet.” And he said, “Think about it! Everyone that you’re marketing to are growing manufacturers, they’re likely buyers of my company.” And so I very reluctantly agreed to take on that project, sold the company in record time, had three offers for him to choose from.

Wow.

And PS, he beat the cancer.

That’s awesome, that’s the best part of the story.

Yep, he beat the cancer he left, he lives in the Carolinas now, and owns a bakery with his wife. The wife said, “Hey, it’s my turn now.” After it was all said and done. So I really didn’t… we did not immediately continue in M&A work, we were the auction time. So this was the 1990s, think about how manufacturing was leaving to Mexico, to China in that time period, we were so busy, had more business than we knew what to do with. But that same thing happens again where a buyer came to us and said, “Hey, I need to sell my company.” In that case, it was a company that had taken on more orders than they had the ability to produce.

Oh, yeah.

Yeah, and so it was a unique problem. And we had to marry them with someone with massive production capability almost instantly, or they would have lost the business. That project we sold… It was a Charleston, South Carolina based company that we sold to a buyer up in Rhode Island. That project was so much fun to work on.

What made it so fun?

Oh, the characters involved.

Okay.

And that’s a whole ‘nother story. But I think at that juncture, I said, “Okay, I really want to do this when I grow up.” And for a very long time, we ran two divisions, both auction and acquisitions. But eventually we grew. The M&A side grew over 400% for three years running.

Year over year?

Yeah.

Wow, okay.

Yeah. And so at that juncture, we just, we closed down the auction division, I refer all my old work to an old competitor in the industry, a friendly competitor and,

That’s great.

Yeah. And so I love what I do, I have an awesome team, we meet the most interesting people. Manufacturing today is so different, the public perception of it, that’s why I love what you’re doing. You’re helping change the perception and that’s a beautiful thing.

Wow! Thank you, because we totally 100% identify with that. And you know, what is going on in manufacturing is amazing, it’s awesome, and if you really think about it, just think of all the amazing technical new evolutions and innovation that have happened, it’s from people taking risks and doing super cool things. You know, people get excited about, “Oh, we have SpaceX and look at Apple, look at…” Okay, well, let’s look what’s kind of going on behind the scenes there. It’s not like it’s, you know… So anyways, I could go on and on, but 100%. So what maybe, I’m kind of curious, I want to go back a little bit even before the auction, how did you get into that?

Okay. That was, I was, I went into that business with my husband at the time who had long since divorced. But his dad was a machinery dealer, so buying and selling used equipment. But when they came across an entire plant for sale, they would refer it to an auctioneer. And my then father-in-law over a Sunday breakfast… “Hey,” he said to my husband at the time and I, “Hey, you kids should do this. This would be a great business for you.” And my husband at the time said, “Dad, you’re crazy,” Got up to go to the bathroom, and I started scheming with my father-in-law about what it would take. And I went to my old boss at the time, I was working for real estate developers, two brothers who had 85 different corporations that I was in charge of at the time.

Wow.

And I went to one of the brothers and said, “I have an idea for a business. I need to borrow $40,000 to start this business.” And I had a business plan, and he said, “Where do I sign?”

That’s awesome.

And I paid him back, in under a year, and just before he passed away.

Oh, wow.

Yeah.

So I’m going to ask you a question that we didn’t talk about on there. Where do you think this entrepreneurial spirit comes from? Because that’s an, you know, I try… here in that story that you know, it was interesting, sort of the different reactions where are saying when your father-in-law at the time proposed that, and you said you instantly started like scheming, I love that. That’s awesome. Where does that come from?

I think, at the time, as I said, I was working for these two real estate developers who were incredible entrepreneurs. And that was my first look at small business. That was my first real look at entrepreneurship. And it was during the time that I worked for them that I realized, I want this for my life.

That’s awesome. And but you know, I think there’s something, I think there’s something inside of an entrepreneur though that yes, you may want it, but I think there’s a, what I see and I hear is there’s this passion, there’s this excitement, that you kind of just naturally gravitate and you just you have, that’s what at least what, that’s what I’m seeing and hearing from over here, so?

I think everybody, every entrepreneur, every true entrepreneur, you’re right, has a little bit of that. We’re a little bit renegade. We don’t like following rules. We like making it up as we go along, making our own rules. And so yeah, I’ve got a little bit of that, I bet you do too.

A little bit, yeah, just a little bit. So we’ve got a little bit of story, obviously some kind of turning points in there, obviously asking questions: “Hey, what about this business,” and then you launch into the whole auctioneering business, and then you have customers that say, “Hey, you should do this.” “Oh, I don’t know, that’s happened a couple times,” and voila, there you go. So, today, we you know, what is… we talked about for that passion that you know, that excitement… when you get out of bed, when you start every day, what… What’s that motivating factor? What’s that piece that’s like, “Yeah, today we’re going to do this”? Like what is that? What’s that drive?

Oh my gosh. Well, last year, I traveled more than 40 weeks out of the year.

Okay, that’s a lot of travel.

I traveled all over the country. I am meeting the most fascinating people, absolutely the most fascinating people in the country. The manufacturing community it’s so incredible, so many different from medical instruments that are changing the way surgeries are done to things that are used in every home in America, to parts that are going up in space. It’s just… It’s absolutely amazing. And I love the travel and meeting people and learning, the same way you ask me, “What sparked this? How in the world did you ever think of this?” Doing that so many times in a year is just, it’s inspiring.

Yeah, absolutely. That’s super cool. You know, it’s just amazing in this space when you just hear even just how niche or niche or whatever how you pronounce it, you know, just and just the smallest detail, there’s a manufacturer for you know, the tool cutting apparatus for cardboard, for cereal manufacturers and like this, this whole supply chain that you, a whole world that you have no idea about, you know, that helps to get my cereal to, but you know, like all these different things, I think it’s just crazy fascinating.

Yep.

So, let’s jump into a little bit more, you know, present day: what are some of the challenges that you’re seeing in the industry right now? Obviously, there’s a lot going on, a lot of transformation is happening. What are some of those challenges you’re seeing?

So one of the biggest challenges that we see, manufacturers are, the ownership is of an age, they’re retiring in record numbers. Everybody talks about the skills gap, right?

Yep.

Which we could do a whole episode just on the skills gap. And now some people just complain about it, and others are actually doing something about it.

Right.

Right, but, so you think about, there’s things like Manufacturing Day, which is awesome, and it’s, you know, a tool to try to inspire young people into the manufacturing industry, a worthy cause, right? But the issue that I see is that the young people being inspired into manufacturing are not at a level yet where they could take over ownership of the companies that, where the founder is retiring.

Yeah.

So what happens in the meantime? One of the strongest categories of buyer right now of manufacturing companies, and this is not me, this is the Market Pulse Report put out by Pepperdine University, tracks my industry quarterly. So for the last several years, almost every quarter, with few exceptions, the largest category beating out private equity and large strategics… are guys leaving corporate America– not necessarily within the manufacturing community, but leaving key positions in corporate America to acquire manufacturing companies. Manufacturing has been the most sought after acquisition, quarter after quarter, again with few exceptions.

Why do you think that is? What are some of the driving forces behind that, you think?

It’s the opportunity for growth. Listen, a lot of people for many years think the stock market is on an artificial high, right? Okay.

Yep, yeah.

So right now it’s hitting…

Record levels.

Records almost every day.

Yeah.

But manufacturing is more solid, it’s a safer investment. And it’s one. So you think about the founder, led companies, the guys that are retiring. Oftentimes the skill set of the people coming in, these guys leaving Corporate America, its sales and marketing, the function most commonly deficient in the founder led companies. So they can come in, add this skill set, business development and with a few small tweaks, they can double, triple, quadruple the size of a company. It’s amazing. But to answer your question, that’s the largest issue I see in manufacturing is, can we get enough of these people with this skill set to buy these companies? Because if you can’t, the entire US economy is going to be affected.

Yeah, exactly.

Right?

Yeah, and so one of the interesting things is, you know, is there particular size of firm that you, like this report was coming from the work with, me I know that most manufacturer, I mean, there’s a ton of them, most of them are fairly small, I think around one to two million each in revenue. Correct me if wrong, I’m sure you probably better on the numbers than I am.

So the report that I referred to segregates what they call “main street.” Main street companies with revenues under two million.

Okay.

And this report isn’t only tracking manufacturing, it’s tracking the mergers and acquisitions community and what’s selling nationally, but not necessarily manufacturing.

Got it, right.

They do track what industry has sold. So then they’re generally from two to five million, they’re putting in another category, and then from five to 50 million.

Okay.

So, even up to 50 million, they’re calling that lower middle market, and it is.

Sure, yes, yeah. I think that’s super interesting, though, that, you know, I would have guessed that it would have been more, you know, PE or, you know, strategic acquisitions rep versus, you know, that corporate, you know, executive who, you know, I just think that’s very, very interesting.

Well, it’s the… those are the three categories of buyers. So of course private equity, large strategics, and then individual buyer. The individual buyer is, in my industry, we call it low-hanging fruit. Finding a private equity or a large strategic, anybody can do that.

Right, yeah.

Anybody, because there’s lists you can buy, there’s things you can do. With that third category of buyer, there is no list you can buy.

Yeah.

You have to create the conditions to be found by them. So this is why marketing, blogging, video for me is incredibly important. It’s next to impossible for someone trying to buy a manufacturing company of a certain size to not end up on my doorstep. And that’s by design.

Yeah.

So what does that mean for my clients? It means that I’m exposing their company to the best and most qualified, and most category of buyer than anybody else in the industry.

Well, that’s awesome. I think you answered my next question, and that was how is your organization, you know, how are you guys really answering that challenge and looking to stay ahead, and I think you just nailed, you know, you just hit the nail on the head right there on how you’re standing out? Because I imagine, yes, that is certainly a huge challenge. How do you find these individuals who are, I mean, that is like trying to find a needle in a haystack. So instead of, so if I understand you correctly, instead of you finding them, they’re seeking you out?

Correct.

Yeah, and then obviously, then you’re making the matches, the matches made in heaven, yeah.

Yeah, but that’s seriously that’s the result of having content up there. We’re educating people. “What does a good manufacturing acquisition look like? What are the danger points? What should you be looking for, Mr. Buyer?” And if you’re doing enough to educate your market, whether you’re an aerospace component manufacturer, or manufacturing business broker, it doesn’t matter what you do, you have to have content out there for your target audience, and the more you provide valuable information to them, the better your business is going to be.

100%, actually, I’ve got a quick question on that. When did you guys start doing that? Was there a was there a light-bulb moment or, you know, what would cause that for you?

Sure, so probably, now, I’m going to say 10 years ago.

Okay.

I started reading books, I’ve been blogging for about 10 years.

Okay.

But how did that start? In reading books, and I don’t know if I should say a book during this…

You can, you are more than welcome to do that, yeah.

First one that I read was a book by David Meerman Scott called “New Rules of PR and Marketing.” And he talked about… and he has had several books since then. I mean I actually last year, a year before I saw him speak in person at a marketing event that I took my entire office to and kept for a few days in Connecticut. But that was the first book I read, and he talks very much about, you can’t just sell, you have to provide information, educational, valuable information to your audience. And if you do that on a consistent basis, you create the conditions for them to find you. Like the start of inbound marketing.

There you go.

Right.

That sounds like a software tool that I’m familiar with.

There you go.

Yeah, well, very, very cool. That’s, now that’s this is great. You know, as we wrap a little bit here, for those who- well, this is a very easy question, very easy answer, I think to my question here, for those who would like to learn more about you. Maybe there’s somebody who’s watching who says, “Hey, I would like to… I’m interested in acquiring a manufacturing company.” What’s the best way to find out about you? I think I know what the answer is, but.

Sure, so our website is AcceleratedMFGBrokers.com. Then you can email me [email protected], or you can call our office 908-387-1000.

Perfect. Well, Fran, I really appreciate the time, I really enjoyed spending some time to get to understand your story, here about that, I loved hearing the stories about how you know, those milestone moments or those “Aha!” Where it’s like, “Oh, maybe we should make a pivot.” And just I really enjoyed also just learning about the industry, and particularly the super interesting fact about the you know, the number one buyer, you know, are going through M&A activity, we’ve not expected that. So, thank you for sharing all your information with our audience.

And thank you for all you’re doing for manufacturing. It’s… Manufacturing companies marketing themselves, it changes the dynamic. So many guys are counting on the sale of their company. They’re tired, but they’re not marketing, and what you’re doing to educate the industry is amazing.

Well, thank you very much. We’re trying to get that message out.

Keep doing it!

We will, thank you very much. Okay, all right, well, listen, I’ve really enjoyed this episode, a lot of great takeaways for me. I hope… I know there’s a couple for you as well. One of the biggest things I thought was super interesting was that the number one buyer who’s, you know, acquiring manufacturing companies are not you know, the private equity groups or even strategic acquisitions from other larger firms, it’s the actual this these corporate executives who are leaving and maybe not even in the manufacturing space, and going and buying. I thought that was super interesting. And also the the takeaway about content and marketing, and how that’s been a big driver for Fran and hope in her business.

So anyways, thank you so much for watching and listening. If you’d like to learn more about them, you can check them out at their website. We’ll make sure that’s in the show notes. And in the link here on the video, you take a look at that. I’ll be back next week with another episode of IndustrialSage. Thanks for watching and listening, and I will see you next week.

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, so next week there’s a great trade show called MODEX, and we’re going to be there. If you remember, we were there two years ago, and then last year we were at ProMat. And we’re going to talk today about why I love MODEX!

Alright, so David is here again. Me, Danny. Awesome. We’re super excited about it. So we have MODEX coming up next week. And this is from the association MHI, so Material Handling Institute puts on MODEX, the sister show of ProMat. So they alternate every two years. And so they do Atlanta, and then the following year it’s ProMat in Chicago and then back to Atlanta. So we went two years ago when it was here in Atlanta just to kind of go check it out and do some interviews and just talk to some people, and it was awesome. It was really… We’ve been to several trade shows, but this was really cool for a couple reasons. And I know that I’m just super excited to go back.

I think a lot of people get a bad rep or manufacturing in particular kind of gets a little bit of a bad rep, or trade shows. And I think it’s one of the reasons why the workforce development issue, the labor issues, the people, the younger generation doesn’t want to work there, because they feel like, “Oh, it’s grimy.” I want to go work in a tech space, and somewhere innovative, and all that good stuff.” And I think there’s a major, not “I think,” there is a major gap in that thought process, because when you go to a show like MODEX or ProMat it’s innovation galore. It’s amazing. It’s really cool. I have a, really, a deep new appreciation for material handling space after going to the show, because what it really is, it’s all material handling, supply chain, and a lot of automation and robotics. And the space is like, blowing up!

And when you think about it, why is it blowing up? Why is there so much innovation? Well, there’s this company called Amazon. It’s not because all of Amazon, right? But there’s a lot that has to do with it, and it’s… when we want to buy our things that we expect it super fast. Maybe as fast as an hour from now. We pull out a phone, we go on a thing, and boom, and in as early as an hour you could have your stuff at your door. That’s pretty cool. Well, people are completely ignorant of the fact of what actually happens behind the scenes to make that thing happen. How do you get this cup made, manufactured somewhere, actually on your doorstep, is an incredible process. All the way from gathering the raw goods, to transporting them to a distribution facility, then it’s going to a manufacturing plant, then it’s actually processed, and then it’s going out to another plant, then it’s going to a retail location, and then, or an Uber, or if someone, here, delivers it to you. There’s this whole lifecycle and that has gotten shorter and shorter and shorter and shorter and shorter, because we want things better, faster, cheaper.

And this show is really, I think, this peak of innovation that is happening to be able to make those dreams a reality. And what do I mean specifically by that? Like… you see… Well one of the things a lot of AGV, so Automatic Guided Vehicles, which is something that we’ve learned of the last several years. For, in layman’s terms, robots. And AMRs right? But like, robots: moving around by themselves, picking up things, and doing… It’s really cool. And it’s helping to process things faster. Or picking and sorting. So they’ve got… Last year at ProMat we talked with Bastian Solutions. They had this really cool new shuttle system. So typically, the way that things would work is, if you’ve got a bunch of, I don’t know, a bunch of cups or a bunch of things like this in a warehouse, and when you’ve got to go pick these things, you’ve got to go get these things out and put it into an order, you know, traditionally somebody would go, walk, and go, “Alright, here’s my pick list. Alright, I need to get this cup, here’s the cup.” And we put it in, then we’ve got to package it.

Well, that’s great, except when you need to like ship 40,000 of these to 40,000 different people. That gets a little complex. So one of the solutions they have is, they’ve got these racking storage systems where essentially these robots on tracks, or self-guiding them to know where they need to go. And then this robotic arm will come up, pick up this thing almost like those little, you know those little vending game machines that our kids always try to get us to do, the pick little crane game?

The one where you can NEVER win the prize!?

The one that you can never win the prize, that one! Except now you win the prize.

Hey!

42,000 times over! It’s exciting. So this robot arm will come up and, instead of being on a traditional system, or a rack system where it’s got to go up and then over, this would just have one lane, and then the arm could go up, like, to three shelves, pick up something, or two, or one, or underneath and below. And then the other cool thing is this thing would take itself down to the rack and then drive itself off the grid, and go to another sorting area or packaging area. Stuff like that. I mean it’s really amazing. I know this year we’re going to be talking with a lot of different companies.

Yeah so, with that, we have a handful of interviews set up, and I’ve been talking with a lot of these organizations. And the technology that they’re bringing and releasing, I mean, I’m hearing from organizations the the conveyor belt systems, the AGVs, these forklifts, batteries that last forever- “forever…” What else? There’s this exoskeleton that can help lift 1000 pounds. When normally it takes four men to do, this skeleton robot that you stand in can lift things up. For all intents and purposes, there’s some amazing technology innovation in this field, it’s very exciting.

Absolutely, yeah I know. And it’s very neat to see all these solutions. And you want to talk about technology and people are like, “Oh well,” get into the workforce labor issue. “Oh, well I want to go work in a tech company, in Silicon Valley.” Are you kidding me? The amount of tech innovation, it’s ridiculous. I mean we’re talking about companies that are saying, “Oh, here’s our machine learning and AI,” and it’s an actual true like, AI! “We have the foremost expert on this who’s helping to develop this sorting or this picking technology.” Or, just all kinds of things. So it’s just super inspiring.

Yep. And there’s even things there that you don’t necessarily think of when you think industrial. Just all the different facets. The little pieces and elements that are really behind the scenes and often forgotten. I mean, safety. Massively important.

Yes. Yep.

How the transportation, things that get beyond the cool tech, this is just practical. And innovation that’s coming out from things that are typically practical and forgotten is actually really exciting.

Yeah, no, absolutely. And one of the reasons why I’m very excited to go see, we’re going to be talking to a lot of different companies again this year, a lot more than we did last year and the year before, combined. More on this later. And it’s just… What I would really love, and I wish that there was a way, maybe we should figure this out, but I think that more younger people need to see this, I think that would be a huge thing, and I think that’s part of what I’m hoping that we can do here a little bit, is because I think that that’s something that’s really going to help to inspire the younger generations to say, “Wow, that’s amazing.”

I’ve actually, I mean, I have some brothers-in-law. Did I say that right? Brothers-in-law, so a couple… They’re very, my father-in-law, big engineering minds. He is an electrical engineer and he does some really cool stuff. And my brothers-in-law, same thing. And I was telling about the show and everything and they were like, “What, what, really? Like, you mean they have like robots, and they’re doing this?” I’m like, “Yeah, you guys should totally come.” And they’re in college and I’m thinking, “They’re going through this in school and they’re learning but, like, they need to be exposed to this.” And younger! In high school, in middle school, exposed to what is going on and yeah.

There’s even on our news, we’re trying to release news out in the industry, and that’s what we’re seeing more and more. Manufacturing Day, that happens every year. It’s kind of had its life of its own now where there’s literally a quarter million youth that are involved in some form or fashion of a Manufacturing Day. A lot of different organizations within the STEM field. So, trying to get girls involved in engineering and those fields. So there’s a lot of activity that’s happening, and that’s part of the great thing about the IndustrialSage platform, is getting that message out there and building a community to help us. So we look at MODEX, ProMat, super exciting shows where we can see in reality the innovation, the technology, see the people and what they’re doing to, like you said, the Amazon effect, build that out. But… that’s why I’m excited. This is my first time I’m going to go, I can’t wait to see everything.

Dude, you’re going to love it. It’s going to be awesome. It’s really going to be awesome. So to wrap up the MODEX love fest here, this is going to be awesome. So next week will be at MODEX and we are going to be talking with a ton of companies. So, what I want you to do is I want you to go follow us on all of our social media channels. Primarily LinkedIn, but we’ll be on LinkedIn and Twitter and Facebook and Instagram, and we’re going to be reporting and talking to all these different companies, and you’re going to see some other innovations.

So, follow us on social media, next week. Really that Monday, Tuesday, Wednesday primarily, we’re going to be out there, on the streets, talking to all these different companies, sharing the innovations and things they’re going to be doing. And then you’ll see more stories of them kind of trickle out over the next several weeks. But if you kind of want to be part of that, if you can’t actually be here in Atlanta for that, follow us on social media, jump into the conversation, take a look at it, share these really cool innovations that are going to be going on. Share these with the younger generation. Share these with your nephew, or your niece, or whoever, your kids, who they need to see this really cool stuff that’s going on. Help us get that out there.

So, that would be awesome. Listen, that’s all I’ve got for today. Thanks so much for watching, and we’ll be back next week with another episode of 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, so, let’s jump in today’s episode. I have Lydia Di Liello, who is the CEO and founder of Capital Pricing Consultants. Lydia, thank you so much for joining me today on IndustrialSage.

Thanks for having me Danny. I’m looking forward to the conversation.

I’m looking forward to it as well. So, for those who aren’t familiar with you and Capital Pricing Consultants, can you just give us a little bit of a high level overview of who you are and what you do?

All right. So, as you said, Lydia Di Liello, I have owned Capital Pricing Consultants for the last five years. I have been in the revenue management and pricing sector for the last 25 years. So, I spent my time as an executive for most of that time, working in the space and then decided to go out on my own to really help other companies relative to the size of pricing and making money on sustaining profit.

So, it’s interesting. So, the science of pricing is– Well, there’s obviously a whole psychology and, as you mentioned, science. It’s very interesting. So, I’m excited to kind of dive into that in a little bit, but before we get into that, I’d like to know a little bit more about you, about your story, your journey. So, you said you started the business, but take me back. How did you get into this space? What did that first job look like? Tell me those details. I want to hear some stories.

So, my story’s a little odd, Danny, in that I had graduated with my MBA, just coming out of school. So, I’m from the North East, Cleveland area, and General Motors, 25 years ago, was a huge employer. They actually had a lottery. In our town, if you worked for General Motors, you got a lottery ticket, and if you were chosen, you could appoint anyone you wanted who could pass the drug screening and the interview to come and work for General Motors. My brother-in-law hit the lottery, as they say.

So, I went in, but the caveat was you had to work on the line second shift. I’m not much of a second shift kind of girl, but I survived it. Worked nine months actually on the line making harnesses for General Motors, and it was a wonderful learning experience. But, after nine months, I was able to post for any jobs that were in the office. So, I posted for absolutely everything in sight because I wanted off second shifts. Going to work at three and finishing at one in the morning, just not really my style. So, by chance, I started working in competitive intelligence in the GM offices. At that point, we were part of Packard Electric, one of their divisions. We really from that point, my career grew within General Motors up through the Head of Pricing for that division for Packard Electric, and then after 11 years and we actually wrote software as part of the role. I was with them for 10 years.

I often joke that if I had only trademarked that software then, I’d be on a little island somewhere now, because a lot of the concepts that another pricing person and myself wrote are being used today, relative to conceptually what was important and how to manage prices. So, that was successful. From there, I spent one year on the dark side relative to– I went into supply chain management. So, I always joke with pricing people, I went to the dark side, and with the supply chain people, I tell them, I spent 10 years on the other dark side, but it’s a lot of fun because you see both sides of the table, right? You learn what each group needs and wants.

Absolutely.

From there then, I was quartered away to create a pricing department ground up for a custom plastics company. Spent nine years there at the executive level and then transitioned out and decided to go out on my own. So, kind of an unusual start to what’s been a wonderful career and a really interesting career opportunity.

That’s super interesting about the very beginning with the lottery piece and coming in and doing that. So, throughout your career, is there somebody that stands out as far as who really helped you out in that journey or a key milestone moment or moments? What jumps out to you?

So, the person that probably helped me the most was one of my first bosses. She was excellent about always telling me, when you look at data, don’t just believe the data, does this make logical sense to you? She would always talk about gut checking. So, I would say she was very foundational, because today, so much of what we do is data driven. But, I think in some sections we have forgotten Danny how to gut check, how to look at– is this logical based on everything else we know about this data? How does this make sense in reference to our business? So, that’s a skill that she taught me early on that I’m grateful for. Her name is Kim. We still are friends today. To this day, if I run into something data related that just doesn’t make sense to me, I’ll call her and say, this isn’t lining up, the data says X, I believe Y, where’s my disconnect? I try to share that with my clients and really help them through those challenges because our world revolves on data now.

Yeah. Sorry, yeah, keep going. This is great.

And then, I would say that the other pivotal moment for me was certainly moving into procurement. Being in professional procurement for a year was absolutely pivotal for my career and for my learning experiences, understanding what that other side looked like and how procurement thought and what they needed and why they acted the way that they did. It was a turning point in my career because then, I began to be able to teach negotiation to those in my organization. I took our executives at that time at the plastics company through training as well, and was the lead negotiator with all of our key customers. So, I found myself having multiple jobs as a result of that, but I really enjoy it.

That’s awesome. Well, now that I think, there’s definitely something in the whole gut checking piece with the data and I think that’s awesome. That’s a great story. You said that was one of your earlier bosses on there. I think it’s so true, especially now. You mentioned, we are so data driven, you talk about it or we hear about it all the time. We’re talking about all this digital transformation, big data, cloud. The fact that manufacturing in the industrial space is the largest data prolific industry. Because there’s so many things and you can measure everything, but it’s interesting. It’s like a pendulum, I guess. You’re like, “Okay, maybe things weren’t measured and we weren’t looking at stuff before.” Now, everything can be measured and you can just go like way over here. So, I think to your point, anchoring that– logically, does this make sense? I mean, yeah, sure, the numbers may tell us something else and it may be the truth. Okay, let’s go discover that. Let’s go probe into it a little bit deeper. But, I think it’s fascinating.

I think it also speaks, Danny, to the… So many companies are afraid that they’re not measuring enough, so they measure everything. But, the everything is then completely useless because they’re paralyzed by trying to analyze everything that’s going on, instead of saying, what helps me run my business? What information would allow me to make better decisions more quickly? Be more market sensitive, more market effective? Instead of just broad brushing, let me have 10 pieces of paper full of reports, none of which do I look at or understand. I find that consistently with all of my clients, whether they’re Fortune 500 or mom and pop, they’re not getting the information they need, but they’re getting reams of data.

No lack of data. That makes a lot of sense. I’m guilty as charged as well for that. It’s exciting and it’s fun, but yeah, you can get easily overwhelmed and inundated, and then you’re like, “What is all of this?” We’re collecting the data, but, okay, what are you doing with it and what is it telling me? We need key information. So, I really like that. And the whole procurement piece obviously, being able to see on the other side the whole… So, you’re the key negotiator there, I think that’s pretty cool. So, as far as now. So, let’s say you had maybe the traditional, maybe not traditional career course, I’ll still call it traditional, but you made a decision at a certain point to go out and say, “Hey, listen, I want to start this organization, I want to start Capital Pricing Consultants.” Tell me, what were those moments when you maybe had that first thought in your head to, “I’m actually doing it?”

So, I had a boss when I worked at the plastics company. The owner, Bernie, was very influential in my decision. He had founded Automated Packaging Systems and as an owner, he would often come to me and talk about the profitability and where we needed to be and how we looked according to goals, etc. So, we would have these very deep conversations relative to what makes a business work and why. I remember him saying to me one day, “Yeah, you’re going to own your own business.” I said, “Na, I don’t think I want all this, Bernie. I see you walking the halls all the time and you’re, on a daily basis, ‘Where are we at with the numbers? Where are we at with the numbers?’ I thought, I don’t know that I really want to be there.”

And then, the more I was exposed to how a business evolves and the kinds of decisions that we were making, that was allowing the company to grow so quickly and profitably, and then seeing other companies that were just getting it all wrong, I really started to have a desire to go out and say, there’s a way to do this, and there’s a way to focus on pricing, which so many people do as an afterthought. They design the products, they worry about the market, they take care of absolutely everything, Danny, and then they go out into the market, and they say, “Oh wait, yeah, we’ve got to put a price on this thing.”

Yeah.

Well, to me, that’s completely backwards. We need to be starting with pricing from day one, to say, what’s the market willing to pay for this? I don’t know if you remember the rocks? The pet rocks from 30 years ago, right? People were paying three bucks for a rock with a smile on it, right? So, those people clearly understood pricing very, very well. So, that was really pivotal when Bernie said to me, “You’re going to own your own business.” I thought, I don’t know about this and it wasn’t six months later that I was really seriously thinking about how could I do this and what would my next steps be?

That’s awesome. So you decide now, “Okay, I’m doing this,” and you make that jump. What was that first day? What was that first day like?

I was a little stunned. Because, you get out and you think, “Okay, I’m out, now what? How do I reach out to potential clients? How do I talk to my target markets? How do I get my message across in a meaningful way?” So, that first day was a little nerve-racking and there were a lot of days after that of you do a lot of prep work. I’m sure it’s the same for you Danny, all of the behind the scenes that has to be done, for them, the same in front of the camera, it’s the same thing with consulting, the same thing starting a business. You spend hours and hours and hours that nobody sees for the 30 minutes that you spend finally when you get a chance to get in front of a client.

Exactly, yeah.

So, there was a lot of nervous energy I’ll say around it starting.

That’s all part of it. It’s all part of the journey and I think it’s exciting and what you explain is something that I hear constantly and can obviously identify myself with. But, also, there’s that little bit of trepidation, little bit of fear, little bit of anxiety, but there’s also a lot of excitement and there’s a lot of passion and there’s a lot of exploration and discovery which is really exciting.

That’s a perfect way to put it. Absolutely.

So, all right, well, let’s move on a little bit now. So, you talked about, one of the reasons why you decided to start the company. So, you saw a lot of challenges and you started building this desire to be able to help these companies and say, listen, I think some of the things we’re doing here are a little bit wrong. Relative to some of the challenges that you’re seeing in the industry right now, I imagine that some of those may be the same, I know there’s new challenges on the horizon. What are you seeing? What are some of those top challenges right now?

So, the first is, I would say that for long established companies, in the industrial and manufacturing sectors, we have a little bit of a historical challenge, relative to– It’s that everything old is new again. So, all of these old, and we’re back to data again, data systems, these old ERP systems, nobody wants to touch them, because they cost– they’re a huge investment to address. Once you start to undo them, you don’t know what’s going to fall apart and I think that that’s a legitimate concern of every business owner. It’s sort of like, “We’ve got duct tape and super glue on it, leave it alone please, let me get another year out of it!” Right?

So, I see that the data systems that are being utilized are archaic, they desperately need changed out. I am not a proponent of saying, just put software, that’ll fix everything. That is not my motto. However, if you fix the strategy, and I would say that’s the second thing. So, the first problem is, is archaic systems to manage your data. Well, I’ve heard it 100 times. “We can’t run that report.” “Well, why not?” “Well, because this data sits in this system, and this data sits in that system,” and nobody wants to spend the million plus to pull it all together. Which is legitimate. But, there have to be better ways to get your data to run your business.

The second thing I see is, businesses have forgotten about hierarchical strategy about doing an overall strategy that says, what’s my business goals for this year? What are my business goals five years out? And then, how do we work those down into our functional departments? So, the first thing I do with pricing is to look and just say, what’s your corporate strategy? Whether you’re a mom and pop or you’re a Fortune 50. And then, how does that corporate strategy trickle down to each department? When you interview each cross functional department, Danny, what you find out is, they all interpret that strategy differently. So, you’ve got this going on from the very beginning and I would say that continues to be a challenge for companies regardless of size. Those are the two most critical challenges that I see.

Yeah, that makes a lot of sense. I totally understand the whole data piece. Yeah, these are systems that have been built on top of being built, on top of being built, on top of being built, so yeah, the whole duct tape and super glue, perfect analogy and it’s great. Yeah, you don’t know. You just start pulling one piece and what’s going to happen is, does the bottom fall out or what? Totally get that. And then, the whole strategy piece, I love the… Well, you were talking about, you had talked to different leaders or different departmental managers and yeah, you start getting the, “Well, this is, we’re doing this,” or, “No, we’re actually doing that.” So, that’s a huge issue as far as where’s the ship going.

Exactly.

As far as the industry as a whole, what other areas relative to… I guess, let’s get into the pricing piece a little bit. You mentioned earlier on is that, do you think that pricing should be, at the beginning versus the end? When you go to a lot of product development, one of the obviously big pitfalls is that… It’s the thing we talked about with data, is that, just because you can do it, doesn’t necessarily mean you should. There’s a huge tendency to be like, “This is super cool, we can make this product or this widget and it’s amazing,” but is there a market for it? You’re suggesting we start with price. Walk me through that.

So, the first approach I take with clients is to say, have you done any market studies? Have you done any voice of the customer? When you’ve gone to the customer and you said, “Here’s what we’re thinking about doing,” what kind of responses are you getting back? Have you included conversations relative to, “So what would you pay for this? So, I’ve got this great widget, I’ve got this idea, we think it will help you in the following ways.” And then when you get to the discussion about the price, if the customer tells you, “Yeah, I don’t want to pay any more than I’m paying today,” and you know that your cost, your approximate cost to develop it is two times what they’re paying today, then you’re done really before you start. Now, I fully expect that there aren’t any customers in the world who can’t wait to tell you, Danny, that they want to pay more. I’m one of them. If you ask me what the price is, I’m notorious for telling you it’s too high.

Well, you’re a negotiator, so that’s part and parcel.

Exactly. So, I always take that 20% to 25% what I call fake or fudge factor in there. But again, when you’re looking at development costs that are two or three times, you know going in that that’s not going to be a viable business model. So, really, I make it sound very, very simplistic, but honestly, getting down to those three pieces of information, what does your customer want? What value are you bringing with this device to them? Because it may be a value they don’t yet know they need or want, but you have to define the value. If you can’t define it, then we can’t expect the market to accept it. I see products fail constantly because they met the needs and the passion of the developers. There’s some great minds out there that can make all kinds of things. The challenge is the marketplace may not care, and certainly may not be willing to pay for it.

Right. Absolutely. No, that makes all the sense in the world. You’ve got my wheels turning. It’s very good. Let’s talk about a little bit with that, kind of moving forward with industry challenges in that space. We were talking a little bit before we started rolling, a little bit about the impact of the tariffs. Obviously, that’s making big headlines, obviously major impacts to the business. Actually, we were talking about, “Hey, we’ve got to be careful how we approach this because maybe this episode that we’re going to release later, we want to make sure it’s timely,” and you said, “No, that’s a very big misconception.” Let’s talk about that. You identified a big challenge that you said a lot of manufacturers… maybe they’re misunderstanding.

So, the biggest pitfall that I see, Danny, is last year, so many of my clients, when the tariffs first came out, they said, “Well, we don’t think this is going to last. This is all political and it’s going to be some back and forth and we’re just going to wait it out.” That is the biggest misconception and the biggest mistake anyone can possibly make. While we’re waiting around, our companies are bleeding cash. Everyone of my clients that waited and said, we’ll take price later, lost all that profitability that they could’ve had in Q1 and Q2, all through last year and it makes it harder to catch up the longer you wait.

If you go back to the market immediately and you say- and you communicate clearly with the tariffs- “You’ve seen the headlines, this is how it impacts us as a business, here’s the percentage we are going to transparently pass onto you…” because I am not a proponent of trying to capitalize on the tariffs and make additional profit. I don’t think that’s realistic in this climate and given the amount of the tariffs. So, my council has been to my clients, pass it through transparently, let your customer base see what that impact has been to your business. So, if you’re paying 30% increase, let your customers know and pass it straight through.

Now, supposedly, we’re supposed to see 75 billion dollars in goods from China being repealed. But, the supposed is that China spends 200 billion with the US in the next two years as well as a caveat about how much they spend in agricultural products. So, I think this is going to be an ongoing story with bits and pieces along this roadmap, but I don’t see it Danny, as coming to a close, and in the meantime, while all of this conversation is going on, people are still losing money, because they haven’t gone back and said, “I need to adjust for this.” Many of the companies that I’ve seen have lost seven margin points. Not percent, but margin points.

Wow.

You can’t do that very long before you close the doors. So, I am really passionate about getting out in front of these tariffs and educating clients and the marketplace as well.

Yeah, absolutely. I mean, that makes a lot of sense. Obviously there’s a huge level of uncertainty still out there. I mean, you’ve got a lot of– you throw politics in there. I mean, there’s a big cloud of unknown out there, which certainly, more than certainly are playing into it. To your point, yeah, the game is not over. You’ve got to make those adjustments. You’ve got to make those adjustments. Man, you’re talking about a seven point impact on margin. That’s huge. So, as far as your organization, how are you helping your clients? I know you’re kind of sharing this now with some of your council, but as far as staying ahead of the curve and helping your clients stay ahead of the curve and really make these adjustments, how are you guys doing that?

So, the first one really is kind of going back to what we talked about earlier on which is looking at overall strategy. What is their strategic plan relative to dealing with the tariffs? So that it is proactive rather than reactive. We know this is going to be a business condition going forward. To what degree it impacts us, we don’t know. One thing’s for sure, Danny, nobody ever complained about making too much profit. So, if we plan that this is going to last through all of 2020, and if there’s a company we plan the impacts to our organization is going to be, let’s say 15.8%, if it turns out that part of that gets repealed half way through the year, and as a result, we make another 3% or 4% in margin, all the better, right? We’re on the right side of the equation.

So, I really start with a strategy, because it’s a very different way of looking at it. Most clients and most business people, it’s knee jerk, it’s reactive. “What am I going to do about this? How do I fix this?” Well, it’s not one action, it’s a plan and it’s time-consuming, which I think is a big challenge for all of our manufacturing and industrial businesses. Whether you’re independent or whether you’re publicly traded, the commitment of time that this takes is significant. So, it’s really strategy, a commitment to time and an understanding that that’s part of this. Right? You can’t just make a decision, all right I’m done, make this go away, it’s a pain in the neck. We’d all like to, but that’s not reality. That’s not going to preserve or increase profitability.

That makes a lot of sense. I think it’s precisely why it is a problem, as you mentioned, is the time piece. The strategy takes time, especially in today’s climate where it’s, we’ve got to get things– the climate has not changed I don’t think in decades and decades, but better faster, cheaper, right? We’ve got to go, we’ve got to get things out there and efficiency. So, this whole strategy thing, uh, we’ve got to focus on getting these widgets out better so it’s really focusing on that short term piece, looking down like this, versus saying, we need to stop and look up and look out and say, “Oh, there’s an army approaching us, we should probably do something.” Or we’re driving the boat: “There’s the rocks, we need to move this way.”

It’s very tactical. That’s a great analogy. Everybody’s so busy looking down at the next tactical step to take. They’re missing the thing that’s going to cause them tremendous impact negatively, that’s two months out kind of thing.

Yep, exactly. Well, Lydia, I’ve really enjoyed our conversation. It’s been really interesting. I really, really enjoyed hearing your story, how you started. I have several different takeaways from this. But, for those who would like to learn more about you, have some questions, what’s the best way of reaching you?

So, they can reach me either through my email, which is [email protected]. They can also reach me through my mobile, which is 330-283-5273.

All right, Lydia, thank you so much. I appreciate it.

Thank you Danny.

All right. All right. Another great episode here at IndustrialSage. I really enjoyed it. I think just some really great stories from Lydia. I always love hearing how entrepreneurs, the stories on how they get started and I think there’s several takeaways. One of them that I had was, there’s so much data, there’s so much going on, there’s so much that we can measure and just because we can’t measure, doesn’t necessarily mean that we should and then you can get super inundated or generate a report and you look at the numbers and you say, “Wow, I had no idea this was right.” But, in your gut, you kind of feel like, “Yeah.” You need to do that gut check. I think that is awesome. I love that and I’ve definitely personally experienced that. That’s a great takeaway.

Another piece is, Lydia was talking about some really big challenges in terms of having your data accessible, making sure that you are looking to put in those proper investments, which maybe if you backup and write that into part of your strategy, which is a big challenge, of not spending that time and sitting down and coming up with a strategy and forward thinking, because the reality of it is, the way that businesses is changing, you need to have these systems in place so you can run those reports and you can see what’s going on and you have to have a strategy to be able to look at things, so you can address things like the tariffs and other challenges that are coming up down the road. So, anyways, I really, really loved the story. Hopefully there’s a couple of things that you took away from it. Certainly, if you have questions, check out Capital Pricing Consultants. We’ll have their contact information in the show notes below.

Thank you so much for watching or listening. We’d love a review. If you’re checking this out on Facebook, or LinkedIn or if you’re listening on any of the podcasting stations, if you’re not on our email list, we can send you all this content on a weekly basis and then some. Go to IndustrialSage.com and we can send you these emails with all this great information on a weekly basis. That’s all I’ve got for you today. Thank you so much for watching. I’ll be back next week with another episode of IndustrialSage.

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