Cooperating with the competition
Unique industrial exposition brings competitors together with some surprising results
By Al Tuttle, Associate Editor -- Industrial Distribution, 1/1/2002
Amid the marketing world's technological marvels of e-business, database management and integrated supply solutions, it's possible for the simpler, person-to-person meeting that ends with a smile and handshake to become all too rare.
Distributors often look for new ways to network. They join associations and other groups in order to make contacts and get fresh ideas. For two distributors, the answer was found in their own back yard.
For many years, Fuchs Machinery, Inc. and Midwest Industrial Tools, Inc., attended a local industrial goods show. They hauled machinery, tools and displays to the venue and set up often a week in advance. MRO/machine tool distributors in the Midwest, these rivals located in Omaha wanted to rethink their customer presentations.
The costs of rental, rigging and power, along with a desire to offer more hands-on training and demonstrations, led them to think about some possibilities.
Tom Berger, president of Fuchs and Allan Chartier, president and CEO of Midwest, are good friends but intense business rivals. For years, they competed head-to-head for a lot of the business done in the wide area of states surrounding and including Nebraska. They met and talked every year at meetings like the American Machine Tool Distributors Assn. annual convention and at industrial shows like the Omaha Products Show for Business and Industry.
According to Chartier, each was thinking the same thing but not saying it.
"We had been challenged by our management committees to try to reign in the costs of attending such events. I mentioned it to Tom and he says that he was asked to do the same. We began to talk about doing something in our own buildings," he says.
"The idea actually began a few years ago. We were at [the AMTDA annual meeting] and talked about ways to approach it differently," Berger says. "In early May we got together and knocked around some ideas."
Both realized that if a customer in their area was going to buy a large machine tool, he was surely going to contact them both for quotes and advice. They decided that in their own buildings, they could display their equipment, set up demonstrations and introduce their staffs to customers. Such an event could benefit them beyond the results of a single industrial show.
The result was the first Manufacturing Technology Exposition, sponsored equally by the two companies. It was held October 10-11, 2001, at their company headquarters. Executive sessions were held at an outside venue.
"We needed more than a typical open house, something that I think is not as popular as it once was. At an open house, I think you tend to get your local friends but we wanted a wider audience," Berger says.
Chartier and Berger talked about the possibilities and brought together a group of 15 people from their management teams to hash out details: when to run the expo, how to organize and advertise, and combine the unique fact that both companies offer MRO products and machine tools.
"I think that's part of what made it an extraordinary undertaking," Chartier says, " because we are so similar in size, products and customer base."
Berger is pleased that the transition from an idea to reality was done so smoothly.
"I'm amazed at how few hassles we ran into. Top-level management agreed that this made a lot of sense, so our job became convincing our customers and suppliers. Many of them would perhaps have to attend in lieu of other shows," Berger says.
To make it viable for customers, Fuchs and Midwest developed a two-day expo at their plants. They offered nine seminars at each location, and an invitation-only executive session at the University of Nebraska-Omaha's Scott Conference Center.
A shuttle bus ran among the locations, an added feature that pulled the whole program together, Berger says.
On October 11, the executive session, Forecasting the Manufacturing Economy in 2002 and Beyond, featured four speakers. Steve Kline Sr., of Gardner Publications Inc., spoke on forecasting capital expenditures; John McDevitt, corporate economist with 3M Co., spoke on forecasting the global economy; Ernie Goss, Ph. D. with Creighton University, spoke about the regional economy; and Ralph Nappi, president, AMTDA, moderated a panel discussion.
"We had to make it as attractive as possible for customers. The executive sessions were the biggest hit and most successful part of the program. We got more positive feedback than with anything we've ever done. Some customers drove over 200 miles to get here. We needed a really good concept to get them here, and I think the two reasons — seeing our companies and attending that session — really did it," says Chartier.
The setupAmong the logistics that needed to be worked out were dates for the executive session and expo, obtaining a venue and contacting customers.
One of the important issues was, who and how many would attend?
They polled their customers about the idea.
"The customers says that if there was enough time between the event and the Omaha show, they could probably attend both. So we scheduled it a month later. Also, since we are so near each other and the session site, customers were very pleased they could see it all, possibly, in one day. That was important," Chartier says.
It turned out that the expo was one week before an industrial show in Wichita, Kan., so manufacturers were close to Omaha with their equipment. It meant more of them were able to attend with their full complement of machinery, Berger says.
The committee then targeted about 750 customers with fliers, letters and a color postcard. Identical letter formats were used for each company, detailing which suppliers would be located at which distributor.
Fuchs and Midwest made sure to invite a full mix of customers' employees including foremen, plant managers, CNC programmers, and material buyers and managers, as well as owners.
To spice up the event, they added a NASCAR theme and gave away a grand prize trip to a Winston Cup auto race in Las Vegas. The sponsors purposely made as many displays hands-on and interactive as possible.
Trust and trainingBoth companies have always had a philosophy that training and education come first. Formal or informal, the more hands-on involvement customers, employees and students receive, the better.
As an example, Fuchs and Midwest sent a bus to the University of Nebraska-Kearney, to pick up students and professors from the Industrial Distribution department. Along with customers, students and faculty were able to visit face to face with manufacturers and employees.
"With respect to students, we feel the more they see and are taught, the better prepared they will be to become employees at our customers and manufacturers, and in distribution," Chartier says. He notes that training students from the university is a continuing project at both companies.
There were more than 20 seminars held by manufacturing personnel, over 30 product demonstrations and many machinery demonstrations in the two-day expo. The executive session was well attended by customers in high-level management.
"It was meant to try to encompass more owners and top management. They are not always able to attend a regular show. [Fuchs and Midwest] are solution providers. Yes, we sell tools but more than that we want our people and customers to solve problems together, and that's what happened here," Berger says.
"Aside from the positive comments about the executive session, customers say that the ability to talk to a manufacturer and solve a problem one-on-one was the most satisfying part of the expo," he says.
Customers agree. George Hasley, president of Nebraska Aluminum Castings in Hastings, Neb., attended the executive session and seminars at both companies.
"I was surprised that when they got us together, the forecasters detailed the economy of industry here in Nebraska. Large companies and small ones, like mine, were both impressed, when we talked about it later," Hasley says.
He also agreed that the focus and presentation was targeted to fit his interests.
"At a product show you see everything from tape to cutting tools. This was much more focused on the machinery I was interested in. I would like to have seen officials of the state of Nebraska come and hear about the future of manufacturing in the state," he says. "I'll definitely be there next time. You may have to beg for a seat. The people I spoke to are looking forward to it."
Larry Lyons, director of materials for American Meter Co. in Nebraska City, Neb., attended several seminars and the executive session with two associates. His group watched a specific machine demonstration and make a purchasing decision in a short time.
"The expo was more specific than a product show and that turned out to be very beneficial to us. We are looking at capital spending next year, and have a limited amount of time to spend at demonstrations," he says. "We had a very specific capital outlay to spend, and one machine demonstration got it taken care of in minutes. I would much rather do this than a product show where you get lost among hundreds of vendors."
The forecasting session was the highlight of the expo for his contingent, Lyons noted.
"It was ideal to what we need for information from a manufacturer's perspective. We make residential gas meters and are running at plant capacity. However, from a purchasing side, a look at the economy, and what our suppliers are facing next year, is important to us," he says. "I wasn't particularly surprised by any part of the event. Allan is one of the most visionary business people I know and the idea that he and Tom put together a program like that is, frankly, the quality that I would have expected."
AftermathIn the end, over 500 attended the expo, 343 of whom attended at least one manufacturer's seminar. The hosts gave evaluation sheets to the attendees.
"We were surprised by several things," Berger says. "We got many more raves about the expo than expected. In fact, customers says they underestimated how good this would be, the number of companies and experts. They say that if they had known, they would have brought more people with them."
Fuchs and Midwest officials also believe there were differences in the experience they got with customers from the average industrial show. The seminars and displays were very specific, but more than that, attendees were nearly all customers or potential customers.
Berger and Chartier agree that the audience at a trade show is much more generic and display operators spend much of their time explaining tools and machinery to people with no intention of buying. They each point out that they are involved in trade shows and will continue to do so, targeting their promotional budgets appropriately.
But, Manufacturing Technology Expo 2003 is in the works. Having created some excitement with the inaugural expo, the companies plan to make a regular, biennial expo part of their permanent marketing plan (the expo is planned every other year so as not to coincide with the International Manufacturing Technology show, held even years in Chicago).
"The thing that made this successful," Chartier notes, "is that we trusted each other from the beginning to do what we said we would. We both respect the people from our companies and understood that this would be a matter of trust."
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