Source: The Kula Ring

How Ecommerce Can Enhance Customer Service & Increase Sales

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 making out?

Carman Pirie: I am doing well, Jeff. And you?

Jeff White: I’m doing okay, too. I think my radio voice is particularly good today because I have the worst cold I’ve had in like a year.

Carman Pirie: So it can get you down to a different level of bass.

Jeff White: Yes, baritone. Yeah, no.

Carman Pirie: I’m just going to bring it down tonight. I don’t know where you are, or where you’re driving, but…no.

Carman Pirie: Well look, I got to say, I’m really excited about today’s guest. We love our American friends and we love working with American clients and interviewing American guests, but it is always nice to feature a fellow Canadian for a moment on the show.

Jeff White: Yeah, so joining us today is Murray Bain from Stanpac, based in Ontario, Canada. Murray is the VP of Marketing. Welcome to The Kula Ring, Murray.

Murray Bain: Well, thank you very much. Good to be here.

Carman Pirie: It’s fantastic to have you, Murray. Why don’t you start by introducing our listeners a bit to Stanpac and your role in history with the firm, just to ground our conversation in that.

Murray Bain: Certainly. Well, Stanpac, as you mentioned, is a manufacturing company. Our home base is in Smithville, Ontario, which is in the Niagara region, about a half an hour from Niagara Falls. We do, today of course, have a number of different locations in New Jersey and Texas and Mexico, as far as manufacturing and warehousing. However, our roots go back to Burlington, Ontario. The company was formed in 1949 and was a part of a large packaging conglomerate, Standard Packaging, and it made milk bottle caps that, the old paper plug caps that go in a glass milk bottle. So that’s our humble beginnings.

The Witt family owns the business. It’s a privately-held business. Steve Witt, the founder, purchased the company in 1971 and it was, again, in Burlington. There were two employees at the time. So from that, and then up to today, we’re just a shade over 700 employees, so a fair bit of growth over the years.

Carman Pirie: That is a remarkable growth story.

Jeff White: No kidding.

Murray Bain: So Steve moved the company two years later to Smithville, which is just kind of a rural community in Niagara. We’ve just kept adding different products and equipment and people through the years to where we are today, which is primarily ice cream packaging—it’s a large component of our business—but we also stayed to our roots and produce everything that you would need to have a glass refillable milk bottle. We have the bottles made for us, however we print on the bottles. We manufacture the caps and closures. We have cases. I guess our motto used to be for that business and still is today, “Everything but the milk.”

Carman Pirie: Nice. Look, for our listeners, I feel that there are a lot of areas where we could really dive into here to help, I guess, just inform the marketing dialogue. I think there are a number of things happening from an external perspective and just kind of societal perspective that, in particular, impacts packaging manufacturers but others, as well. And I think some of those dynamics are interesting to explore. And as well, the kind of how you’ve had to respond to an evolving marketplace.

So, I think for our listeners trying to wonder where is this conversation going, I’m here to tell you that I think we want to just provide some insight into the marketing, thinking, and expertise that has gone into leading the charge at Stanpac over the last while in the face of a number of these things.

First and foremost, I think for packaging manufacturers is the heightened sensitivity and awareness surrounding the environment. It’s interesting, of course, that politically is about the only place where there is a debate around climate change. I think most people otherwise take it to be true and understand the science that powers that understanding and knowledge. Packaging manufacturers, for a long time, have been sensitive to that, packaging often being held up as a part of waste in product delivery in some way, shape, or form. We’ve seen that recently in Canada, for instance, around cannabis packaging being a very hot topic, people thinking that it’s very wasteful.

From an environmental standpoint, Murray, you face these pressures, but then at the same time, my guess is that the customer base hasn’t always been as keen to vote with their wallets around those more environmentally progressive choices. Is that accurate?

Murray Bain: That’s very true. It is changing with both large and smaller users, the multinationals as well as local manufacturers. Consumers are making choices on smarter or, what they perceive to be as better packaging options. And manufacturers are starting to listen. It’s complicated, and I think for a number of years, folks have decided not to address it because their main concerns were shelf life, perhaps, of a package and keeping their product fresh as long as possible. Taste and flavor and nutrient profiles to ensure that when they create a product, that it stays the same. So, some complex packaging materials were needed in order to achieve that. And they thought that that was what was most important.

Well, consumers now are changing that and saying, “Yes, we want the product to be consistent and taste good, but also, we have to make sure the packaging is not harming the environment or contributing to any of the environmental issues that we’ve been talking about.”

Carman Pirie: Maybe I’m naïve to ask this, but I wonder how much of that sales conversation is changing as a result of evolving consumer demand, and how much of it is changing just based upon the people having the conversation. Are the people buying your products today just on a personal level more environmentally aware, and is that driving some of that behavior? Or is it simply purely a response to the consumer?

Murray Bain: That’s a good question. I don’t think I have a clear answer on that, but I do know that customers and prospects are asking those questions. I would suggest that younger generations—it’s certainly more on their radar. So, if you’re working with people in that part of the business that happen to be younger, then yes, I think it’s on their checklist.

Carman Pirie: Yeah, it’s interesting. I think that there’s lots of talk about the emerging digital native, millennial, what have you, B2B buyer, and changing kind of digital expectations and experiences, but I think those expectations and experiences, that those expectations that change or move beyond just the digital, I think it also impacts things like the, frankly, environmental sensitivity.

Murray Bain: For sure.

Carman Pirie: I’m also, just in looking at your business from the outside looking in, whether it be on the wine and spirits side of things, or even on the milk side of things, it seems like there must be a migration to dealing with many more niche local providers of these things. There seems to be an explosion in the buy local category in all those spaces.

Murray Bain: There is. There’s more of a crossover now than any time in my memory, as far as the dairy industry with the number of local dairies that there are compared to 10 or 20 years ago, as well as wine, spirits, and beer. Just in our area alone, there are hundreds combined, when there might have been one or two 10 or 15 years ago. So, it does make it quite interesting with all the packaging—everyone wants their package to tell their story, and to represent their brand, of course, so you’re seeing many variations on the theme. So, it’s interesting as a packaging manufacturer to be able to respond and provide so many different treatments and options so that they can all be individual.

Carman Pirie: It must also be challenging, however, to have a similar cost of sale associated with what was probably a much smaller order quantity.

Murray Bain: That’s true, however, folks are willing to pay what’s necessary for their package, and smaller quantities do carry higher costs and longer setups. There are so many costs, whether you’re doing 100 packages or a million packages that are the same, so it does end up costing more, but I think in the marketplace, you see that people will pay a premium for something local where they know where it’s made or they can see where it’s made. And they’d rather support their neighbor than somebody in a different country.

Jeff White: For sure. And I think, too, related to that, and perhaps shifting gears a little bit on this, a lot of the products that Stanpac creates can be purchased on their own without any customization or anything like that, as well. How did you see the opportunity for those very low volumes and kind of look to open an ecommerce store for people who may just be looking for some coffee cups or bottles directly?

Murray Bain: Well, we stumbled on that—I’d like to say that we planned and we spent a lot of money trying to figure it all out, but we stumbled on it, and it worked quite well. As smaller users and people that are perhaps in startups or mom and pop-type shops were looking for our products, they would call our office. We have quite a group of customer service people. One of the things that does separate us from the rest is we do a lot of one-on-one conversations with our customers. If somebody calls our office, they’ll be picked up on the first ring, and they’ll have a conversation with a person. And we have quite a large customer base, so we have quite a few customer service people.

But what was happening is when a customer service person was assigned to a customer list, a certain group of customers, perhaps by geography, and when other folks would come in who haven’t purchased from us before, there are lots of questions, and there’s many different products, and it requires a bit of a conversation. That was chewing up so much time that we didn’t have the opportunity to service correctly our longer established accounts that we work with every day of the week. So, we said, “Well, let’s sell some stuff online and see how that happens, and maybe we can direct people that are purchasing a certain quantity or less to our ecommerce site, and that will save a lot of time for our customer service people.” And it did. It worked really well. And that online presence has grown. It’s just about doubled every year in the last five years, so it’s served a great purpose, too.

On the other end of it, these customers are important as well, and once they get buying and growing, then it’s our hope that they will move across and work with our customer service people as they grow.

Carman Pirie: I’m curious to what extent you’ve noticed that happening already. Have you seen some of that effect of the online store as the gateway drug?

Murray Bain: For sure. Yes, it does. I mean, it doesn’t happen every day of the week, but to those who are growing, or trying something out, then yeah, for sure. If you were on our site, you would see messaging and links to, “Do you want a larger order? Do you want to customize this product?” So on, and so forth. So, there’s opportunities for them to jump across.

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Carman Pirie: I’m curious on the ecommerce side of the equation, part of it is an efficiency gain on the order, not just on the customer service side.

Murray Bain: Correct.

Carman Pirie: And then some of it is, frankly, a revenue gain, and then you disclosed that you kind of stumbled into it, which I kind of like that admission, frankly, because I think sometimes, as marketers we’d be well served to acknowledge sometimes when we just stumble into stuff, and that this isn’t all as scientific as we try.

Jeff White: Post-success rationalization.

Carman Pirie: Yeah. So, I’m just wondering—my guess is that you didn’t set up the KPIs at the start and say that we’re going to measure how much efficiency gain we’ve gotten back on a customer service and on, on, on. But, have you done that in retrospect? And how quickly do you think you kind of paid off that ecomm investment?

Murray Bain: Oh, we paid it off in the first six months, for sure. And it wasn’t that expensive. Now, we do, yes, now we look at what products are selling. We’re starting to put some products on sale. We’ve added a “Can I Help You?” And a live chat on the website. So, we continue to put some investment into that and to different products. In the last two years, we’ve purchased another company in New Jersey that makes food service packaging, coffee cups and take-out packagings. We’ve added all that to the site, as well. It needs a little tweaking still, but we believe that that will potentially outperform the ice cream and glass products that are on the site presently.

Carman Pirie: Very cool, and to what extent, as you look at your kind of ecommerce roadmap ahead, I’d be curious to what extent are you considering marketing automation, customer segmentation, more advanced plays there to help grow lifetime value of the customer and nurture those relationships. Or are you seeing it as remaining more transactional?

Murray Bain: I believe it to be, for the product group that’s on there, I think more transactional.

Jeff White: Until they make the jump.

Murray Bain: Yes.

Jeff White: Yeah.

Carman Pirie: But it’s interesting. I mean, there are probably instances where somebody could be actually reasonably large company buying a standard SKU, right?

Murray Bain: Yeah.

Carman Pirie: They don’t need to make the jump. Well, we shall try not to create a marketing strategy on the fly during a podcast for Stanpac.

Jeff White: It wouldn’t be the first time.

Carman Pirie: Oh, I just find it an interesting category so the head starts spinning around what’s possible.

Jeff White: Yeah, exactly. And your last point, Murray, around the acquisition of the food service packaging company, I mean, the mergers and acquisitions side has been a large part of the growth of Stanpac. I think you mentioned to me when we initially spoke, that the ice cream side of the business has driven a lot of that growth, and that only came on stream in 2008, I think you said.

Murray Bain: That’s correct. We did some ice cream packaging prior to that, but what we found is that we really needed a complete line of packaging in order for the industry to want to partner with us. There was a large packaging company that was selling off different divisions, so in 2008, we came to an agreement to purchase that division, and that tripled the size of our company overnight. That was an interesting time and an interesting challenge, but it went from one location in Smithville to two manufacturing locations, again in Smithville, and in Texas. So, it really changed the company. But we had a great team of managers and leaders that were able to just dive in and make it work.

Carman Pirie: The cultural transformation there must have been massive. I always find that an interesting dynamic when basically it’s a smaller entity taking over the larger one.

Jeff White: Yeah.

Murray Bain: Yeah. We worked very hard to try and keep the culture as close as possible. When you go through a seismic change like that, it becomes difficult. But many of the leaders in the company—now, I should mention that Steve the founder’s two sons are co-presidents, Andrew and Matt, so another generation is in place. And many of the leaders that they’ve chosen to work around them they went to public school and high school with and just they had gone away and gone to school, and worked in other markets, and we’ve brought them back. So there’s very similar interests in our leadership, and they understand the culture, and so they are able to choose their team members, too, that will fit.

Carman Pirie: I’ve got to tell you, Murray, at 20 minutes in, there’s no way I’m going to dump this on you as a redirection for the podcast talk.

Murray Bain: Okay.

Carman Pirie: But, I will say this. I think it would be fascinating to have a conversation about marketing within a family-owned manufacturing enterprise. There are a wide number of mid-market, B2B manufacturers across North America that are family-owned, still to this day.

Murray Bain: Certainly.

Carman Pirie: And I think it’s well documented some of the succession challenges and things of that nature that are associated with those businesses. But, I think it’s less talked about basically, the lived experience of the marketer and how that kind of environment might change it. So, I just want to put that bug in your ear and if our listeners hear that and think it’s an interesting idea, then maybe find a way to tell us that you think it’s an interesting idea and we can see if we can tee this up. My guess is though it’s just one of the hard things to talk about, too, right? Because of course you’re inherently talking about your bosses, which is a challenge.

Murray Bain: Well, Steve, the founder—out of all the businesses that I know and the folks that I work with, he’s spent an incredible amount of time and energy in the succession plan, to make sure that it would work properly. The boys had both been in the business for quite some time. Andrew used to be a sales fellow that worked for me. He took at least 10 years, not full-on, but over 10 years in preparation for the change. And he’s still quite involved in the business, and the boys promised not to screw it up too bad, so that was funny.

Carman Pirie: Did you see how I did that passive aggressive Canadian thing where I say, “Let’s not talk about this,” and then I stopped talking and allow you to speak about it?

Murray Bain: Right. There you go.

Carman Pirie: Nevertheless, I’m curious, as you survey the horizon and you look at steering the Stanpac marketing and sales apparatus over the next three to five years, I’d be curious about what things you’re most excited about, what opportunities you think might be around the corner, and also the icebergs that you’re worried about.

Murray Bain: Our growth over the past, I think, three to five years, probably the last three for sure, our growth has been 20% per year, so there’s a lot of work that goes into that, and there’s a lot of investment that’s required for growth of that magnitude. We’re hoping it won’t be the same this year, but we still have some aggressive growth on the go. As far as an iceberg goes, you think you’re going to hit the wall in the markets that you’re in, but how much more can you possibly get? We’ve been fortunate enough that the wall keeps moving further away, so our growth continues. So, investment is a challenge, as well, because being a privately-held company—and we’re not interested in doing anything different, we want to stay private—that can limit the amount of investment that’s available for equipment and infrastructure that’s needed.

On the horizon, we talked about it briefly at the beginning of our conversation that the environment of the environment, it’s really changing. Raw material suppliers are working on it. There isn’t a week that goes by where we don’t see something new that folks would like us to dig into and take a look at. So, we believe though there will be potentially a complete shift in our paperboard packaging to materials that aren’t available today, which will be quite interesting. You know, materials that are completely recyclable. There is a trend towards compostable packaging, but I personally don’t think it’s going to go there. It’s too hard on the coffee cup side of things. Unless the whole industry changes, how do you separate two coffee cups, one from McDonald’s and one from Starbucks and one from Tim’s, because a consumer can’t tell the difference. It looks like a paper cup. But if we can change the materials so that it’s recyclable just beside a cereal box or a cake box or whatever, then that will be a win. We’re presently working on, I believe it’s eight different options for paperboard packaging.

And then on the glass side of things, we’ve always been plugging refillable bottles as the best method for recyclability because you make a glass container and you use it over and over again as many times as you can, and then you crush it up and make it into a new glass bottle again. There have been many, mostly smaller regional and family dairies doing that, and they’re growing, but I don’t see any reason why that business isn’t going to take off for the next three years, as well.

Jeff White: And you also have a portion of the business that is dedicated to actually creating machines for filling packaging, as well. I think you mentioned an ice cream filling. How much of that is going into the thought process along with the packaging itself?

Murray Bain: Well, for a certain number of our customers, they will lease ice cream filling equipment—it’s called a Flex E Fill. That just provides a dairy with a very economical, easy solution to filling products or trying a new size. As it says, flex, it’s very flexible with quick changeovers. So that’s something. It’s not for all of our customers. Some of our customers have their own equipment. Some of them have much larger, faster equipment. Again, it’s just another tool in the box that allows our customers to easily use the products. It’s a good avenue for our ice cream packaging, as well.

Carman Pirie: Switching gears back to the environment piece, just briefly, I do think it’s fascinating to consider that just how that space can be open to massive regulatory change in uplift almost overnight. Whole markets can change. The landscape that you’re operating within can change with the election of somebody that, for instance, that comes to office with a climate change agenda, which we’re likely to see that in a major market that your organization serves over the next four to eight years. I think it’s just an interesting time to be in your chair.

Murray Bain: Yes, it is. Up until, I’m going to say even last year, political or not, however it comes to be, the industry has been working on this for quite some time, but I think it’s just the right time. I think technology is developing and resources are being put to it, as well. People say, “Oh, maybe people are wondering about the environment. We should start working on this.” I think just about the right amount of time has been spent on it for us to see some real innovations, which will be, again, exciting to get them to market and to see what customers want.

Carman Pirie: So, Murray, I’m curious, how long have you been in the role?

Murray Bain: Well, I’ve been here quite some time, about 35 years, and probably the last close to 30 of those were in sales, and then the marketing side of things.

Carman Pirie: I’m going to ask for some advice as we part ways on today’s podcast. I’d be curious what advice you might give a B2B marketer that just recently joined a manufacturing enterprise maybe in the last six months and is on the front end of that career. What do you wish you knew then that you know now?

Murray Bain: I don’t know if I know a whole lot more now than I did then. Basically, just don’t be afraid to listen to ideas and new things that are coming along. Just keep your ears to the ground and explore and share those ideas with the industry and those around you to see. Just a lot of listening. I think listening is pretty important.

Carman Pirie: I think that there’s a lot of wisdom in 35 years coming through in the understanding of your first point, which you say you don’t feel like you know so much. Quite honestly, I think part of gaining experience is the general understanding of how maybe little you know for sure, and frankly, increasing your willingness to be wrong or to be steered in alternate directions. So, I think that that’s actually great advice for our listeners to take.

Murray Bain: Try and get your mistakes out of the way first thing in the morning so you can have a positive afternoon.

Carman Pirie: There you go.

Jeff White: Yeah, exactly.

Carman Pirie: Well, Murray, it’s been a pleasure to chat with you today. I thank you for sharing the Stanpac experience with us and our listeners.

Murray Bain: You’re very welcome. Thanks for having me.

Jeff White: All the best.

Carman Pirie: Thank you.

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

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