In the year 2000, my business partner (my brother) and I assumed control of our then-75-year-old family business; a debt-ridden, bankrupt, and money-losing operation.
Our competitors had introduced foreign-produced products into the market, labor costs had risen dramatically, and our local economy was reeling from a series of downturns. These factors made it increasingly difficult to remain competitive. On top of that, there was limited opportunity to expand our customer base in the geographical region where our company had focused its business efforts for the last 75 years. The challenges we were facing seemed virtually insurmountable, and we recognized change wasn’t optional. It was a necessity.
The question we faced was, “what would this change look like if we ventured down this path?” We could adopt a more conservative approach and hope that employing long-standing business methods would somehow get us through the difficult period. Or, we could completely re-think the way we did everything. We decided to take the riskier of the two options and respond to our business challenges with innovation. We chose to adopt smarter operations, which became the defining moment in our company’s story, signaling the first step on our path to growth and eventual success.
Growth By Adopting Smarter Operations
Back in 2000, survival was more important than growth, and “adopting smarter operations” was a term that we would only come to learn more than a decade later. Without the clearest of road maps to guide us, we embarked on a process of change on many fronts, but most importantly in these three areas:
*Exploitation of internet marketing
*Adoption of technology
The first step in adopting an innovative approach was to capitalize on the opportunity we found on the internet. In the late 90s, we had posted several of our company’s standard wheel and wood processing products online. Soon after, we received inquiries that came from hundreds of miles further away than any of our previous customers were located.
Our customer base had previously been limited to businesses located in the Pacific Northwest, or at least those that our two outside sales representatives could reach from their home bases by car. With the help of the internet, our once local market exposure rapidly expanded across North America and, eventually, worldwide. The web presented us with an opportunity to expand our customer base, but it also showed us that it was possible to conduct sales and marketing in new ways.
We were unsure how accepting our customers would be of our decision to go digital. Switching from a traditional, on-the-ground sales strategy to one that was 100 percent focused on the company’s website had clear advantages, as the traditional outbound sales team could only reach a handful of regional customers each day at a significant cost. Employing an inbound, content marketing strategy allowed our company to rapidly scale the volume of customers and potential customers that we communicated with each day, a significant improvement in capacity when compared to traditional face-to-face marketing techniques. By focusing our efforts on inbound sales initiatives over the internet, we could reach a vastly larger volume of potential customers than ever before, eliminating the need to expand our outside sales force.
While web-based marketing’s success is evident today, our decision to venture into virtual marketing was uncharted territory at the time; sales, marketing, and commerce in general in the construction industry were business processes more often conducted in person between local businesses. With the advent of internet marketing, our company could reach companies in far-away places like Little Rock, Arkansas, or Plant City, Florida, showcasing the internet’s extended reach potential.
By choosing to embrace the opportunity early, this innovative technology gave us a foothold in the market. Continuous improvements to our company’s web presence and significant investments in content marketing steadily improved our company’s search engine ranking results, which translated into much higher market exposure.
An essential component of promoting our products was utilizing innovative technology, but it was also the key to more efficiently managing our company’s administration. In 2006, we made a change to a largely unconsidered and adopted strategy in the foundry industry; at that time, the concept of a cloud-based system for foundries was unheard of. However, employing this innovative technology eliminated the need for in-house servers, many software packages, licenses, and IT staffing to support all the hardware, and software. It also eliminated separate systems of accounting, quoting, sales, inventory, costing, and production.
The “cloud-based” system effectively brought under one umbrella most of the company’s administrative tasks, the CRM, all order management systems, and even the web management system - and made these features available from any browser, anywhere in the world. The immediate efficiencies and cost savings of this centralized, unified system were demonstrable; staff could manage 10-20 times the daily transaction volumes compared with the previous IT model. In the following years, we were even able to dramatically scale up our business without having to consider employing a corresponding, dramatic increase in sales staff.
Despite only a small staff engaged in marketing, the company increased the sale volume ratio per employee. Implementing these innovative systems required smart and creative people at the center of these changes. Finding the right people was necessary, though sometimes difficult. Implementing innovative new systems involves encountering glitches, and new systems should be tailor-fit to a company for the sake of efficiency. We found skilled employees could implement their design visions in this process. This led not only to improved systems but also to heightened employee engagement. The role that staffing plays in smarter operations cannot be overstated; our staff played a pivotal role in our switch to cloud-based systems, and continuously help us evolve our system efficiency today.
As our web presence expanded, and our competitors began to also focus on web marketing, we noticed that most companies guarded their pricing and technical information, keeping everything as secretive as possible. We saw this as a way we could differentiate ourselves from everyone else; by presenting our pricing and intellectual property online, we allowed our clients to be self-serving, thereby making their experience with us much more efficient. Online pricing allowed customers to get price estimates for their projects, without the time or expense of a meeting or waiting for formal price quotes that were the industry norms at the time.
Going a step further, we recognized the need to be fearful of intellectual property theft when it came to sharing proprietary information (drawings, specifications, etc.), but we felt the benefits of providing this level of detail to interested clients without restriction outweighed the possible damages. This assumed, however, that we could stay ahead of our competition with respect to our design, development, quality, and pricing. The result was a greater number of architects specifying our products in their design projects without ever even having a conversation with us, because the information they needed was so readily available.
Many of the steps we took to address our sales, marketing, and administrative challenges appear obvious today, but they were untested and unproven at the time.
These innovative systems laid the ground work for our growth and improving success. Our cloud-based system has streamlined all aspects of our business, and our online marketing efforts led to a business expansion by an average of 23 percent yearly since 2010. By 2016, we achieved 10x the sales volume compared to our 2000 sales with only twice the number of staff; we were able to grow our efficiency and productivity by a factor of 5.
“Adopting smarter operations” was not without its challenges, but it did teach us the importance of thinking outside the box. The decision to integrate web marketing, innovative technology and transparency into our operations were key factors in our success.
Brad Done is a 3rd-generation co-owner of Reliance Foundry Co. Ltd. He has more than 30 years' experience with the company—and more than 15 years as the Vice President of Sales and Marketing. His unique education and experience in metallurgy, online content marketing and business management have positioned him as a valuable asset in bringing Reliance Foundry to the forefront of a growing industry.
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