For Years, We Thrived Without Marketing. Now What?

Introduction:

This week, we bring you another Entrepreneurial Fish Bowl with Chris Hutchinson. These Fish Bowls are our virtual brainstorming sessions where we offer business owners the opportunity to pose a challenge they’re facing to a group of owners and entrepreneurs from the 21 Hats community. This time, our volunteers are Alvin Elbert, founder of A.R.E. Manufacturing, and his daughter Megan Perona, who explain that their company had its best year ever in 2022 but have seen business fall off since then. For 40 years, A.R.E. grew slowly but steadily on word of mouth. More recently, however, the Elbert family has concluded that it’s time to do some real marketing. Like a lot of owners, though, they’re a little overwhelmed by the options, unsure where to begin, and wary of wasting money. They also happen to be going through a family ownership transition. The 21 Hats brainstormers begin by asking a lot of questions, including whether the owners have invested in search engine optimization, whether they’ve gone back to some of the customers they lost to China, and whether they’ve considered hiring a marketing agency.

— Loren Feldman

Guests:

Chris Hutchinson of Trebuchet Group, along with his colleague, Katie Huey; David Barnett of Business Buyer Advantage; Chris Campbell of Ritzr; Jay Goltz of The Goltz Group; Josh Inglis of Propllr; Paul Jordan of Egeria Group; Lena McGuire of Spoca Kitchen and Bath; and Leisa Peterson of WealthClinic.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
All right, are you guys ready for some Fish Bowl? Let’s do it. Welcome to our fourth Fish Bowl, led by our facilitator Chris Hutchinson of Trebuchet. Chris, what does Trebuchet do?

Chris Hutchinson:
We help leaders and teams work together better.

Loren Feldman:
So you don’t do Fish Bowls all the time, do you?

Chris Hutchinson:
Only with you, Loren. It’s a unique thing that we get to do with you and the 21 Hats community, which is so cool.

Loren Feldman:
I like to hear that. As most of you know, our goal here is to have some fun, to maybe learn a little, but most importantly, to try to help out some entrepreneurs who are facing an interesting challenge. Our guests of honor today are Alvin Elbert and Megan Elbert Perona, who are going to share about A.R.E. manufacturing—more about that in a minute. Chris, do you want to give us a quick reminder of how this works and what we’re going to do?

Chris Hutchinson:
Sure, overall, you’re going to grill—I mean, you’re going to interview—Alvin and Megan and sort of get the basic setup of the situation they’re facing. And as we all know, the presenting situation is usually not the real situation that we need to deal with. This group here will ask questions of Alvin and Megan to help everyone learn more about what the real challenge is. And then after we get that, Alvin and Megan will pick, based on those answers, one or two things they really want advice on. We’ll capture all your great ideas, next steps, cautions, or success tips, and then this group will get to vote them up. So, the most brilliant ideas go to the top. We’ll share those with Alvin and Megan, and at the end, they get to pick however many of those they’d like to implement.

Loren Feldman:
And they’re required by law to implement exactly what they—

Chris Hutchinson:
Absolutely. It’s a 30-day commitment, binding, and we check in on them. [Laughter]

Loren Feldman:
All right, so let’s try to set the scene here a little bit. Alvin, you started A.R.E. Manufacturing in a garage as something of a side hustle, I believe. When was that?

Alvin Elbert:
That was in 1980. I was 23 years old.

Loren Feldman:
What was the basic idea?

Alvin Elbert:
Make business decisions myself.

Loren Feldman:
You’re an entrepreneur.

Alvin Elbert:
I’ve been in machining my whole career. I decided to be a machinist in high school, and I got out in the industry, found out I was pretty good at it, and decided I’d rather make the decisions myself than have somebody else tell me how to do it. So I started my own machine shop.

Loren Feldman:
And it was a contract machine shop from the beginning?

Alvin Elbert:
Yeah, it’s always been a contract machine shop, job shop.

Loren Feldman:
And who are your customers?

Alvin Elbert:
Mostly our niche for the whole time has been dental equipment. Right now, I think 50 percent of our work is for the dental industry. It’s not really the little small stuff. It’s really the bigger stuff. I mean parts for dental chairs, all the big tubes and arms and everything the dentist uses, the lights, all that. So we make parts, components for that.

Megan Perona:
We do very little assembly, or finished-end product. So, we make all of the pieces. Like, when you go to the dentist, the cart where they hang all of their tools on, we make all the individual pieces that go into that cart. We sell them to our customer. Our customer puts them all together, and they sell them to the dentist. And that’s for just about every industry. That’s how it works.

Loren Feldman:
Megan, what’s your role at the business?

Megan Perona:
I do the finances.

Loren Feldman:
And how did the business do, Alvin? At what point did it stop being a side hustle?

Alvin Elbert:
It was a side hustle for four years. We finally got a demo-equipment company that—he was just starting out, and he started growing pretty fast. So I got to where I had to quit my regular job and just do it full-time. That was 1984. We kind of steadily grew slowly. In 2004, we were up to about 25 employees. So we’ve gone up to that, and we had moved from Dundee to our current location.

Loren Feldman:
In Oregon, right?

Alvin Elbert:
Yeah, we’re in Newberg. And we basically had a smaller building, built a bigger building, but we’re still at that same location that we moved to. We moved here in 1987. 2004 was kind of a big year because we actually bought a machine shop in Bend, Oregon and closed that operation down, moved all the work over at our facility here in Newberg, doubled in size overnight, total chaos. It took us about a year to get back on top of it.

But through that chaos, we also started reaching out to different government agencies and community support things, and kind of really changed our whole outlook of how we operated, and how we run our business, and how we get involved in the community. So, the last 20 years has really been completely different from the first 20 years.

Loren Feldman:
What was your best year?

Alvin Elbert:
2022. Everybody was spending their Covid money, so we made lots of parts.

Loren Feldman:
And had your customer base broadened much, or was it still mostly dental?

Alvin Elbert:
It has broadened. I mean, probably in 2004 it was probably 80-90 percent dental. So one of the things was, once we kind of changed our model, and everything was to try to get diversified. We’re about 50 percent right now. I mean, dental is really good work, and we’re good at it. And we’re known to be in that niche, so we don’t mind doing it, but we do like to try to get into some other areas.

Loren Feldman:
And how big was the business in 2022: revenues, employees?

Megan Perona:
I think around 30 employees. Do you know what the sales were back then?

Alvin Elbert:
We were probably doing, before Covid—it kind of goes up and down. I mean, we had a really good year in 2018 because we sold like $6 million. We had 50 employees. Our biggest customer moved everything to China, so then we went back. Covid hit and we went down to about 30 with Covid. In 2022, got back up over $6 million, had 50 employees, but things all dropped off once inflation hit and people got all their Covid money spent. So our sales last year were $4.5 million and I think we have 38 employees right now.

Loren Feldman:
Is that about what you expect to do this year, in terms of revenue?

Alvin Elbert:
Hopefully we do about $5 million, because it’s hard to make a profit if we do less than five. We didn’t make a profit last year.

Megan Perona:
No, we had our worst year ever last year.

Alvin Elbert:
I’m saying last year because our fiscal ends September 30, so our year already ended.

Loren Feldman:
Got it. So you traditionally have relied primarily on word of mouth for marketing, correct?

Alvin Elbert:
Yeah.

Megan Perona:
Pretty much. Back when we were in the garage, we had one main dental customer, and then, the buyer from there went to a different dental company. And so then we picked up some work from that dental company. And then the buyer at that first company, the new guy, went somewhere else and he told someone. And so, yeah, we really have relied on word of mouth for 40 years.

Alvin Elbert:
And we have been fairly successful. We work really hard on delivering parts on time and making good parts, do good quality so we don’t cause our customers problems. So usually they keep coming back. And it’s always been our marketing. Just do it on time. Do it right. People keep coming back.

Loren Feldman:
So what do you think has changed the last couple of years? Have you had a lot of business go to China? Was that part of it?

Megan Perona:
I mean, I think, in the last 20 years, a lot has gone overseas. I think about 2008 was when dental really went overseas. So there’s a lot of parts that we used to make that we will never make again.

Loren Feldman:
What about just the last two years? What’s changed?

Alvin Elbert:
I mean, our second largest customer decided to start selling direct instead of using a dealer network, so they’re making more profit on their units, but they don’t sell as many. Doesn’t help us any because we still sell it for the same price and make half as many parts as we used to. So that one’s really hurt us. But the dental still has been pretty good. I think it basically kind of did a big spike in 2022, and now it’s gone back down to normal. I don’t think it’s much less than that. It’s about the same. Outsourcing to China has always been a big, big issue and problem for us.

Megan Perona:
Yeah, and I think one of the bigger things with that is that we historically did large volume repeat work. And the work that we’ve lost to China is large volume repeat work, because that’s simple stuff that you can make a bunch of somewhere else, and then have slowly shipped back to the U.S. So I think that’s the biggest thing: We lost the bread-and-butter parts, the bread-and-butter money, that we had coming in. That’s what we’ve lost to overseas.

Chris Hutchinson:
So is it okay for me to equip the group here to make sure?

Loren Feldman:
Please.

Chris Hutchinson:
All right, one of the challenges of doing this kind of work in a group like this is that people are brilliant and love to save and rescue others, and that’s not what we’re looking for. This next set of questions really is around surfacing shared clarity—not around your thinking, around the situation. We’re really just trying to understand collectively what’s happening here, because the presenting issue is not always the real issue.

So who would like to go first? Go ahead, Jay.

Jay Goltz:
Hi, Jay Goltz, The Goltz Group. So my question is, I’m trying to get the landscape of your industry. Are there trade shows that one can go to that potential customers are at? Are there trade publications that you can target? Are there email lists and mailing lists? Is there some way of identifying potential customers?

Alvin Elbert:
Hmm. There is some stuff out there. There’s like one trade show. I never really thought it was a good fit, which led me to question whether there’d be enough return on it. I actually went to the show a couple times to see what it was about.

Publications? There are some publications out there to kind of advertise in them. I don’t think it’d be very effective. I mean, there’s some trade associated groups. Before Covid hit, we were part of a couple of trade associated groups. Didn’t really get much out of them, as far as customers. But when Covid hit, we kind of dropped it. We didn’t really have money. What have you got, Megan?

Megan Perona:
I mean, I think the one thing that makes it a little hard is that we don’t have one specific industry that we serve. Because, like I said, we do about 50 percent dental, and then we have like 10 percent aerospace. We do some for recreational, home goods, construction, machine tools. It’s a mix of things. So, I think that is something that we could probably pick a couple that we wanted to focus on and pursue those in that way.

Chris Hutchinson:
Okay, great. Thanks. David, what’s your question?

David Barnett:
I just wanted to ask: What about your equipment or experience makes you so well suited to the dental? And you mentioned a few of the other industries that you do work for. So I guess I’m just trying to think about, or ask, what brainstorming you’ve done about other industries you might be serving.

Megan Perona:
Yeah, we definitely can do good quality, and we can do it fast. I think that’s the biggest thing, especially versus overseas. It’s that we can deliver a job much faster. I think around 90 percent of our customers are here in Oregon. So, I mean, almost all of our customers are close enough that we can drive the parts to them, if they needed us to. So that’s definitely, I think, the advantage that we have. We have the same equipment everyone else has.

We do our hiring and training within the business a little differently, so I guess that’s unique, too. We actually hire with no experience necessary, which is somewhat unique for a machine shop. And then we have an in-house training program, and we teach them how to do it from the ground up. So that also means we use a lot of lean systems for specifically how to set up jobs and how to run them. That kind of lends towards that, too.

Chris Hutchinson:
Great. Thank you. Who has the next question? Josh? Go ahead.

Josh Inglis:
My name is Josh, longtime friend and contact of Loren, back from his reporter days at Inc and beyond. Excited to be on here.

Loren Feldman:
What’s the name of your business, Josh?

Josh Inglis:
Propllr. We do B2B technology communications. So a question I would have, it’s sort of two parts: What is the buying cycle? Like, how far from initial contact to sale? And what steps are in there? Do you have to prove yourself or whatever? And then the other part is, based on an average order, how many new customers would you really need to bring on to have a meaningful growth number?

Megan Perona:
Do you know what the current sales timeline would be?

Alvin Elbert:
Typically, the normal one is, we get a request for a quote. We try to quote it within two days. We get the job. We typically can fill jobs somewhere between five to 30 days, depending on the complexity of the job. If there’s a new company, generally, there’s a certain amount of vetting that gets done. And then, the bigger the company, the more bureaucracy it has, the longer it takes. So for some companies, it might just be a questionnaire and non-disclosure agreement, and maybe in two or three weeks, we’re going. Probably the longest the process has ever taken is about six months, where we contacted and we finally did something for them.

Megan Perona:
And sometimes it just depends, too, how quickly the customer wants their stuff. There’s a new customer who we had been talking to for probably about a month or so, but then all of a sudden, they had a job that they wanted next week. And then it was a very fast process all of a sudden.

Josh Inglis:
The second one, around how many new customers do you think you would need for meaningful growth?

Megan Perona:
It depends on the customer and the parts that they’re making. I mean, if it’s a small company, and it’s a thousand-dollar order, we’re going to need a lot of those. But if it’s a larger company where it has the potential to be we’re going to make the same $10,000 order every two weeks, we’d take one of those and we’ll be fine.

Alvin Elbert:
Breakeven is about $5 million. $6 million is a good number for us to be profitable. We’d like to be $6 million. I mean, 80 percent of our sales is probably five customers, maybe six customers. So it’d be nice to get a couple of bigger customers that are somewhere between $200,000 to $500,000. Now, if we got two or three of those, we’d be in good shape, but we haven’t been able to really get one of those for the last couple of years.

Chris Hutchinson:
Great. Thank you. All right, who has the next question to help us continue to understand the situation Alvin and Megan are facing? Dave, you have another one?

David Barnett:
If you think the talk of potential new tariffs on imports could have any impact on your business.

Megan Perona:
I don’t think it’s coming back.

Alvin Elbert:
I mean, there’s slowly been stuff happening, you know, some reshoring and some things like that. Maybe it might do a lot. Tariffs always have a tendency to affect others, too. So maybe it would generate some work for us, but most likely, it’s going to raise raw material prices and other prices instead.

I don’t know, I don’t see a lot of benefit for us. I’d be more concerned that it would raise our cost, actually. But I like manufacturing. I’ve always thought manufacturing, more of it should be U.S.-based, that we send way too much of it out of the country. So, so if tariffs actually could get more manufacturing happening in the U.S., I’d like to see that.

Loren Feldman:
Alvin, when you’re not competing with China, who do you compete with?

Megan Perona:
Vietnam?

Alvin Elbert:
Now, you may say, locally?

Loren Feldman:
Yeah.

Alvin Elbert:
You know, we’re typically, usually 40-50 employees. It’s not a huge machine shop, but not the smallest either. I mean, we’re a good mid-size to a little bit bigger size. In Newberg, there’s probably 10 job shop, machine shops, at least. We’re the biggest one in town. Most of them are going to be 5-10 employees.

But especially on the dental, I end up competing. I mean, they’re in the same town with all the others. There’s a lot of dental manufacturers in the area. So most of them are doing dental. And, you know, a 50-employee company has more overhead than a five-employee company. Our prices are usually higher, but our delivery is better. Usually, our quality is better. So, we still compete with them.

Chris Hutchinson:
Okay, great. Jay, you have another question?

Jay Goltz:
Yeah, I went to your website. You don’t come up. I took your exact phrase of “high precision CNC machining,” and you don’t come up in the Google search. Have you put any energy into working on getting your website to come up and drive sales?

Alvin Elbert:
We started doing a little bit of it this year. And I think it’s actually a little better, but I was just on a couple of days ago, just “CNC machining Portland.” Now, we’re page five. “CNC machining Newberg,” we’re on the first page. But I think Sherwood, we didn’t show up. I think Hillsboro, we were on the third page. So, yeah, we don’t show up, so it’s definitely an area that could improve.

Megan Perona:
Yeah.

Alvin Elbert:
We agree.

Chris Hutchinson:
I wonder if there’s any other questions. Lena, go ahead.

Lena McGuire:
What terms would you consider your search engine optimization terms? You said CNC machining. Are there other terms that your ideal customers would be looking for?

Alvin Elbert:
Well, “precision machine shop” maybe, something like that.

Megan Perona:
Yeah, I think “CNC machine shop” kind of captures all of it. And then I think the location would probably be the next thing. So Oregon. We’re outside of Portland, so Portland.

Chris Hutchinson:
And Lena, can you throw in your name and your company?

Lena McGuire:
Sure. Lena McGuire, Spoca Kitchen and Bath.

Chris Hutchinson:
Great, thanks. Other questions that would help us understand the lay of the land? Go ahead, Loren.

Loren Feldman:
Could you tell us about some of your other clients? What other industries have you worked in?

Alvin Elbert:
We do a little bit of aerospace. We do a couple parts for a couple of helicopter places, one that actually builds helicopters. The other one makes brain systems for helicopters. So we did some work for them.

Megan Perona:
There’s a company here in Newberg that makes tools for repairing machinery. We make a lot of parts for them. And there’s a company in the next suburb over from us, they have a measuring system unit that they sell, and so we make the pieces for that. They were, for a while, making robotics for building iPhones, too. So we were making the components for them for those.

Alvin Elbert:
The recreation areas. We make all the parts for a paintball gun. We make parts for the boating industry, for particular tournament ski boats. So, we make parts for that industry.

Megan Perona:
There’s also a couple different furniture companies that we make door hardware and cabinet hardware for. So I mean, for the most part, if it has a blueprint, we can make it. We’re not super picky, really.

Chris Hutchinson:
Awesome. Go ahead, Jay.

Jay Goltz:
Give us a breakdown, because I have no clue. Do you have 100 customers? 50 customers? 500 customers? And then, the biggest customer, what percentage of your business is it?

Megan Perona:
I think, in a month, we probably have about 25 to 30 active customers. In the course of a year, it’s maybe closer to 50. And the largest customer, I think, right now, is 25 percent of sales, which, for us, is good. I think in the past, we did have one customer that was 75 percent of sales. So, we are more diverse than we historically have been.

Chris Hutchinson:
Cool. I’ve got a question, actually: How much business do you lose? Like, how much are you, you quote, and you just don’t get it? Versus—

Alvin Elbert:
It’s usually about 30-35 percent.

Megan Perona:
Yeah, so we’re losing 70 to 65.

Chris Hutchinson:
And what’s the main reason people say that you’re losing it?

Megan Perona:
Price.

Alvin Elbert:
It’s probably price, more than anything. But it could be other things, too. And I don’t really think, for the industry, 30-35 percent is that bad.

Chris Hutchinson:
David, do you have a question?

David Barnett:
I was just wondering, you said that the prices you charge are quite high, and the quality of the components you make is also very high. I’m just wondering, what proportion of the total bill is related to transportation? Would you be able to just as easily serve people who are further afield than the people that you’re serving right now?

Megan Perona:
Yeah, we definitely can. When I was saying that we had a customer that was 75 percent of sales, I think the bulk of that was being shipped across the country to South and North Carolina. So we have had customers in other states. We’re not only to Oregon. The only thing is, I mean, normally that customer, they’re going to pay for the freight or the UPS to get it to where they are.

Alvin Elbert:
It does seem like freight isn’t that big a deal. So when I said that we do parts for a furniture company, they’re in Rhode Island. We ship all our stuff to Rhode Island, and nothing seemed to be an issue with them.

Megan Perona:
Yeah, I think the bigger problem is, since we have relied so heavily on word of mouth, is just getting our name into places that are not here in Oregon.

Chris Hutchinson:
Go ahead, Loren.

Loren Feldman:
I’m curious, Alvin, what’s your long term-goal here? Do you have a succession plan? And what are you hoping ultimately happens with the business?

Alvin Elbert:
Both my daughter and my son work here, and so about a year and a half ago, I turned over day-to day-operations. So it’s pretty much now, Megan, my son Troy, and I have a 38-year employee who runs the machine shop for me. But I basically turned over day-to-day to those three people.

I’m a very hands-on person. So stepping away, there’s a lot of stuff I took care of, and now I have to turn it over to other people. Some stuff only happens once a year, so getting that stuff turned over. Basically, in two years, I’ll be 72 years old. The plan is to stop taking a salary and step away even more at that point. But as far as the succession planning, the three running it, they can have it. I don’t really care to sell it for a big ton of money or anything like that. I just want the rent on the buildings, because I own all the buildings.

Loren Feldman:
Do you want the business, Megan?

Megan Perona:
No, not at all. No. [Laughter] Like I said, I will work here, but I don’t want to own it. No, no. That’s a hard no.

Loren Feldman:
Well, what about your brother? Does he want it?

Megan Perona:
Yes, my brother says that he wants it and will take it. So, yeah.

Jay Goltz:
All right, you’re a winner. You got one. I struck out on three. Zero for three. [Laughter]

Chris Hutchinson:
It’s all good. This is a great place, I think, to transition over.

[Loren Feldman Voice-over]
Okay, at this point, Chris asks Alvin and Megan to specify a couple of areas where they would most appreciate some guidance. Once we have that, Chris will lead the group in brainstorming ideas. Chris’s colleague Katie Huey will help the brainstormers post the suggestions on a virtual white board. Then, all of the participants “like” the ideas they find most promising, for Alvin and Megan’s consideration.

Chris Hutchinson:
All right, Alvin and Megan are ready. The answer is:

Megan Perona:
Yeah, we compared notes. So I think we have two things. One of them did come up. So we could use some advice on SEO and fixing our website. And then the other thing, which I don’t think quite came up, but one thing is, how best to use our time and energy? So we only have so much time and energy, and so it’s not possible to tackle all of the different forms of sales and marketing with the resources we have. So which ones would we be—like, should we put everything into just trying to fix the SEO and the website, or just keep focusing on our existing customers? Or try to get national name recognition? So, your feedback on where you think we can get the most bang for our buck, or where, long-term, it would serve us best to put that energy.

Chris Hutchinson:
That’ll be really great. So we have those two pieces. So, let’s discuss the different ideas everyone has succinctly around those different things: around SEO and where to do energy around sales and marketing. Who would like to start? Lena, go ahead.

Lena McGuire:
Okay, so with SEO, what I’m hearing is that you are taking all kinds of work that comes in, and when you’re saying that you are high-quality and higher priced than other people, the first thing I think of is that you have a value issue, in that to differentiate, you should specialize in something that requires high precision and quick turnaround, like medical parts, helicopter parts—things where safety is involved, and that kind of thing. And that would help differentiate you. And once you describe your differentiator, then you can start searching for the SEO terms, because without that difference, you’re just throwing more spaghetti at the wall.

Megan Perona:
Yeah, that makes sense.

Chris Hutchinson:
Who would like to go next? Jay.

Jay Goltz:
I’d like to add to what was just said. I think the issue now is there’s no spaghetti getting thrown against the wall, at this point. There’s virtually no marketing going on. Calling word of mouth marketing is kind of a stretch. So, the opportunity is to to build a great website that talks about those unique selling propositions that she just said about: What is your specialty?

But given that it’s so easy to ship stuff nationally, I don’t think one needs to raise awareness. I think it’s all in getting the website fixed, putting the right content on it, and just sitting back and waiting for people to find you. Because it’s 2024. I believe that if you do nothing more than supercharge the website and get the SEO, I think your problems will go away.

One more thing, quickly: you said you’ve turned over everything. Well, I’m going to go back to the family dynamics. Megan, is that true? Or is he still looking over your shoulder? “No, no, don’t do that. I don’t want to spend the money.” Is he giving you a hard time on stuff? Because I’m the exact same age as he is, so I understand the dynamic there.

Megan Perona:
Well, for the most part. I mean, I think when he said that he would not be day-to-day, he still reserved the right to have the final veto, which—he owns it. So, that’s fair. But no, I think it actually is going fairly well. Like, I hear stories of other family businesses, and I think, “Man, I guess we’re doing pretty good, actually.”

Jay Goltz:
Where’s your brother, meanwhile? Why isn’t your brother on this? If he’s the one that wants to own the business, why are you the one on here and not your brother?

Megan Perona:
It would be hard to fit three people in this.

Jay Goltz:
I’m just saying, he’s the one that wants to own the business. You made it clear you don’t.

Chris Hutchinson:
So, Jay, if I may interrupt, around this thing you’re talking about, is there a success tip, a caution, or a next step you think you’d recommend?

Jay Goltz:
Yeah, someone needs to decide who wants to be in charge and have some authority to make some decisions, because otherwise it’s just, you know, talk.

Chris Hutchinson:
I hear a success tip and caution, two for one. Perfect. Thanks, Jay. Somebody else had their hand up. Go ahead, Josh.

Josh Inglis:
I’ve seen this a lot, where a company thinks it knows why people buy from it, but they don’t really know. They think it’s value, they think it’s speed, they think it’s price, whatever. Do you talk to your customers much, like beyond, “How did you pick us?” And then maybe longer-term relationships: ”Why are you still here? What are you interested in?”

Megan Perona:
Yeah, we do. We do a quarterly review where we kind of randomly select maybe four to five customers who have ordered from us in the last quarter, and then we have a customer service person who is moving into a sales role, who reaches out to the customers and just has a conversation with them about how things are going and then kind of does a summary of it at our quarterly management meeting. So we do hear feedback on how we’re doing, what people like, what they don’t like.

Alvin Elbert:
Some of our customers do scorecards, supplier scorecards. So, we get some feedback that way, too.

Chris Hutchinson:
Okay, great. Thanks. Anybody else? Paul, let us know your name and your company and what’s your thoughts?

Paul Jordan:
Yeah, sure. Paul Jordan, Egeria Group. We’re an investment firm. And I find this fascinating. I think you have a great, really neat company. I guess, I do think that SEO is kind of table stakes. I would agree completely with Jay, as far as that goes. But I thought one other interesting point you brought up was the 70 percent rate of customers that you don’t win the quotes from.

And I was just wondering if it would be worth spending some time to go through some of those lost ones, reaching out. Is there a customer there that you keep quoting, that you keep losing on? Focus on a few of those, or quality companies that don’t need a lot of vetting, that you know are legit to go after. And just a couple phone calls, consistent emails, may go a long way to putting you on top of their radar for the next job they have.

Megan Perona:
Yeah, that’s good feedback too. So, our current employee who we mentioned, who does like a customer liaison role, he’s going down to part-time and is going to retire in the next handful of years. And so we have another employee that we’re moving into that liaison, more sales role. And that’s one of the things that she did. She reached out to—there’s a division within SCORE called MAT, which is like SCORE, specifically for manufacturers. She talked with them about the sales and marketing, and one of the things that came up was making a sales funnel that shows the whole sales path. And that was one thing that came up. There are so many opportunities where we really should reach back out. And reaching out on the jobs that we didn’t get and making a formal process around that.

One thing that’s happened since between when I talked to Loren about this initially and now is that we did start working on that sales funnel. And one of the things that came up was, part of why sales and marketing always got left to the side was that, one, we had enough work that we didn’t worry about it. But two was that we’re really good at processes, and we’re really good at lean manufacturing, and we know how to run a machine and follow a set-up sheet. And we never took the time to make set-up sheets and processes for marketing. So that’s one of the things. And to your point, I think we want to start making a process where this is what we do with every order, because it’s not happening super consistently right now.

Chris Hutchinson:
Okay. David, something you want to share?

David Barnett:
Yeah, I don’t think that you can really work on the website and do SEO or even put content on there that’s going to attract the best type of customer until you really know who the best type of customer is and what they want. So I think you should look at your customers that you’re working with today, that you think are the best customers for you, the ones you really like. And then I think what you need to do is identify some lookalike companies out there that are just like those companies everywhere in the U.S.

And so if that’s in dental manufacturing or aerospace or military subcontractors, whatever it happens to be, you can make a list of these love-to-have clients, and then call up their purchasers and just ask them, “What are you looking for in a supplier? We’re trying to become more adaptable, to be more readily available for companies like you. We want to be able to bid on your next project and make you happy. What are you looking for?” And you can then gain sort of a perspective and feedback on what kinds of things those purchasers might type into Google.

And I’m not 100 percent sure that, in some of these industries, there really are purchasers typing things into Google looking for suppliers. I tend to think that a lot of people are knocking on their doors and that, ultimately, your marketing might have to take more of a sales effort kind of bent, where you’re knocking on the doors of all the dental manufacturers in the U.S. and anywhere else you can ship.

One of the things that drove people to buy from China is, even though they had to pay in advance a lot of the time and then wait six months for the goods to arrive, it didn’t matter to them, because money was so cheap. And today, money is more expensive, and it’s harder to have a whole bunch of money tied up in inventory. Some of the people you used to do work for may be interested in reducing their investment in inventory and goods that are at sea. And so there could be an opportunity for you to do smaller batches more frequently with less investment on their part. I would dust off your records and go knock on some doors of people you used to serve.

Chris Hutchinson:
Yeah. Thanks, David. Go ahead, Jay.

Jay Goltz:
David, that is extremely insightful. You just described my situation. I’ve been ordering from China. Money was cheap. I didn’t care how long it took. And now money’s not cheap. And, yeah, I’ve got too much inventory. So that was very, very insightful and smart. And you’re 100 percent right. There are plenty of companies out there that—the world’s changed. When interest is three, it’s very different than when it’s six. So, I do think you’re right.

Chris Hutchinson:
One of the things that I want to offer—and then we’ll go to Loren—is sort of a connection with some of these. Based on what David said, it’s knocking on the doors. I think you have an opportunity to turbo charge your word of mouth and take that list of those companies you want and go to the people who think you’re great and say, “Who do you know in these companies?” They will make those connections. And that could be a really great way for you to use that word of mouth to get to where you want to go, to do the sort of things you’re talking about. So it’s a twist on what we talked about.

Alvin Elbert:
One of the things it seems like I’ve noticed over the last few years is nobody wants to answer the phone. You can’t actually talk to anybody. They don’t actually answer the phone. You send them an email, they don’t answer the email. It doesn’t seem like there’s communication there as much as it used to be 20 years ago.

Chris Hutchinson:
I think it’s the relationship, because you’ve got to screen out—I don’t know, in my business, 95 percent of the emails I get are not useful. So when somebody contacts me that I know—which is why I’m sharing that tip—I think it would really help. Loren, what is your question? Tip?

Loren Feldman:
Question: I think David made a great point about trying to expand your footprint geographically, looking for customers, and it made me curious. Jay asked you about going to trade shows, and Alvin, you said you’d gone to one. I’m curious, what industry was that trade show?

Megan Perona:
Is it that Design2Part one?

Alvin Elbert:
Something like that.

Megan Perona:
There’s one called Design2Part, which is kind of meant for prototyping and job shops.

Loren Feldman:
I was kind of guessing it was something like that. I’m curious, there’s got to be a national dental trade show where people are looking for work, and maybe that’s the trade show that you should be at.

Megan Perona:
And to be honest, we’ve never done anything like that.

Chris Hutchinson:
Okay, great. Any others? Lena, go ahead.

Lena McGuire:
My tip is to learn to say no to the people who are not your ideal customer. So if you’re taking on these jobs where it’s going to get you a thousand dollars, you’re spending a lot of time. When you look at your dollars per hour for working, you’re going to spend so much time doing these little, piddly jobs that you’re not making room for the big jobs.

So my tip is to learn what job is what you’re looking for, maybe even create a client persona or two or three, and try to use them as gatekeepers so that you’re not taking work that you don’t want. Because the work that you take, people are going to go out and say, “Oh, they do that.” And then you’re going to have more of that kind of work, instead of what you’re looking for.

Megan Perona:
Yeah, yeah.

Chris Hutchinson:
Good deal. Okay, Jay.

Jay Goltz:
I’ve spent money for marketing for 40-some years. I have to tell you, I believe you’re gonna need a mind shift. You’re gonna have to accept you’re gonna lose some money on some stuff. I can see your face, “Oh, the trade show.” You’ve already dismissed everything. And the concept of no one answers the phone? Bullshit! I mean, that is just bullshit. I mean, are less people answering the phone? Clearly! But there’s plenty of people who answer the phone, and the smart companies are still calling up customers.

So, you’ve dismissed, because you’ve got it in your head: No one answers the phone. So that’s off. “Oh, trade shows”—you’re gonna have to try some stuff. And I am confident if someone sat there on the phone all day long, they’d get some people on the phone. And the trade show thing? Yeah, I’ve done some, I lost money on them. I’ve done some where I found one big customer. It’s not a perfect science, is the point. Unlike: You buy a machine part, you buy a machine, you buy a car, you get something. Here, you could blow five grand, like, “Oops, didn’t work.” So you just have to accept that. That’s going to be part of the game.

Chris Hutchinson:
Good deal. Josh?

Josh Inglis:
This might be way too tactical. But as you think about the different verticals you’re in—dental, obviously, and the others—I would start capturing case studies. And case studies can literally be the most basic. They don’t have to be super deep about the whole story of the account and everything that you’ve done, but just something. It could just even be a quote and maybe a picture of the part. Or it could just be a company logo and a quote with an unnamed person, just a head of procurement at this company.

But I would be capturing more of those in those industry verticals, because you don’t know who is—maybe people are coming to your site, and they’re like, “Oh, I don’t see any there. They don’t seem to know my space. I don’t see any evidence of aerospace here, or dental, or whatever. So I’m going to go to some other place that does.” So I think demonstrating you have expertise in these verticals, and some of them sound like they’re probably pretty competitive or they would pay a premium, like aerospace, I think would be a really smart thing to do. And also, when you do that, by the way, you could sprinkle in words like Portland or Oregon or whatever, and all that stuff helps your SEO, obviously.

Chris Hutchinson:
Awesome. Well, I think we’ve done a great job of getting some ideas. Some are in conflict with each other. Some of them are different aspects of this. So, now we’re enlisting the folks who are here in the room to go through. And on the right hand side, you see the little thumbs-up button. It’s basically a “like.” So essentially, the idea is, click on those things you think, this is fabulous, fantastic, helpful advice.

Jay Goltz:
I think everything that everyone said is not in conflict. I think there was some great—I didn’t hear anything that was in conflict, frankly.

Megan Perona:
Yeah, I would agree with that. I think it was all good info. I think, for us, it’ll just be more picking which thing to focus on first.

Chris Hutchinson:
Dave, do you have a comment or question?

David Barnett:
Yeah, I was just gonna say, if there’s a purchaser or someone at a company who you really want to talk to and, Alvin, they will not take your call, they will not answer the phone, I think you should have some guys in your shop do a limited production run of some really unique doohickey that demonstrates the precision and quality of the kinds of things you can make. Not a real part, just sort of a little demo piece that would be like a paperweight, but something that’s really unique-looking and different, so that you can mail it to that person, and you can say, “Hey, I’m Alvin. I’ve been trying to reach you on the telephone. I haven’t been able to. I wanted to send you a little peek at the kind of stuff that we make every day for our customers all across the country.”

And just make that really unique standout thing that they’ve got to handle in their hand, and so that they look at the person’s card, they recognize the number, maybe you’ve left a voicemail, and they can put it all together and realize, “Hey, maybe this is someone I want to talk to.” So I’m a big fan of breaking through that sort of digital wall people have up by sending stuff that they have to actually handle in the mail.

Chris Hutchinson:
So, David snuck that in. If you like that, click on that far right button, little thumbs up button, and we’ll see where that falls. And then there’s gonna be a drum roll really soon here. Anybody need more time?

[Loren Feldman Voice-over]
At this point, the group has reviewed the list of tips, cautions, and next steps and “liked” all of the suggestions they find most promising. Now, we give Alvin and Megan an opportunity to ask the group any questions they may have about the advice.

Megan Perona:
So the one about identifying the best type of customer, I think it’s been a really long time since we actually sat down and actually wrote that down. And so I think looking at that would be a good way to go. And then also, turbo-charging the word of mouth, that kind of goes with knowing who it is that we want to talk to.

Chris Hutchinson:
Yeah, that was a piggyback for sure.

Megan Perona:
Yeah. Oh, and I did really like the case study idea. And I think that would also go with fixing the SEO and fixing the website, too. I mean that goes hand in hand with that.

So the next one about going to lose some money, that one is really hard for me, because I do the finances. And so I look at what it’s going to cost, and then I really question: Is this worth it? Like, should we really spend the money here? And so, I do recognize that that is a problem that I have personally, and I do need to work on that.

I’ve heard many times the theory about second-generation family businesses, like the second generation is usually much more risk-averse than the first generation was, and that is very true in our case. So, I do recognize that we do need to just try some things and accept that sometimes the money part of it won’t pan out.

Loren Feldman:
Megan, does this have something to do with your not wanting to own the business?

Megan Perona:
Oh, yeah, yeah, yeah.

Chris Hutchinson:
Well, I saw Alvin squirming a little bit too. I don’t think it’s a unique thing to you.

Megan Perona:
Well, and then also, as far as the people not answering the phone, that is Alvin’s belief. I agree with Jay that it’s harder to get through than it used to be. But also, the employee who is moving into that sales position, we kind of gave her carte blanche to go ahead and try whatever you want to try. And so I know she has tried just straight cold-calling dental companies. And granted, I think three out of four, no one would take her call. But the last one, they did. Turns out they do everything in-house, but now they know that we exist if they have overflow.

Chris Hutchinson:
Jay, something you want to share?

Jay Goltz:
I will tell you something else. You ever read a sales book? You call someone once? Maybe they don’t call you back. You call them two or three times? They’re going to call you back. You say, “Listen, I wouldn’t be bothering you if I didn’t think—” It’s sales 101. I mean, I think I heard years ago, it takes seven calls to get [a sale]. And in my case, I get very few calls now, because everyone’s got it in their head, “No one calls.” I’m not the only human being that answers their phone. I’m just not.

Alvin Elbert:
I think one of the things about our system, where it is, where it’s at, is, I’m a hands-on person. I’m not a people person. So making the phone call is not something I like to do. If the work came in without making the phone call, that was good enough. But that’s where, if I’m stepping away, I don’t think it’s good enough. They need a better plan. So that’s kind of one of the reasons why, let’s start figuring out how we’re gonna do this.

Chris Hutchinson:
Loren has his hand up.

Loren Feldman:
I have one quick thought. I feel like there’s kind of an elephant in the room. Nobody has suggested that you hire an agency to help you with your marketing, and I just think that’s worth addressing. Have you guys ever considered doing that? And does anybody think they should do that?

Megan Perona:
We actually did work with Kinesis in 2020, and I think that’s how we got connected to 21 Hats, was through them. The thing that happened, I think, what they gave us was really helpful, and we have a stack of copy that they gave us to use. But we never had the bandwidth to actually do anything with it. So, yeah, that one’s on us.

Chris Hutchinson:
Well, how about that second part of the question? Loren, you said, “Does anybody recommend that they hire an agency?” I saw some nodding heads.

Jay Goltz:
Yeah, why reinvent the wheel? Somebody knows how to do this like the back of their hand. Why go figure this out on your own? I mean, I’d be careful who you hire, but clearly there’s someone out there.

Loren Feldman:
Well, that’s a big challenge, Jay. As we all know.

Jay Goltz:
I know it is. I’m the one that—trust me. It makes cringe when I think about it. But I know that there’s someone out there who, in five minutes, is going to do more than you’re going to do in five months, because they do it all day long. But yeah, trust me, I’m extremely worried about hiring those firms, because I haven’t had great experiences in many cases. But they’re in Oregon. People are nicer there, I’ve got to think that they can find somebody there.

Chris Hutchinson:
So thank you, Alvin and Megan, for your vulnerability, and everybody else for sharing your great ideas, because I think this is the spirit of the community and trying to help everybody be better. I’m going to hand the baton off to Loren.

Loren Feldman:
And I’m just going to echo what Chris said. Thank you so much, Alvin and Megan. Thank you for sharing and allowing us to have this conversation. And thank all of you who participated, especially our facilitator, Chris Hutchinson of Trebuchet. I really appreciate it, everybody. Take care.