How ECRM Took Their Business Model Virtual In A Matter Of Weeks
Joseph Tarnowski: We hit a nerve with that because within two weeks of launching it, we had more than 1, 000 buyers sign up.
Dave Knox: I'm your host, Dave Knox. And this is Predicting The Turn. A show that helps business leaders meet their industry's inevitable disruption head on. Welcome to another episode of Predicting The Turn. Today we sit down with Joe Tarnowski, who's the VP of Content for ECRM. Joe, welcome to the show.
Joseph Tarnowski: Dave, thank you for having me on.
Dave Knox: It is a pleasure. So I want to start with a little background for people that might not be familiar with ECRM. Can you tell me a little bit more about the company and the integral role that you play with the retail and CPG industry as a whole?
Joseph Tarnowski: Sure. My pleasure. And it's a little complicated. So we've been around for 25 years and basically what we do is we drive efficiencies and effectiveness into the buying and selling process for our retailers, for our food service operators, for pharmacies and medical markets, as well as those suppliers who serve them. So primarily, consumer packaged goods companies. And we do that in two ways. One is through our programs, which are category specific. Private, pre scheduled, face- to- face meetings, which are in- person as well as now, virtual, which we'll get into a little bit later and related services around them. So now you notice I said programs, I don't say events because we're not an event company, especially in a traditional sense of, let's say a conference or an expo. We're nothing like that. Even though we have in- person meetings where we bring these buyers and sellers together, it's completely different. The format and the process of what we do is a little bit different. And we cover all different categories that let's say you would see in a CVS or a grocery store. Basically we break up into four divisions across the company. We have our grocery division, which includes categories like snacks and beverages and candy, as well as the food service offerings. Then we'll have general merchandise, which focuses on products, categories like pet, school and office supplies, toys. Then we'll have our health and beauty care, which focuses on skincare, bath, cosmetics, vitamins and supplements, things like that nature. And then we have our pharmacy and medical markets, which is branded pharmaceuticals, generic pharmaceuticals, diabetes products. So we have about 100 of these programs and we have international as well. So we have an Asian beauty. We have about a dozen programs that are in Europe as well. So the main goal is to get these buyers, give them access to brands, emerging brands they've never seen before, help them with their category planning. And as far as the suppliers, we're giving them access, getting them in front of these buyers at scale, that's the main thing. Anybody can have a meeting, any supplier can go and find a buyer and set up a meeting, but we're giving them the ability to do this at scale in a condensed amount of time. Within two or three days, you're having anywhere from 50 to 150 meetings depending on the category. That's one aspect of the business. And then the other aspect is the RangeMe product discovery platform, which is, think of like a marketplace. It has several thousand retail buyers and more than 200, 000 suppliers, a lot of emerging brands. And RangeMe also serves as the inbound product submission platform for most of the largest retailers in the country. So for example, CVS, if you're a supplier, when you'd go to their CVS website, you click the link to submit a product for their consideration, RangeMe handles the backend of that. You know, you upload the product information, build a profile on RangeMe and then it gets routed to the appropriate buyer. So between both ECRM and RangeMe, which RangeMe we acquired almost exactly three years ago, next month I believe will be three years. And so they both work in tandem to kind of bring these buyers and suppliers together, again, in a really efficient and effective way.
Dave Knox: So I want to touch a little bit more on that, the RangeMe acquisition. Because you guys were doing these great programs, you're a industry leader, and then you made a move three years ago to invest in a digital future, which is proving very wise today. Why was it that you started thinking about digital back then?
Joseph Tarnowski: Well, exactly what you meant. We were looking towards the future and originally we were going to build our own digital offering. We wanted to build our own digital platform for connecting them because that would compliment our business. Obviously, everything is going digital. There's so many opportunities in digital, not that face- to- face is going away, face- to- face, in- person will never go away, though it's going to fundamentally change after this whole Coronavirus pandemic. However, we did recognize that digital is going to be an important part, so we figured it was a lot easier to acquire the best in class platform that was out there rather than build our own from scratch. RangeMe already had the reputation, they were very well known. They had a great platform. So why duplicate the process?
Dave Knox: You mentioned what we're going through right now with COVID- 19 and obviously that's had a big impact on anybody that's in the world of face- to- face meetings. How's ECRM, and obviously through RangeMe responded to these kind of crazy times that we're living in?
Joseph Tarnowski: That's where all the excitement's been in the past few months, it's really been interesting what happened. So once we started seeing the warning signs, right, when the major industry expos and events started canceling or postponing, and we knew, okay, all of these buyers, they had travel restrictions, you know? So we saw that there were three really big pain points in the industry brought on by the pandemic. Two of them on the buyer side and one of them on the supplier side. So on the buyer side, one, travel restrictions. They couldn't visit, they couldn't go to shows, they couldn't visit with suppliers, they couldn't have suppliers visit them. Number two was time, lack of time. Everybody in the fast- moving consumer goods industry was overwhelmed with this panic buying and maintaining their supply chains. And even if you weren't in one of the essentials categories, you were helping people who were. I have heard stories of some retailers that, senior executives driving trucks. They would rent out trucks and they're driving trucks just to help keep their stores supplied. Everybody was in a scramble. So there's no time. And again, they can't travel. On the supplier side, you had a lack of access because of that. They can't get in front of these buyers and they needed to. Plus, on top of that, and this is probably pain point number four, on top of that, you had the traditional supply chain and the traditional suppliers were running out of stock on all of these items. And it was no fault of the retailers or the buyers or even the suppliers. It was just overwhelmed, the system was overwhelmed. Even if they had stuff in their warehouses, there was not enough drivers to accommodate the need. So they were scrambling to find new brands that can kind of fill in the gaps of those out of stocks. So when we, as a company, we stepped back and we look at that in our conversations with buyers and suppliers, we realized that because we already have our format and our process of working with the buyers and the suppliers, as well as the RangeMe platform, we could step in and help right away. And I was even amazed at how fast our team was able to do it. So the first line of defense, the first line of action was actually RangeMe, where RangeMe worked with some of its enterprise partners, now those are those partners, the retailers that have the RangeMe link on their site, and RangeMe handles their inbound product submissions. What they did, and we're talking probably within the first couple of weeks of March, just when the quarantine was starting, they worked with some of these, probably eight major retailers to do what they referred to as like product review days. So for example, Fresh Thyme is one of them. Fresh Thyme Farmers Market is one of them. What they did was, they announced it early, that all of you suppliers that are out there that couldn't get in front of these retailers because of these trade shows closing, you could submit your products to Fresh Thyme Farmers Market through this link. And then at the end of the month, all of their buyers are going to spend a good portion of a day dedicated to just reviewing those products submissions. So that was the kind of the first thing that was happening on the RangeMe side. And then on the ECRM side, what we started doing was, what can we do to help the buyers access and find these new suppliers to help them with their goals of filling in the gaps? And so we came up with what was we refer to as our efficient supplier introductions. So what that is, it's kind of a one- to- many presentation where we have up to 20 buyers, and again, they're category specific, and we started with the essential. So hand sanitizer was the first one. Paper goods, things like that. But I think we reached up to 80 different categories over the month of April. So what it is, is we had 20 buyers and then there'd be 10 suppliers. And over a two- hour period, each supplier gave a 10- minute presentation to that panel of buyers. And we hit a nerve with that because as soon as, within two weeks of launching it, we had more than 1, 000 buyers sign up. And we're talking, a lot of buyers, maybe from one national grocery chain. For example, you had one buyer jump on the first one, then two days later, we had 30 buyers from that retailer sign up across the categories. Because all of a sudden the word got around," Hey, look, you can go here and find some products. You can find these products that we need." So the efficient suppliers reductions worked very well. And in our feedback in talking to the buyers who participated, we learned that, they love them, but they would also like something a little more akin to our in- person experience with the one- on- one interaction directly with each supplier, rather than as a group. Now, in the ESIs, they still had the ability to submit questions. They would do it through the chat and then one of our client success managers would moderate it and ask the supplier the questions. But they wanted that one- on- one experience and the suppliers were looking for that too. So that's when we actually launched our virtual sessions. And what the virtual sessions are, it's basically the same format and process that we use in person, but with a customized, digital meeting platform layered on top of it. Because for every one of our sessions, now the sessions are the actual meetings themselves, and when you hear me refer to program, the program is the before, during and after services. So whenever a buyer registers for one of our programs, let's say cosmetics, fragrance, and bath. So let's say CVS buyer registers for that. They're immediately assigned a client success manager. That client success manager will have a consultation with them, learn their needs and objectives, what their goals are for that category, for that category growth. At the same time, they're doing that with the suppliers. On the supplier side, a supplier registers and a client success manager is going to learn what their products are, what categories and segments they address, what their capabilities are, their distribution, any certifications, anything that the buyer would need to know. And then as we get closer to the actual session, right? Which is that meeting, whether it's in person or virtual, they curate an appointment schedule that is completely relevant and as perfectly matched as possible. So that both the buyers and the suppliers get the most out of their experience, no time is wasted. We don't want to match somebody that's not a fit. So we do all the work to make sure that there's a fit between each buyer and seller and we curate that schedule. And then in subsequent conversations with the buyers and suppliers, we keep reformatting, revamping those schedules until we have the optimized one. So the only difference now is, in the actual session itself, normally it's in- person, at a hotel with the suppliers having meeting spaces that are either rooms, right? We'll take the bed out and put in a meeting table, or they'll have 10 by 10 booth space where the buyers go from meeting space to meeting space, to meeting space for private meetings that are completely dedicated to each supplier during that time. And they're highly managed. Nobody misses a meeting, all meetings start and end on time. Well now, that has been ported to the digital format, but everything else is the same as far as the underlying process, and the format, and the customer service, very high touch customer service, but now we have the digital interface, which gives them the ability to have these meetings, to do the same thing. They could take their notes, they can view the products, if they need help, there's a button they could click for help from one of our guys who are always on hand for them, the same way we'd have them in- person they're on hand for them. At our in- person sessions, we have client service representatives that are stationed around each few meeting spaces to make sure the meetings start and end on time. If somebody misses a meeting, we track them down. The whole goal was to have every supplier meet with every buyer that's on their schedule and that happens at every single session that we do. Online, virtually, it's going to be the same exact thing. So we were kind of unintentionally set up for this happening. With our process and format, all we had to do was just layer the technology on top of it. And the technology is a version of an app that we use, the buyers and sellers use, at the in- person meetings. So it's just facilitating the virtual meeting component, everything else we really did not have to change other than altering it for a virtual environment, as you saw, when we did the demo.
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Joseph Tarnowski: You know, I think you nailed it by saying culture. The one thing, and I've worked for a lot of different companies over my career, the one thing that really I can attribute this to, sure the tech is one thing, the process and the format's one thing, but the underlying ECRM culture is really what separates us from any other organization I've worked with in my life. And there's a several factors that contributed to the way they can just work together so well. And again, it goes back to 25 years ago. A lot of the people within the company have been recruited directly from other people within the company. So whether they're relatives or friends and so you bring a friend in, right? If a friend hires me, I'm going to work my butt off to make sure that I don't make my friend look bad. Right? And multiply that by 100 or 200 instances over the years where you have a lot of trust, you have that ability to work together almost at a point where you can read each other's thoughts. There are some people... The other thing is, a lot of people have grown up in this company. A lot of the senior executives have grown up within the whole company, starting as maybe a client service representative at one of our sessions, and then becoming an account manager, then a director of sales. Like for example, Sarah Davidson, who is our Senior Vice President of Grocery, I believe she started as an account manager and has worked across most of the categories, most of the divisions in the company as she made her way up to leading the grocery category. So you have so many things like that. And the culture is also a true team, where if something happens, everybody drops everything and pitches in, straight up to the CEO. I've seen Greg Farrar, CEO, helping carry boxes and moving stuff in our sessions. I mean, it starts from the top and resonates throughout the whole company. One instance, just to give you an anecdotal instance is, we had our beer, wine and spirits and on- premise adult beverage sessions going on in Orlando once. And part of that is what we call the Grand Tasting Awards, where we put out about 90 high top tables and each of the beverage alcohol suppliers, puts out their products and everybody is invited to come and taste and vote on it. So we had it all set up outside and then we had a storm that came out of nowhere. It was not on the weather forecast, nothing, it was supposed to be beautiful. All of a sudden we got hit, everybody throughout the organization who was there, it was all hands on deck, ran out there, got soaked, grabbed the tables, moved them, shifted the whole thing inside. Within 15 minutes, we were continuing the Grand Tasting, only inside. And there's so many instances of that, where the company is able to adapt and turn and quick. And we kind of foster that kind of action within the company. It's more like, okay, if you think it works, give it a shot. If it doesn't work, or if something doesn't work, we iterate. Get the feedback from the market, apply it. And even in our process at our sessions, every single session we have, what's called an exit interview. So we will meet, one of our staff would meet with every buyer and every supplier participating, and have a 20- minute discussion with them to just purely to get feedback. All of that feedback is entered into our app, right? We have a special app on an iPad. And then at the end of each session, we have a meeting called correction of errors, where we take all that feedback and we put action items against that, and then it's applied to future sessions. So the whole company just has that culture of constantly taking feedback, applying it to the business, moving and growing at each step along the way. But one thing we don't do is, have meetings to death. We won't have 10 meetings before we launch. We'll get going and then we'll iterate along the way based on feedback from customers and just trial and error. And it's enabled us to really, really move quickly in every single area of the business.
Dave Knox: At the moment in time, everybody's kind of hypothesizing what's going to be the new normal. How are industries going to change, what's going to evolve, et cetera. You guys are living and breathing it with the virtual programs and what you're doing. What do you think the role of virtual programs is going to be going forward? And how do you integrate that in when we are back to maybe doing one- on- one live events, again?
Joseph Tarnowski: That's actually been a big discussion point with the team and it is, virtual is here to stay. It is not going anywhere. It is going, like you said, it's going to be part of the new normal. There's a few different ways to look at it. There are several of our programs, the in- person ones, that we have kind of identified that will probably never go away as far as the in- person setting. Because not just for the meetings, but it's like, they're known for the place where everybody wants to gather for that category, right? We've identified a bunch of them throughout the schedule, where we just know people love meeting in person at these. It's the highlight of the year. However, there are some other sessions that maybe don't have that kind of excitement around it, or they're smaller, which will more than likely stay virtual. Because the mindset from what we've been talking, what we've been hearing from retailers is that, they're going to be traveling a lot less going forward. They're still going to travel, but they're going to pick their spots. So they're going to say yes to certain things, they're going to say no certain things. And so that's also going to help us determine which things to keep in- person, which ones to keep virtual. But yeah, there definitely will be a mix plus the ESIs that we did since they're a smaller version, we're going to incorporate those with both the virtual sessions and the in- person, because we try to schedule our sessions around the times when the buyers are doing their category planning. But the ESIs will be great for example, for a midyear review. Where maybe they don't want to have all those meetings that they would at one of our sessions, but they kind of want to find new products for a re- fresh. But when they're doing their planning, they're going to want to meet face- to- face. But for the re- fresh, any ESI might be good. So we have some that we have identified that are likely going to stay in- person no matter what, once this is all done and we could get back to traveling again, but then there are some where it could go either way. And we're really going to let the market determine which way. If they really are fine doing it virtual, well sure, we'll do it virtual. It's easier for everybody. There's so many less moving parts in terms of getting there and coming home and digging out from that. But then, like I said, there are some where, people really like the social aspect of it and getting together with... And it varies from category to category. Each kind of category has a different, I guess, personality. And some are more about, they want the meetings and they want the social part. Some of them are a little more about just the meetings. So there's going to be a few factors and we're not there yet, but those are kind of the things that we're going to look at when we kind of determine. Once we do get past this and it is okay to travel, some are going to stay virtual, some are going to be in person.
Dave Knox: That's a really interesting viewpoint. And you mentioned that you're not an event company per se, but you guys have a great expertise in events. What do you think is going to happen to the industry? Because when I hear what you described as those must go to event, et cetera, that sounds like the CSs, and the South by Southwest, and some of those other big ones. Do those stay the same and it's maybe the tertiary events that are going to have a real struggle? What do you think plays out?
Joseph Tarnowski: Well, for one thing, I think at least, minimum till we get a vaccine, any place where you have those massive get togethers of 50, 60, 80,000 people, it's not going to be the same. They're going to be, on the one hand, there's probably still going to be social distancing restrictions, but on the other hand, you're going to have people that are not going to want to be around crowds. You'll have, especially people who don't know if they have the antibodies, like maybe I had it, a mild version. Do I have the antibody? Do I not have it? Do I really want to be around somebody? What if this flares up again? There's still way too many unanswered questions. So any place where you have a big gathering like that, it's going to be impacted for a while. They may still be able to have it, but there's going to be social distancing, whether it's by regulation or just by people wanting to maintain social distance. And I just can't see, I'm a hugger myself. So for me, going to an event where I can't shake hands, and hug my friends and be close to people, it's really not going to be the same. There's an intimacy that's not going to be there. And so it is going to really change the way they interact. And unfortunately, a lot of the major shows in this industry are that trade show, expo format with 1, 800 booths and massive audiences sitting close together for their different events. And they're really going to have to rethink the way they do those. And then that's why I said before is almost, we kind of unintentionally were able to make this pivot because by nature, our programs, our sessions are smaller. We're only bringing the relevant buyers for the category, the relevant suppliers for the category. So the total audience is maybe 600, right? That's why we'll have 100 of these during the year, but our total audience is small. So even in person, we would be able to kind of manage that with those social distancing requirements. But how do you do that with an 80,000 person event? That's going to be very tough. And then it's the sponsors of those events and the participants, the people are paying to go there, what are they going to think? And they may just opt for something virtual instead because they're not going to get what they got from in- person for a while. At a minimum, until there's a vaccine and we can be sure that nobody's going to get it.
Dave Knox: So, final question on that COVID related note is, ECRM has been around for 25 years. You guys are not new to any of this stuff, but the last decade has really been the rise of discovery when it comes to new brands and emerging brands, challenging the status quo. What do you think happens over the next decade? Are we going to see that continue to amplification of new brands and new things? Where do you see the industry heading?
Joseph Tarnowski: You know, I think it's actually going to accelerate and the whole Coronavirus pandemic is one of the reasons why. Because, when you think about what's happening, right, if I'm looking for the products that I'm used to getting, let's say staples. They ran out of... Here's an example. I was talking to a retailer that has an online marketplace, and in the store that retailer ran out of rice. So I'm going to that retailer's website, or I'm going online and I'm not finding any of the traditional, regular rice companies that I would normally see in a grocery store, but I found this artisanal rice that is a startup brand. That's maybe local or something. So I get that now because of necessity. I want my rice, this is the only one that's available. It's a new vendor, it's a new brand I never heard of, and then I get it and I love that rice. Now, all of a sudden that opens me up to, Hey, you know what, maybe there's other new brands like this, that I just didn't know about, that I should start exploring. And that's happening across different categories. As you get out of stocks, in what people are usually buying, and they're forced to go to new and emerging brands, it's forcing trial and people are going to get exposed to all of these new brands that they've never been exposed to before. And it's going to change the way they shop, because they're going to get used to it. They're going to be shopping more online where a lot of these emerging brands are. And I think that's just going to accelerate it, because they're just getting the exposure that they never would've had before if they just continued shopping the same aisles, in the same stores and all that.
Dave Knox: I love that. Well Joe, it's always a pleasure to sit down and talk with you, and that was a fascinating conversation. So I really appreciate you taking the time and I can't wait to see what the virtual programs have in store for us over the next few months.
Joseph Tarnowski: I'm looking forward to it as well, but thank you so much for having me. I enjoyed talking to you.
Dave Knox: Thanks so much for listening. If you like the show, hit that rating and make sure to subscribe so you don't miss a single episode. And for more resources, head over to predictingtheturn. com.