Brian Erickson:
Thanks for joining the Cardwell Beach Marketing Podcast. My name is Brian Erickson, Chief Strategy Officer and partner at Cardwell Beach. In this series, we’re interviewing senior marketers across industries to develop perspective on what marketing will look like in a post COVID-19 world. Today’s guest is Barry Breede, the Chief Marketing Officer at Koppers, a national manufacturer and distributor of utility poles and other treated lumber products and the author of “Transforming the Utility Pole.” Barry, thanks so much for joining us today.
Barry Breede:
You bet, Brian, glad to be here.
Brian Erickson:
All right. So Barry, your firm specializes in equipment that’s vital for critical infrastructure. How has COVID-19 changed the way you reach out to utility companies, local governments and other clients? I’m sure it’s been quite the adventure.
Barry Breede:
Yeah, it has been an adventure just like I’m sure it is for most folks in the business world. We’ve certainly felt the effect. I will say the effect that we felt is a little bit maybe different than others in the sense that first of all, we’re categorized or our industry is categorized as an essential business by the government. That gives us the positive, if you will, of being able to stay in business from an operational standpoint during a time when other businesses perhaps have not been able to receive that designation.
The other thing I would say is that, the utility pole industry in general is not something that performs erratically in terms of demand. It tends to be a pretty stable industry year in and year out. And I would think as even as consumers, it’s rare that you would see a big push for utility poles in your neighborhood or in your city.Generally they’re put in when they’re needed to be replaced or when there’s new construction that takes place in an area.
So the organic growth rate for our industry is pretty solid I would say year over year, and that means that from a revenue standpoint, right now, we’ve pretty much held our own as it relates to where we expected to be. We haven’t seen a significant fall off because utilities still need to do what they need to do. One thing now that we have seen because of COVID is that the work crews that would be out generally en masse have in some cases been pulled back for safety purposes, that’s resulted in a little less demand in some pockets of the country. But overall I’d say, our business has held up well.
The other big challenge that we face, and again, I think others certainly have the same issue is our ability to reach out to attract new customers. We’re in an environment right now where our customer base, our utility customer base just doesn’t allow us to even get into the offices to have face-to-face conversations with them. So we’re really relying on other marketing tactics, et cetera, to try to stay engaged with them. But new customer acquisition is a challenge in this particular, I think point in time.
Brian Erickson:
Yeah. And I think everybody is certainly adapting to what in many cases is a radically different sort of sales and marketing approach. And talk to me a little bit about the contents of “Transforming the Utility Pole,” because I think that’s a fascinating topic to write a book on. I’m always very interested on things that might from the outside seem mundane, but are fascinating once you dig into them.
Barry Breede:
Yeah. Well, there’s probably nothing more mundane than a utility pole, I must tell you. I always figured if you could write a book about a pole, then you could probably write on just about any topic. And there’s also probably no other industry that’s as commoditized in terms of its product than a utility pole. I mean, obviously, if you look at one pole, it’s pretty hard to differentiate it from another. Well, the intent of the book really was to go beyond really the utility pole industry and just deal with commodity products, especially commodity products, I would say, sold in a small to medium sized business environment where it’s difficult to create that differentiation other than to rely on price as a differentiator.
So how do you get beyond price as the primary component of your product mix or your product offering, and where I focused most of my writing in the book was on the innovation concept and how do you use innovation especially in, as I say, smaller and medium-sized businesses to really drive differentiation. And for us that meant developing services that could compliment the purchase and the installation of a utility pole that would create differentiation for us in the marketplace. So adding scenarios for disposal of utility poles and bringing new environmentally friendly ways of doing that into the market or adding new technologies for inspecting utility poles, using RFID technology, all of these things kind of emanated out of an innovation process. And the book just kind of tries to show the importance of embedding innovation in your organization and tying it to your business strategy in a way that makes sense.
Brian Erickson:
In certain ways I think something like a utility pole is actually the most pure form of marketing and innovation there is, as you say, right? I mean, there’s very little inherent product differentiation so it’s all around how you identify the core customer need and build out from there so that’s pretty awesome.
Barry Breede:
Yeah, very much so. I mean, again, what I’ve touched on the book and there’s many ways that you can go about this, but usually small and medium-sized businesses are somewhat hamstrung by the available resources they’ve got to devote to innovation, try to just offer a few techniques that we’ve used that have proven to be pretty successful in the innovation process and especially as it relates to incorporating future trends into your thought process for how to drive some of that differentiation.
Brian Erickson:
So, in the spirit of innovation and differentiation, I actually have been thinking about this since 2014, did a presentation around B2B, selling online and e-commerce and utility poles were part of that presentation, believe it or not. How have you adjusted your marketing strategy to reflect the growth of direct sales platforms like Alibaba and Amazon and in certain business-to-business scenarios that allow companies to sell infrastructure supplies directly online? Has this been something that’s increased for you guys?
Barry Breede:
I don’t know that it really has because our product generally speaking in our sales process don’t really lend itself real well to a more general online offering like an Amazon or an Alibaba or things like that. We’re dealing obviously in a B2B scenario and we generally work with customers where we have longer-term multi-year contracts in place. So, within those contracts, there’s kind of an agreed-to volume of demand they will take as a result, just tend to fulfill that demand. Now what’s changed I think has been, as I said earlier, we don’t have the ability for salespeople to really get out and address customers face-to-face so we’ve had to find ways to engage other than the face-to-face methodology. And we’ve had to rely more on electronic documentation just in the transactions themselves than we would have in the past. In terms of pure online I don’t think we’ve seen that scenario, certainly not as much as what you see in the B2C environment where it’s been phenomenal in my view, the changeover that’s gone on from retail to B2C type purchasing.
Brian Erickson:
Do you think we’ll ever see people purchasing a utility pole online in a B2G or B2B sort of scenario?
Barry Breede:
It’s possible, I don’t think that the large volume customers that we would deal with would probably move in that direction for a lot of reasons, security being one of them. They tend to work within their own platforms, even for our purchases and so everything is tightly secure and I can’t imagine them quite frankly going to a third party to undertake those types of transactions. Now, for smaller customers, smaller utilities, there may be a way to construct a portal of a sort that’s specific to the utility pole industry or related products. You could possibly see an uptick in volume from those folks because they tend to be more, what I would guess I would term, spot buyers of material, as opposed to the larger utilities that are really, have preplanned construction projects and volume commitments for those projects in terms of poles. So they know going in what they need to buy, and they expect us to kind of respond accordingly.
Brian Erickson:
Interesting to see that take shape potentially over the next couple of years. Looking forward, refocusing around post-COVID and what’s going to happen, I think it’s fantastic that you’ve been able to keep the lights on as a critical business. For industries that supply us with critical infrastructure, do you anticipate a return to pre-COVID reality or will there be a new normal that incorporates some marketing lessons that you’ve learned from the pandemic? What does that look like?
Barry Breede:
The optimistic side of me would like to think that we’re going to return to a pre-COVID era and everything will just go back to the way it was. My gut tells me as a marketer at least that we’re going to see some fairly fundamental changes at least in the near term once we hopefully get through this scenario that could sustain themselves for a while. And kind of in my head, I kind of think it might be maybe two or three areas where marketing focus may be altered rather dramatically. I would say first, we might call this the concept of assurance marketing, and that’s really just wanting to communicate the stability of your business in a way that gives your customers assurance that you got staying power, that you’re going to be around. And for us, that really started with our supply chain, which thankfully is domestically sourced and not based overseas.
So, we initially had some concerns just because of all the noise in the market in general, from our customers that maybe we weren’t going to be able to get product to them. And so we had to give them comfort that our supply chain was in a good position, that we were going to be able to deliver what they wanted when they wanted it. Then we had to kind of assure them that we were going to deliver this or we were going to operate, I guess I should say, in a manner that would ensure the safety of their employees and our employees. So we see that now I think across just about every industry whether it’s use of social distancing or mask or sanitizers and paperless transactions and all that stuff, that’s all been incorporated into our business process and I think is kind of an underlying marketing theme almost that says A, you can get the product when you need it, and B, we’re going to deliver it in a way that recognizes what your needs are in terms of employee safety.
I’d say the second thing maybe that might come out of all this too is, we’re really more focused, I guess I would say, right now on our most loyal customers, making sure that they don’t consider switching during this time period. And that, as I said earlier, really means we spend less time, maybe this is wrong, I’m not sure but, on new customer acquisition. And instead we’re just trying to create more personal relationships with the people that we know. This is becoming for us a real challenge with the work from home trend that continues on. And if that’s sustains itself, how do you reach a B2B audience that’s more geographically dispersed than ever, more likely not to keep traditional work hours even?
So we’ve been working a lot on webinar content and webinar usage seems to be off the charts right now. We’ve worked a lot on social media as a big part of our effort right now and again, trying to personalize that a bit more, but things that we think we can use to really engage the customer base that we have. And then I guess the last thing that I would think could carry forward out of the pandemic from a marketing standpoint is maybe more of a thought process about how you’re going to present yourself as, I don’t know if an ambassadorship is the right word, but some kind of a do-good scenario that you’re creating in society.
So looking a little deeper at where your business fits in society. Right now we see that in mass market advertising with this, “we’re all in this together” kind of mantra that’s out there. We’re trying in our own world to create a scenario like that or scenarios like that. We’ve got a program now called Hometown Heroes that focuses on rural utilities and allows them to kind of nominate people that they think in their particular business have really kind of gone the extra mile during this pandemic. And I can see us continuing to, as an underlying part of our marketing, to really try to continue to keep that type of message. It may not be the same message, but that type of message part of what we do.
Brian Erickson:
That’s really cool. I think that’s one of the silver linings or brighter sides of some of this is just recognition and being thankful for people who are on the front lines. It’s great to see that you guys are participating in that. As it relates to what you just talked about with more folks interacting online and staying at home and engaging with thought leadership content and webinars and whatnot, how are you segmenting your content efforts? Because as you mentioned, I mean, this is not something you pick up off the shelf at the grocery store in the checkout line, right? This is a complex sort of sale and there’s a lot of value add around just the product itself. So, are you creating content based on different stages in the buyer journey in different personas that are going to interact with the brand or how are you addressing the content needs?
Barry Breede:
Great question. In our case, and I think this might hold true for a number of B2B type scenarios, the first thing we want to be able to do is identify is who else engaged in that purchase process. So who else really has a vote and then try to tailor content to each of those segments. So in our instance, as an example, we have engineers that are involved in our purchase process and they want to know the engineering specs behind, as boring as this may sound, a utility pole, and then to make sure that it can withstand the type of environment that it’s going to be placed in for decades. We also have people on the operational front who are going to have to dispose of these utility poles. And I mentioned earlier, one of the things we try to work towards is kind of a total life cycle concept. So we want to tailor content that they find interesting because their responsibilities fall in that area.
And then I think, thirdly, we deal with price obviously as an important component of what we’re about. And that generally comes from the buyer side of the market, the person who’s got the buyer label, but has to listen to these other audiences that I just mentioned as part of that process. And for the buyer, we just want to really reinforce the value proposition that we’re going to offer, and that can come in a number of different forms but at the end of the day, we try to create content for each of the customers or each element of the customer that we’re kind of dealing with across the spectrum of the business.
Brian Erickson:
Yeah, I think that’s so important because you can really have to sell something in a completely different way depending on who it is within the organization and how they’re going to be dealing with things and even when you just say, content around the disposal of utility pole, those are things being focused on 24/7. It’s like, “Wow, that’s going to be a huge undertaking to dispose off utility poles.” So there are people thinking about that all the time.
Barry Breede:
That’s right. And so I think it’s just important to really kind of break apart all of the constituents that are involved in the purchase process of your product or your service and then align content against each one of them.
Brian Erickson:
So of course, nobody planned for this pandemic. It seems like nobody planned for this pandemic, let’s put it that way. How will your marketing mix shift on a tactical level from your original 2020 plan for the rest of the year? Is there going to be a major different allocation, a budget or a different mix of channels that are going to be important? What sort of shifts are you going to make tactically?
Barry Breede:
Good question. Also, I think some of the changes are probably pretty obvious and some that have probably been implemented across the board by a number of industries such as conferences and trade shows and the like have basically been either postponed or completely eliminated for now. So, any spending that we might have done, I think, in that area is right now on hold. And I think secondly, with this work from home phenomenon, to me this is going to be one of the more interesting scenarios to see how this plays out. If it plays out in a big way across industries, including ours, what effect that’s going to have in terms of the focus of our spend. If it plays out the way that it’s trending, I think we’re going to see less of our marketing spend go into mass media type marketing tactics, advertising, et cetera and instead of much more targeted efforts.
Rely more on the analytics that we have about our customer and then trying to create more personalized messaging around that rather than relying on mass media. I wish I had a crystal ball on that last piece, but that’s the one for us that’s going to be, I think, the most challenging is, what’s that dynamic going to look like? Is it even going to be feasible to have face-to-face interaction with a lot of customers on a go forward basis? If they’re not in an office environment how do you do that?
Brian Erickson:
Yeah. I think everyone in the B2B realm is going to face that challenge where there’s some sort of selling element to it, right? I mean, that’s a huge component to a big purchase, is the relationship and trust and whatnot and how do you continue to build that when you don’t have that same sort of, sitting across the desk from you is sort of bond.
Barry Breede:
Right.
Brian Erickson:
So, we can debate what the actual unemployment numbers are and what the Paycheck Protection Program and other stimulus money contributed to May’s decrease in unemployment numbers but regardless, that’s still staggering, right? So a number of marketers are going to find themselves as free agents right now. What advice would you give to folks who find themselves in the job market skillset-wise and outside of just building relationships and activating their network? What are the skills that you would look for, let’s say, in new marketing hires over the next six months to two years as this landscape changes?
Barry Breede:
Yeah. Well, if I were in the shoes and I feel blessed that I’m not at this moment in the shoes of someone looking for work, I think I’d probably start by just touching kind of all the familiar bases, I guess. I think the first question which is just a practical one is to ask yourself how long you want to stay or can afford to stay in that position. Because I do believe that some of this is a short-term scenario in terms of the unemployment rate and that we will see a rebound. And you may find that it’s such a tough slog right now that you might better use your time in some other areas as opposed to a formal job search because there’ll be so many people out there looking for work and that’s really just more of a personal question.
I think you also have to check the box for online networking and you might even create a blog and things of that sort as a way of trying to create a differentiator. You might even write a book but, if the need isn’t in the here and now and you need some type of, let’s say shorter-term, maybe contract type work, I would really say, focus on your industry knowledge more so than your general skills knowledge, because I think what’s happening or what the need is right now is someone that they can invest in, if you will, as a contractor who can be plug and play almost in terms of their ability and that they bring to the table an inherent understanding of the industry that they’re being asked to participate in.
And I think that really would separate you somewhat from a more generalist approach which again I just think is probably going to be tough right now to sell into the marketplace. I would leverage your industry knowledge and look for how to use that industry knowledge in a way that would show that you can get up to speed without a significant investment on someone’s part to get you there.
Brian Erickson:
That’s a great point. And even on the agency side, that’s very true when clients are selecting agencies. I mean, you need to have some baseline industry knowledge with any job these days and I think that definitely applies on an individual contributor basis as well. It just lowers your employer’s risk, right? If you’ve worked in the industry and have that skill set, there’s a shorter ramp up time and you can make some assumptions about being able to do the job.
Barry Breede:
That’s right. Investments in this area being probably fairly limited and tight. The last thing that an organization wants to do is find out they got into a relationship where it’s going to take four weeks for somebody to get smart on what your business is. And you’ve already had to pay you that basically for them to get smart on your dime
Brian Erickson:
Mm-hmm (affirmative). And four weeks is pretty quick.
Barry Breede:
Yeah.
Brian Erickson:
That can go by in a blink of an eye. If you could give one piece of advice to, let’s call it maybe mid-market and small business marketers in your industry right now, what would you say is really important to keep focus on?
Barry Breede:
Right now, I go back to that concept of what I was terming kind of assurance marketing because I think that’s particularly relevant for smaller and medium-sized businesses because I think they’re almost viewed to some extent as being the most vulnerable or potentially the most vulnerable. And I say that because the question comes up often, “Well, do they have a capital to have sustained power in their industry? Do they have a supply chain that they know is well thought out and not single sourced or single reliant on some critical points that may or may not survive during this time period?”
So I think it’s really just going back to your customer base and reiterating that you’re in a position to do business with them just the way you’ve always done business with them. And to be very transparent in that process too and in terms of revealing maybe where your opportunities are and where some of your challenges are, but to do that in a very forthright way. You may find this interesting, I’m not sure, but, right now in kind of a related field, the lumber industry is under a real challenge because there’s been this enormous increase especially in the big box chain stores like Lowe’s and Home Depot in lumber consumption because people are at home and they’re doing projects.
A lot of smaller and medium-sized players in the lumber industry were not prepared for this volume increase. They rely on a supply chain that goes deep into the woods and then involves mills and things like that. Those same people oftentimes, they’re aligned with a single source of production and if there’s a hiccup, which there has been in some cases, then there’s no product to sell and you get yourself in a real bind and you have to tell your customers, “I’m sorry, we can’t fulfill any of your orders.” I have heard that, I’ve seen that actually in a couple of situations right now. So, I just kind of come back to this notion of creating an assurance in your customer first all that you’re operationally going to be able to perform and you’re going to be able to do it in a safe and reliable manner.
Brian Erickson:
Mm-hmm (affirmative). And it almost comes back. In that aspect there’s multiple different aspects of it, but one component of it, which you’re talking about, I think is nimbleness, right? And the ability to turn on a dime and adapt as we are kind of in a chaotic period here that becomes more and more important.
Barry Breede:
Yeah, exactly. A lot of this is maybe outside of the traditional marketing domain but, being able to recognize that you need to be, like you say, nimble and have options so you’re not locked and loaded into a scenario where, if one part of the system or one peg falls, the entire system falls with it.
Brian Erickson:
Well, a little agility never hurt anybody, right? So, good to stay fit business-wise and physically during stay-at-home.
Barry Breede:
That’s right. That’s right. Absolutely.
Brian Erickson:
Well, Barry, thanks so much for taking the time to talk with us today. I really appreciate it.
Barry Breede:
Thank you, Brian. Appreciate it.
Brian Erickson:
Awesome. Well, make sure to look up Barry Breede, CMO at Koppers on LinkedIn and other social platforms and definitely make sure to pick up your copy of “Transforming The Utility Pole” during quarantine. It is going to be great reading for me over the next couple of weeks, I look forward to it. This is Brian Erickson with Cardwell Beach. Thanks again for listening and please make sure to check back for more senior marketers sharing their perspectives on what marketing will look like in a post COVID-19 world.
