Industry Roundtable 2018 – Part 2: Changing Customer Expectations, Online Marketing and Corporate Culture Transformations
Leadership Roundtable Part II: A discussion of industry executives exploring the changing labor and customer landscape.
By Tim Cox and Chaille Brindley
Date Posted: 7/1/2018
This year the Leadership Roundtable Discussion covers changing customer preferences, human resources and labor recruitment strategies, marketing in a digital age, developing better corporate culture and more. This is the second and final article in a series exploring major issues and trends with an eye to the future. Special thanks to those who participated in the roundtable. Each participant is an accomplished industry leader who has something important to say. The panel participants include:
Fred Vrugteveen, General Manager, Niagara Pallet. Niagara Pallet in Ontario, Canada, is a leading manufacturer, seller and recycler of pallets and shipping material.
Kyle Otting, CEO, 48Forty Solutions. Formerly CHEP Recycled Pallet Solutions, 48Forty Solutions is the largest pallet management services company in North America. Kyle previously held leadership positions with CHEP and IFCO.
Manuel Tavarez, President, and Michael Tavarez, Operations Manager, Harvey Pallets. Based in Blue Island, Illinois, Harvey Pallets offers complete pallet management services and unit load solutions. A manufacturer and recycler of pallets and containers, the company also operates a sawmill in Missouri.
Mia Allen, Vice President, Rose Pallet. With vendors across the country, Rose Pallet brokers a complete line of pallet services and products, including lumber and new and recycled pallets.
Wayne C. Randall, President, United Pallet Services. United Pallet Services provides new custom pallets, recycled pallets and pallet logistics services in northern California.
Pallet Enterprise: How are customer requirements changing in terms of pallet design?
Wayne C. Randall: Basically, customers are driving the change in pallets because of price. They don’t want to accept the price increase from higher lumber costs. So, we’re coming up with combos, we’re taking boards off...The pallets are not as strong and don’t do the job as well. We’re substituting other species for the quality of firs. It’s all to meet the price demand that customers require. Part of the problem is, if we don’t do it, another pallet company somewhere is going to do it for them. It’s degrading the wooden pallet...It’s one thing after another — change the configuration, reduce the amount of wood and so on.
Fred Vrugteveen: Expectations are not the same. We recently quoted a steel mill. Our price was 200% too high, double what they wanted to pay. We’ve helped other customers who were buying the same pallet for years. We analyzed it with the Pallet Design System, determined they’d been buying over-built pallets.
Manuel Tavarez: This is one of the big changes that we’ve been going through, dealing with higher prices for new lumber. A lot of customers come back and ask, ‘What else can you do for us?’ We talk to them about combination pallets, recycled pallets, or changing the configuration of their pallet. We’ve been very successful with some customers, changing them to a different pallet. They are willing to listen and just want to have a better option. Like us, they’re always interested in saving money.
Pallet Enterprise: How is your company seeking to builds its brand in the digital age? Are you doing any online marketing? What’s worked for you? Do you find older approaches don’t work?
Fred Vrugteveen: We did a significant rebranding last year and changed our website. When you have a good Web presence...keep it up to date, you’ll get traffic because people are looking (on the Internet) for pallets. We get one or two inquiries a day from our website. We’re putting the effort into our online presence because people are looking online. You’ll get results.
Kyle Otting: Having just gone through a massive rebranding effort, I can say that digital marketing and having a presence on social media are extremely important to us. It’s important to have a website with accurate information. From a social media perspective, there are about 500 million users on LinkedIn and 2 billion on Facebook, so we can touch a lot of people using these sites. And it’s not just customers that we’re targeting. We use it as a recruiting tool, to communicate with our employee base, and with industry overall to provide thought leadership. It’s an incredible tool to get your message out.
Mia Allen: I agree with those comments. We’re a pretty young company. When we first started, an online presence was extremely important. We get four or five leads from our website per day. We publish a blog, and we attract a lot of social media coverage on Facebook, Instagram, and Twitter. We hired an outside company to help with it.
We’re going to have a new website in 2018. We haven’t changed it in years. It’s extremely important to have an online presence. It’s the way people are buying today. They go online and find the product. It’s kind of a new mentality. It’s just the way people shop now.
You can’t just rely on word of mouth. If that’s what you do, you have to re-think your marketing.
Pallet Enterprise: Does anyone believe that on online presence is more than just marketing? Do you have customers who want an online portal for access to place orders, report problems with orders — more than just promoting your company and offering information?
Wayne C. Randall: Yes. We have the ability for our customers to place orders online for pallets or to arrange collections for used pallets. It’s very critical to have a well-done website. Customers are using it more and more. It’s easier for them.
A lot of people don’t like to communicate verbally. They’d rather do it via computer. You go into a restaurant, people are talking or texting on their phones, not to each other. They don’t say a word to the other person. This is the way life is. In some respects, it’s easier. But it impacts the personal contact and personal relationship you can build with a customer.
Pallet Enterprise: What strategies have you used to find and attract good workers and keep them at your company?
Wayne C. Randall: We have 130 employees. It’s been a challenge to keep our labor force intact. Benefits are becoming more and more important to people. The construction industry is booming. We’re in the central valley of California. In the San Francisco Bay area, they’re paying laborers $25 to $30 an hour. A lot of people are driving over there every day to work. We’ve lost quite a few people because of that. It’s been a challenge. We’re using some temporary labor to complement our needs. That’s not the most desirable, but it’s what we can accomplish.
Kyle Otting: With 2,400 employees, we obviously face many of those challenges that Wayne just described. Our facilities are located in industrial parks where there are large global manufacturers. So we are in essence competing for labor with those manufacturers.
We’ve done things to improve safety, housekeeping and employee benefits to be more competitive and to offer our employees a great workplace experience, but it’s not easy. Competitive wages are certainly a challenge, but in my opinion, it’s a smaller piece of the recruiting and retention puzzle. It’s all the small things you do in your organization, the culture you create, and empowering employees to make decisions that can really impact recruiting and retention.
It’s a huge focus for us because of the number of employees that we have. It’s the one thing that keeps me up at night. How do we retain these individuals and offer a great employee experience?
Fred Vrugteveen: There’s not much technology in most pallet shops our size. One thing we’ve done is use online testing to look for motivated people with good attitudes. We want to hire people who are motivated and have good attitudes. Those two factors will get you the type of workforce that will stick around.
Pallet Enterprise: What makes your company a unique place to work? What are you doing to build a better culture for your company and to impact the community around you?
Michael Tavarez: The challenge is trying to keep them motivated, trying to keep them happy. Your employees spend a lot of time there. Try to provide them a positive experience. It’s definitely one of the things we stress.
We strive for a familial kind of environment. We consider each employee someone who is valued and respected. I deal with managers and employees, and not everyone is going to agree, but no one can be disrespectful.
A couple of years ago we created a scholarship opportunity for children of employees. The program is for high school or college. We have our first student who has a full-ride opportunity through this program. It reflects the value we and our employees put on education. A lot of employees look up to that focus, and they don’t see other companies doing it.
Mia Allen: That’s a great idea. We don’t have an issue with wages, people leaving for a little more. Last week, for someone’s birthday, we hired an Elvis impersonator to come in and entertain the staff while we provided lunch for all employees. We took half a day for it. Work can be very stressful because of issues with customers and deliveries. We were getting away from showing appreciation to our people for a little while. But we have made that a focus again. We offer a lot of gift cards for employees, too.
At Rose Pallet, we’re big on helping a cancer support center. Our employees have volunteered time to help there. They’ve also volunteered to cook meals at a Ronald McDonald house. These are opportunities to do something together outside work that is good for the community.
Fred Vrugteveen: Our values determine the culture of our company, and we push them and promote them. We have a monthly breakfast with employees to solicit their feedback. Our values are simple and clear. Treat people how you want to be treated. Do your job the best that you can. Do it right the first time. These are a few examples. These values reflect our culture and our company and what we think our customers expect.
Pallet Enterprise: What are one or two things that you think pallet and lumber companies need to do in the next few years to make sure they can survive and be successful?
Fred Vrugteveen: Sell your customers what they need. Implement processes to reduce labor to get your products to market.
Kyle Otting: Don’t be afraid to innovate. Innovation can be as simple as trying something new or simply doing something a little different. Whether it was a successful or not, you learn so much and ultimately make your business better. Don’t be afraid to make changes, think differently, and think smarter.
Manuel Tavarez: Patience and passion.
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Leadership Roundtable Part II