Source: The Kula Ring

Building Successful Distributor Relationships

Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White.

Jeff White: Welcome to The Kula Ring. My name is Jeff White and joining me today is Carman Pirie. Carman, how are you doing sir?

Carman Pirie: I am doing well, Jeff. It’s great to be recording another episode today, and I’m really looking forward to today’s chat. I think it’s unpacking a bit of an angle in our discussions that we haven’t overtly talked about. I guess that’s really exciting to me, this notion of manufacturers transitioning to being more of a sales and marketing company than a manufacturing company. So as a bit of a tee up to what we’re going to be chatting about, I think our listeners are going to find that fascinating with any luck.

Jeff White: I think you’re quite right, and who we have on the line today is Dr. Bruce Howie, who is the global product marketing manager and Ashley Miller, who is a marketing planner at Dominion Colour. Welcome to The Kula Ring.

Bruce Howie: Thank you very much for having us, guys.

Ashley Miller: Yeah, thanks for having us. We’re happy to be here.

Carman Pirie: I’m going to say this is one of the rare times when we’ve had four people on the podcast, so I feel like there’s a nice balance in the room.

Ashley Miller: It’s all about balance.

Carman Pirie: It really is. Well, Bruce, actually, whoever wants to tee up this question, I guess introduce us a bit to Dominion Colour if you would and tell our listeners what you’re up to.

Bruce Howie: DCC or Dominion Colour has been around since 1946. Actually, bizarrely we started off as a wallpaper company and then they started to make their own colour for the wallpaper but realize quite quickly that they could make more money from making actual colour than it could from the wallpaper. So they switched strategies. That’s when the beginning of the company was incorporated. Over the years we’ve grown organically and also through acquisitions and we also have a very robust R&D team here as well. So we’ve really managed to expand the number of chemistries that we’re involved in for the colour industry. I know right now we’ve, in terms of a customer basis across 70 countries, and we actually have over 1,100 customers globally. So over the years we’ve really met and managed to build up that customer base.

Bruce Howie: Quite recently, actually, we were acquired by a private equity firm, so it was a privately owned company and then in 2018 we were acquired, sorry, 2016 we were acquired by HIG Capital and then last year in 2018 we also merged with the American company called LANSCO. So this was really to expand that product base. So we’ve now got a much broader and more diversified, and cost competitive product portfolio that we can offer to our combined customer base. It also gives us the opportunity to cross-sell the LANSCO products, that was the company in the USA, abroad and allow us to gain market share in the US as well. So it’s a win-win situation with the acquisitions and mergers of the last couple of years.

Bruce Howie: Now we have a company of 300 employees. In terms of the employees, they really are long-tenured, typically more than 10 to 15 years. So it’s a lot of people that have been in this industry for a long time, which is a lot of knowledge. As I mentioned, our products are sold in 70 countries and they’re supported by a direct sales team of 30 individuals. We also have 58 distributors globally as well. So we operate out of our combined nine facilities. We have seven in North America and we have two in Europe. We have 11 sales offices, and we have 22 warehouses strategically located across the US and in Europe.

Carman Pirie: Fantastic. Well look, I didn’t know the wallpaper origin, so that’s an amazing pivot actually. That could be the subject of another episode at some point. Let’s just jump into it folks. I would really like to talk about this transition to a sales and marketing company from a manufacturer and what that has meant. I know that meant a change in your approach to things like trade events and things of that nature, but I don’t want to put words in your mouth. Why don’t you take me through that and tell our listeners what that transition is meaning to you?

Bruce Howie: Well we definitely have had a great reputation over the years and in terms of our product quality and consistency. Also, we’ve got a very good service to our customers so we service our customers not only commercially but technically as well, which is something that a lot of our competitors do not do. So we will actually send in our technical teams to the customers to try and identify any challenges they’re facing and present them with solutions that allow them to grow their businesses as well.

Bruce Howie: Now we have the broadest product line in the pigment industry, which is fantastic. So yeah, it’s how that works in with the distributors now is in terms of our training and our relationship with the distributor. So we’re training them much more on our products, new products, old products, where to sell, each individual product or where you could sell a group of products together. I might go into the distributor, for example, and do some product training there and then go to the customers and doing a technical sale. Whereas before we didn’t do as much of this so that the customers knew about the quality of our products, but they didn’t know about the marketing aspects behind the products. You know, what benefits could they provide. By having us going in there and really promoting all of these products, it really is helpful to understand the varying products that they can use in their applications.

Jeff White: Bruce, just for the sake of our listeners, can you let us know exactly who those customers are that are buying Dominion Colour pigments and products?

Bruce Howie: For sure. We sell primarily to the coatings, plastics and inks industry. So coatings, there are numerous, you can have architectural coatings, automotive, powder coatings, coil coatings which all serve a different purpose. Then in the plastics industry, you’ve got various different polymers, so for each polymer you may have to use a slightly different pigment. Because each pigment in it not only provides a certain shade to the product that it’s been applied to but also technical properties. We really have to marry up not only the colouristic aspects but also the performance attributes of the finished product.

Carman Pirie: I hope that there are at least a few listeners who are like me that are thinking, “sheesh, we didn’t even know this existed.”

Jeff White: We just thought that paint came in a can.

Bruce Howie: When I studied for my Ph.D., I was working in a restaurant and a gentleman asked me what I was doing. He said, “Why do you need to do that? Doesn’t colour just exist?”. This seems to be the kind of notion that a lot of people that don’t really realize it, they just think they buy a can of paint and that’s how it comes. They don’t understand the technology behind that.

Jeff White: I thought one of the really interesting things that we spoke about before the show was this idea that there is actually a place in, I think you said Florida, where pigments are tested for weather fastness and there are vast fields of just colour chips?

Bruce Howie: That’s correct. We would send down a paint panel, maybe a couple of inches wide by three or four inches tall, and it’d be a spray paint application onto the panel. We send those down to Florida and then they keep them outdoors in these fields for one year and then after that one year you get the panel back and you measure the colour difference and that gives you an idea to the performance of the pigment and it’s actually in the paint film.

Jeff White: Fascinating.

Bruce Howie: So vast, I don’t know how big the fields are, I’ve seen some of the photographs and it does look rather large.

Carman Pirie: Everybody probably thinks it’s just the guerrilla marketing installation for Pantone or something.

Carman Pirie: Are you allowed to say Pantone on this podcast?

Bruce Howie: I think so, yeah.

Ashley Miller: The change towards a more sales and marketing company has also meant for us a digital marketing presence. About a year and a half ago, we didn’t have any social media. Now we have Facebook, Instagram, LinkedIn, Twitter and YouTube and almost all of them are updated daily with what’s going on at our company, whether it’s internal, if we’re at a trade show, if we’re having, we’re out to dinner, just activities that are going on. As well as it provides an avenue to promote our products as well as create a customer experience. There are so many reasons to have social media obviously, but we’ve really found that it’s been really successful since we started with this. We’ve also started our monthly newsletters, which allows our customers to be updated on a monthly basis of what’s going on at the company, our new products, product lines, that type of thing. Then we also have specific e-blasts that we send out too if something really important comes up so we can notify a certain region of customers what’s going on.

Carman Pirie: How has that work transitioned on the ground, as it were? You know, for instance, has it helped you in driving more traffic to trade shows as an example? Has it impacted the sales organization in terms of prompting more outreach from customers to sales teams? Is that what have you seen so far?

Ashley Miller: Yeah, we’ve definitely seen quite a few of those things that you’ve mentioned. Actually, at the recent European coating show that we were at, we were promoting that we had an artist doing caricature portraits onsite and there was a few people coming by the booth the following day asking about it. So it really shows that people are on there, following us, looking at what’s going on at certain trade shows. We’ve also had a lot of our customers and distributors follow us and we’re often engaging with them, asking them questions. We can see what’s going on in their life and they can see what’s going on with us and we’ve found this to be really effective in building our relationships in this digital world.

Carman Pirie: How has that been received internally? I mean, I’m kind of picturing in the conversation that you have when you’re seeking budget approval to hire the caricature artist as an example, and people are thinking, “Well, what does that have to do with the business anyway?”. So has, you know, how has that sales job been internally?

Ashley Miller: Just going back to the artist for example, our colours are used in those inks. Or they could be, so we were trying to tie it in and bring people into our booth that way. Internally people have really received our social media presence really well. They’re following us and posting photos and that type of thing. So it’s been really successful from what I can see.

Bruce Howie: To touch on Ashley’s point, I think the big difference I’ve seen, we’re moving that needle to more of a sales and marketing company as engagement. You know, and with engagement comes trust, not only in the product but also in the people that are selling those products as well. I think that’s been a massively important thing for us.

Jeff White: Interesting. How have you seen, cause I mean, the kinds of things that you’re talking about, Ashley, are certainly great ways to provide connectivity to Dominion Colour as a group of people, I guess. You know, you start to see not just the company but the people who make it up and forge some kind of connectivity with that.

Ashley Miller: Exactly. People like to see their picture online and all the events that are going on different sites.

Jeff White: Absolutely. Yeah. And is there anything that you’re doing from that perspective? Are you measuring the sales velocity or the kind of increased customer activity in any way internally, to understand the ROI of these activities?

Ashley Miller: When we promote our products online, some people actually send us a message and then that’s tracked, just to make sure that we can somewhat measure the ROI  social media. A lot of it is about creating this customer experience. So you don’t necessarily want to promote as much as you engage, and you’re seen as a more fun company behind the scenes. Especially on Facebook and Twitter. However, LinkedIn, on our more professional platform, we tend to post more market-related things that we can also track who has liked it and people will also message us there and we can track that and track if samples have been requested from these people and close the loop that way.

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Carman Pirie: I wonder if we might shift gears a little bit because I think one of the interesting things that I’ve learned about your firm is that you seem to have been able to forge really, really healthy relationships with your distribution partners. So often in many of the areas where we work, frankly, and in a lot of areas where, and when we’re talking to guests on this show, we find that that manufacturer-distributor relationship is increasingly the focus of tension, not the focus of harmony. You folks seem to have zigged while others are zagging. I would like to know a little bit of what the secret sauce has been there, and what has allowed you to do that. Could you maybe talk to us about some of the successes and wins that you’ve had in collaborating with your distribution partners and how you really made that work?

Bruce Howie: I think firstly it really relates to personnel. The sales managers we have in the field are, let’s say sales manager is in Asia Pacific, he’s from Singapore. So we’re not selling and we’re not sending someone from Toronto over there who may not really be tuned into the culture or the way business is done over there. That’s a big plus point. The people and the sales managers we have in Latin America are from that area, North America from that area, even the Middle East and Africa, the sales managers, there are from that area. So they have an acute understanding of the people, the politics, and how the industries there that are run as well.

Carman Pirie: It’d be incredibly helpful. I just can imagine some instances where people are flying in their sales organizations to, and they have to really start from behind the eight ball in terms of trying to learn how business is done in that particular area, let alone how they relate to distribution partners.

Bruce Howie: We’ve actually hired some of our distributors before. We kind of poached them from the distributors. You know, you find out who the good people are, who are the people understand pigments especially, and you look at the way that sell the products. Are they comfortable selling it technically as well as commercially? Then over the years, I can think of a few that we’ve actually hired in-house so they then work for us and then deal as a sales manager with our distributors.

Carman Pirie: Well, Bruce I’m beginning to understand that there may be something beyond the technical prowess that has led to the “doctor” in your title. Because if you managed to poach staff from distributors and maintain a healthy and positive distribution relationship, that is impressive.

Bruce Howie: The reason, as you know, these guys already have a good relationship in their markets anyway and they understand how the industry works. You know, people do move jobs from time to time and they’re still maintaining that relationship that the had with their previous employer. So this year as a win-win, the previous employer, they know they’ve got an experienced member of staff who’s now working solely on pigments who can give them their focus 100% of the time to help grow their business as well. They see it as a win-win.

Carman Pirie: I’d be curious if you’ve, in a lot of sales organizations, of course, the shift to digital has really changed about go to market approach, even just how sales teams and distribution partners are supported. I’d be curious both from the digital perspective but also from the perspective of just different cultures and geographies if you’ve evolved how you serve those sales teams and if you’ve had to be sensitive to different geographic cultural considerations in doing so.

Ashley Miller: From a digital perspective, we’ve shifted towards a lot of GoToMeeting and online training sessions. At the beginning, we’ll have a chat with everyone and then we’re able to update them on the new products and ensure our messaging is consistent globally.

Carman Pirie: That’s a huge change from just a short number of years ago when everybody would be getting on a plane and trying to deliver that consistency in a hundred different individual meetings.

Ashley Miller: Yes. I believe before they would have large meetings where they would all get together.

Bruce Howie: Two or three days kind of thing.

Ashley Miller: Now it’s a lot more efficient because you can just do everything digitally and take an hour out of your day.

Carman Pirie: Do you support folks differently depending on where they’re located? Have you had to evolve that at all to take into account specific considerations culturally or geographically?

Bruce Howie: We do actually. So in terms of product range, we’re splitting that up into three geographical areas. So North America, then it would be Europe, so both western and eastern Europe and then the rest of the world. That’s just down to the products that we can sell in those areas. So you know, maybe due to regulations, also the stocking situation, you know, where can we stock, how much, how many tons of product can we stock in each of these areas as well. Those are some big considerations that we have to take into place. From there, obviously, then we generate our brochures, our product flyers, and all the support material that we have for the sales and distributors within that geographical area.

Carman Pirie: Is that support material migrating to digital as well?

Ashley Miller: Yes, it’s all available online.

Carman Pirie: Are there sales people using the online versions of those assets in their sales conversations, or are you still printing a lot of flyers and catalogues and things of that sort?

Bruce Howie: It’s actually both. It’s a bit of a shift. It depends on the salesperson. I know one salesperson, he’s got like almost a suitcase which is full of these paint panels and plastic chips that he likes to take round because customers still like to see those types of sales aids. The brochures, it’s moving more to the electronic versions, but a lot of guys, they still like to have their hands on a brochure that they can flip through and maybe write some notes on regarding each of the products.

Bruce Howie: We also have a thing we call the mobile lab, which our sales managers have on an iPad. In there it has all our technical comparisons against our own products, competitors products, and also shows you the depth and breadth of shades that we can afford with all the different pigment chemistries that we now have on. They’re able to take that in front of the customers and really do a kind of deep dive into exactly what the customer needs. Not only in terms of shade but also in terms of performance attributes, so it may be solvent fastness, weather fastness, acid, alkaline resistance, chemical resistance, all these different parameters.

Jeff White: I think there’s something really interesting about this and maybe it’s the former graphic design print geek in me that is interested in it, but I always remember, you know, just the differentiation between pigment colour and pixel colour, you know. This isn’t necessarily directly related to any of the things that we’ve previously talked about on the podcast, but I’m just wondering, you know, what is, to some of your customers, what is the value to them? Do they need to still see in a lot of cases that physical pigment on a substrate in order to be able to understand the quality of the colour? Or is digital acceptable to most of the people you’re dealing with these days?

Bruce Howie: I’d say digital is acceptable at the initial level. When the salesperson is going in, this is the product, because each pigment has its own individual colour index. But within that colour index, you may have shade variances. So as a first step, the iPad or the drawdowns are very good. But then they’ll obtain a sample. They will test in their system because whether it’s a coating, plastics, or ink manufacturer, they’ll have very defined formulations that are more than likely proprietary. They will use additives which are different from their competitors. So they really like to test in their own systems. Then the thing for us is once they come back to us with their test results, we then have to marry up our test results to theirs. They may be seeing it slightly redder where we’re seeing it as very similar. We then have to alter our test method accordingly so that we are seeing like for like with our customer.

Jeff White: Fascinating. The colour is the product. You can’t get away from having to show that.

Bruce Howie: No, because you have to incorporate it into another medium, it changes the ballgame, you know? If you took one red and put it into plastic and one into a coating, it might give different shades. Actually, that’s why it’s quite difficult to match up. You know, the bumper on your car, which is plastic nowadays, and then the body of the car, which is metal, there are actually different formulations. So the colours to match up the bumper to the body will be slightly different.

Jeff White: I had a white Honda Pilot at one point in the bumpers always looked more yellow than the rest of the car and it drove me nuts.

Bruce Howie: That’s it. That kind of colour matching as well, you know, that’s very tough to do. You would kind of think it’d be easy, but it’s just because of the substrate’s different, so you, therefore, get different effects.

Carman Pirie: It wears differently I suppose, too, to our earlier point around the Florida test plot. You know, it may fade faster or differently on plastic than it does on metal or what have you, I assume.

Bruce Howie: Aso the ability of the pigment let’s say, to bind to the surface would change as well. So you may see more stone chips on your bumper then you do in your body, for example. It just may be that the paint foam is more robust than the plastic that’s on the bumper.

Carman Pirie: Very cool. Well, if any of our listeners are recently in a fender bender and they’re wondering why it’s going to cost $5,000 to replace the bumper, I don’t know, maybe this helps explain it a little bit. It makes you feel better about it anyway.

Carman Pirie: Well I would just be curious. I know we’re getting towards the end of our time together here and I’m just kind of curious if we can look five years out and I’m kind of wondering two questions. I’m wondering what it looks like or when do you know you’ll be successful in making that transition to more of a marketing and sales organization versus a pure play manufacturing organization? I’m curious just kind of what key milestones you may have in your view that would tell you that you’ve knocked that out of the park and I’d also be curious about what you, as you look ahead, what you think the future brings in this space and how the marketing and sales apparatus is likely to evolve over the next while?

Bruce Howie: That’s a good question. You know, in terms of how it would look, I guess, certainly increasing engagement. We’ve even been looking at things like ordering products online. We know certain geographies may not prefer to deal with an individual, but you know, now with today’s modern technologies, they prefer to go on to faceless computer and order online. They’d still be engaging with someone in the background, it may be myself, it may be Ashley, or one of the sales guys by email in that sense. It just gives them another option to purchase our products.

Carman Pirie: So you’re seeing a potential evolution even on reorders, I would think, moving to more ecommerce would make some sense.

Bruce Howie: Yeah, absolutely. It saves them time. They don’t have to go through a long conversation if it’s a sales guy trying to sell other products other than the ones that the customer wants. So they go online, they can just purchase exactly what they want and then move on to the next one.

Carman Pirie: Yeah man, you got to watch us crafty sales guys, you know.

Jeff White: Are any of your distributors currently doing any sort of ecommerce?

Bruce Howie: I have not seen or heard of any at the moment.

Ashley Miller: I believe the Alibaba site has an ecommerce auction for pigments and other types of chemicals. But not within our distributors, I don’t believe.

Bruce Howie: No. We don’t sell to Alibaba either, but we did notice when we were on the web that they were selling pigments there. You never know, maybe in a few years’ time, it’ll be Amazon where you get a 10-kilo bag of yellow.

Jeff White: There’s an awful lot of people out there going, “yellow what?”

Carman Pirie: I think that’s interesting too to consider. I mean you’re looking into the future and seeing ecommerce reordering as being a thing and the distribution network isn’t there yet. So it seems like that may be more of a manufacturer-led initiative. So I’ll be curious to see that unfold and see to what extent. Not that I’m wishing disharmony with your distribution team, but I’m curious to see how that evolves. Of course, that pushes to a more direct relationship when that happens.

Well, folks, I think this has been a really interesting if meandering conversation. Is there anything you would like to leave our listeners with before we part ways today?

Bruce Howie: We’ve covered pretty much all bases I think.

Carman Pirie: I put you on the spot there. That was a nasty question.

Carman Pirie: That was just unfair. Bruce, Ashley, I really thank you both for taking the time to explore this with our listeners today and dive into this world that, I think it’s just an industry that’s incredibly fascinating. The global footprint that you have and the apparatus that you have to bring it to market is truly impressive. So I thank you both for sharing your experience with us today.

Bruce Howie: You’re welcome. Thank you very much for having us both on today.

Ashley Miller: Yeah, we’re happy to be here.

Carman Pirie: Wonderful. Thanks for joining us.

Jeff White: Take care now.

Bruce Howie: Thanks, guys. Bye-bye.

Ashley Miller: Thank you, bye.

Announcer: Thanks for listening to The Kula Ring with Carman Pirie and Jeff White. Don’t miss a single manufacturing marketing insight. Subscribe now kulapartners.com/TheKulaRing. That’s kulapartners.com/TheKulaRing

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