Kevin talks about how Thermory USA was introduced into the North American markets and the challenges he faced, how product education and innovation have supported their rapid growth, and how truly understanding his customers needs has led to more successful and measurable marketing activities.
Episode Links
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Episode Transcript
Tim
Welcome Building Brands listeners. In this second episode, I have a conversation with Kevin DeMars, who is a Principal, and the Creative Director for Thermory USA, the North American division of an international, thermally modified wood company, based in Estonia. Kevin talks about how Thermal USA was introduced into the North American markets and the challenges he faced, how product education and innovation have supported their rapid growth, and how truly understanding his customers needs has led to more successful and measurable marketing activities. Enjoy the episode. If you’re an owner or marketer in the building materials manufacturing, distribution or contracting spaces looking to set up your brand for success now and in the future, this is the podcast for you. On this show we talk about brand and market strategy used in the real world that grow companies and truly connect with consumer audiences. So sit back, listen in, and let’s get to it. Welcome, Kevin DeMars, the Creative Director and Principal at Thermory USA, which is part of Thermory, which is based out of Estonia. Disclaimer, Thermory USA is a Luminus client, but because we love Kevin so much, and we love Thermory so much we’re putting him on the podcast. You get to be my second guinea pig. Mike was my first guinea pig. So why don’t we start with the easy question, which is? Introduce yourself a little bit of a background about how you got into the industry and how you ended up as the principal of Thermory USA and bringing a new product into the U. S. Market.
Kevin
Sure, it was totally by chance, completely by accident. There’s a saying in the wood business there, the building industry that nobody does it on purpose. It’s all by… it’s either accident or family, and mine happened to be family. So my mom worked for a hardwood custom hardwood door company back in the eighties and nineties. And then I started working there, sweeping floors, emptying garbage cans, helping about trucks when I was 15-16 years old. So I’ve, despite being 40, I’ve been in this business for what’s that 25 years. So, yeah, I was going. I started going to college for physical education and about a semester in, I went to work one day and my mom and I would cross pass and she’d ask me about my day, how you know what’s going on. Whatever, so I worked the night shift. So one day she asked me what classes I was signing up for the next semester and I said none. I want to be a woodworker and she has only sworn at me a few times in my life, and that was one of them. She was not pleased with my decision. So I told her I said, I don’t want to you know, I’m not just gonna be a labor guy in the shop. That’s just, you know, taking orders. I wanted to be somebody that’s making orders and doing something and making waves and changing things. One day. I don’t know how are when or the means to be able to do that, but I knew that somehow someday was going to and yea here I am.
Tim
Similarly, in the creative industry, none of us decided, like, immediately that we were going to be business owners. We were just very good at being a creative and then ended up having businesses. So that’s a very familiar story. Before Thermory you had another company that was involved in building materials from a little bit of a manufacturing standpoint.
Kevin
I did, Yeah. It was, uh, moldings and drawer boxes. Actually, when I was I was working at the door company and my mom was trying to fire me slash boot me out of the nest. I ended up. She end up sending me to an interview at this place. I walked in and I had a hoody on. I had dust coming out of my pockets. I had contact cement all over all over the front of me, and I thought I was going in for a shock position and they were asking me questions like, you know, have you ever quoted before? How do you do with customers? And I thought, I have no idea. And no, I never do with customers. But somehow or another, they thought, Well, he seems like he’d be good at sales so, let’s hire him, even though he’s 22 with no experience. So I That’s how I got into the office in the front and side of things. And then I just really quickly figured that this was being in sales and being in a position where I can actually control the direction of the company. Was it was a pretty fun thing.
Tim
That was sort of what led you into the Thermory situation. I mean, you were sourcing materials and helping with that a little bit for the that manufacturing company.
Kevin
That’s a really long story.
Tim
What’s the short version?
Kevin
With the short version, which I could probably keep to under 90 minutes, I was importing drawer components from who is now another partner in the company, Mark Challinor, and that drawer business for us went south and we had some time and Resource is in our hands to try and figure out how we’re gonna replace that business. And Mark had had a previous relationship with these guys in Estonia that we’re doing this for those of you can’t see me, I’m using air quotes, “cooked wood” stuff, we had no idea what it was. Never heard of it. And I had samples that sat around for a couple year, but we eventually lost that that drawer box business and when we looked for something else to do this “cooked wood” stuff came up, and then the rest is history there.
Tim
And that’s one of those things where you lost an opportunity, but you gained a big one. Just the the universe works strange that way.
Kevin
Yeah. I wish you that the universe would just give you a little kiss on the cheek once a while and say “don’t worry, It’s gonna be okay, because I was…
Tim
Trudging through some mud to get to the good stuff. So now you’re one of the principals of Thermory USA. What is your role generally in the company? How long have you guys had that company established in North America at this point?
Kevin
We started Thermory USA in 2011 unofficially, but 2012 officially. We launched the product in the United States at the International Builders’ Show in Orlando in 2012. Back then, I was doing all sorts of stuff. I didn’t know that I was doing the marketing, but I was, I would say a part of it for the US side of things. I was involved in sales, travel, helping out with product development. We’re just kind of doing what what needed to be done. And I don’t know if I could have defined the role at that point, but over time it’s evolved into me becoming essentially the North American Creative Director, and, uh, I’d say probably Head of Operations, you know, controlling the budget, trying to give directions to where we need people who needs to do what picking our team, you know, kind of giving some course direction to the company. But I would say that the role of Creative Director is probably most appropriate and fun, uh, aspect of what I do. Helping Luminus give them some direction the image of the company, marketing materials, brochures, images, campaigns, etcetera and also getting involved in the product development side of things.
Tim
The unique thing about where you’ve been up so far with Thermory USA is two things. That brand didn’t exist in North America at all.
Kevin
Not at all.
Tim
It’s European by nature coming out of Estonia, and it’s been there for a little while prior to when you guys picked it up for here. And also the thermally modified would category had its own trials and tribulations through the nineties. Yeah, that it also had to overcome to. So you had bringing a brand like that over to North America. What were some of the initial hurdles that you faced when you initially did that? To launch it the first time. I mean, you’re starting a new business. It’s a product no one knows about or has a slightly tainted reputation from past experiences with other brands.
Kevin
And see, that wasn’t hurdles. It was more like moats and nuclear bombs. It was really bad.
Tim
Stage five.
Kevin
Yeah, it was totally stage five. There was another company that introduced thermally modified wood into the market. They were huge factory. They put a ton of product out. They had a very large distributor behind them and they made a horribly manufactured product. And they sold it in the worst possible ways. They gave it attributes that that wood could never possibly have. So we were battling. You know, nearly every lumberyard that we went into had said “Yes, we’ve heard of that. This product. Please leave. I don’t want to talk to you. That product sucks. It’s gonna fail.” It was concerning for me because I was a little bit going out on a limb trying to appreciate that this product actually does work based on what our European partners say.
Tim
The wood scientists.
Kevin
The wood scientists. Yeah, but they had success. This company was a flash in the pan, you know, the company in the US was a flash in the pan. The product was a flash in the pan. It was put out on mass quantities, large scale, large volume very quick, very fast and failed very quickly. My partners in Estonia had been up and running for, I think, probably about 10 or 12 years at this point. So there was already a track history that I was leaning on, hoping that there wasn’t something in the air and Europe that made the product work that, you know in the US wasn’t the case, but it worked.
Tim
So you’re bringing this brand over. It has a little bit of uh stigma attached to it with past performance of products that have been introduced prior, you have two challenges or two objectives you need to accomplish. One is educating the public on what the new techniques are and how it differs from the past. And then also, what is the product, and how does it correlate in the market against things like composite or just pressure treated?
Kevin
Yeah, we had to educate people on a product that already had a bad name and put it up against a product that people liked to begin with. So the product that we really competed with initially was tropical woods, specifically ipe. It was known as a mildly expensive product with, at that point, pretty decent performance. So we were leaning on the fact that thermally modified ash was gonna be a product that performed better but inherent for some reason. People don’t understand that if a product is better, it should cost more, and our product inherently, was more expensive. So trying to justify that they should try this new product that nobody’s heard of that has a bad reputation, but they should pay more for it, was a pretty that was a hurdle to go up against.
Tim
A lot of that comes down to a little of the work that you had done even prior to working with us. But a lot of the brand positioning and the brand presentation. You’ve always been doing things like shows like IBS. You’ve had marketing campaigns in the past. You’ve introduced multiple products over 8 to 10 years. So far. How have you organized being able to do all of that at the same time and where you’re trying to go with that is grow sales, create an image for yourself, dispel the myths of the of the products of the past that you weren’t associated with that could be hurting what your new image is,
Kevin
I think I leaned on. There’s two things I think that by nature we happen to make some decent marketing decisions, not by choice, but by happenstance. I think some of us in the company make, are natural marketers are, have an eye for marketing for advertising, for things that look nice in an advertising world. And then also, I remember having a conversation with somebody about the price of our product that gave me a little bit of courage to say “You know, our product does cost a little bit more and I don’t have to hide from it.” And he said, “Well, listen, all these things you’re telling me says that the product is better, so it should be more expensive.” Right? If you’re gonna if you have ah ah, Volkswagen Beetle versus a BMW. Which one is gonna cost more? So that gave me some confidence to appreciate that week. We can we need to do things to be able to justify our price and the only way you can do that is through the marketing.
Tim
Building up the image understanding here, talking to you. We did some brand exercises where we really dove deep into particularly the architects of the homeowners for your side, and tried to understand the things that they would actually want in their research experience, especially from the education side, maybe even just for making their jobs easier. We poked and prodded you pretty hard for a couple weeks or more.
Kevin
Exhausting, exhausting.
Tim
How have you seen going through a process like that benefit what your marketing efforts and even your sales efforts have been over the last couple of years we’ve worked together?
Kevin
It’s the backbone of everything. I mean, understanding our customer is everything. I mean, I think a lot of people think that branding and marketing is on. Sorry, don’t mean to steal some of your words here, you guys, maybe you guys have told this things things, but you know, a logo and cool colors and a decent looking brochure is not branding, and that’s not marketing. I think branding and marketing is really, truly understanding your customer, and I think we’ve always understood our customer but actually applying the logic to make it a science is really what makes a difference.
Tim
Yeah building out some actionable steps that you can. You can identify what their needs are and pair something that you can physically do or create for them…
Kevin
Exactly.
Tim
…to move them along in their research or project planning. I mean, if you can help someone like an architect plan and scope their project quicker, that leads to a sale quicker, gives them confidence to work with you as someone that knows that they would want something like that to make their jobs easier. Now they’re getting a great product, great look, great feel and great service through some of the things that you’ve identified, working with someone like us, to figure out what those needs were based on their pain points for their audience profile.
Kevin
Yeah exactly.
Tim
What do you think the most important thing that you realized needs to be considered for launching an international brand in a new region?
Kevin
Appreciating the experience that the founding company has has gone through. What they’ve done. You know what they’ve done over the years and the success that they’ve had. It’s important to understand their story and where they’ve come from, the fact that they have they’ve had hurdles, a as well, but understanding, really one of the world. What are the different customer types between, you know, in our case, North America versus Europe? Uh, the pain points for customers in Europe versus the pain points for customers in North America could be very, largely different. And our experiences in different areas around the country can be different. So it’s It’s not a one size fits all when it comes to marketing or products. You know, the Europeans that fellas from Estonia they couldn’t understand why thermally modified products had such a bad reputation. You know, another another. Another point to is that they did not want to work with distributors distributors who would then sell to, uh, lumber yards. And in North America, it’s really the It’s largely how building products are sold throughout the United States. A distributor buys them from a manufacturer, then sells them to a lumber yard, who then sells them to the contractor. And it appears that that’s a makes for a highly inflated price, but definitely not the case. All of those people are buying in appropriate quantities that make the economies of scale work out just right so that it does make the product affordable and nobody’s paying too much or too little and down the chain. So you know the route to distribution the companies, product performance in history and all of those things have to be considered. But again, going back to what we just said a few minutes ago about understanding your customer, appreciating that customers in North America versus customers in Europe may have different different histories is really important, to how you gonna market product?
Tim
Yeah, And their attraction points were slightly different to you, We notice in Europe they actually cared more about the green aspect of the ash versus tropical…
Kevin
Yes
Tim
…in America. Partially because tropical became the standard when thermally modified would failed the first time.
Kevin
Correct.
Tim
But also, you know, it was slightly cheaper and really in America, we’re so capitalized that costs can win the day. Sometimes you really have to build the messaging apps to persevere behind. Beyond that,
Kevin
People are screen as the money that they’re carrying.
Tim
Yeah, Yeah, I think that was what we were throwing around. We’re talking about that. So in addition to you actually bringing the brand itself and the product over. One good thing about what Thermory is doing is they’re always releasing new products into the market, whether it’s through acquiring other products in and making improvements to them, or actually innovating and developing their own products, whether they launch first in Europe or in both markets and regions at once. How do you think that the brand strategy and marketing play a role in getting those products organized and ready to go to market successfully?
Kevin
I think if we’re going to be, you know, again going back to our product is more expensive than most products out there and we just have to justify why and our marketing is, is doing just that. It’s justifying the cost, you know. Part of that justification is communicating that we’re leaders in the industry we’re leaders not just in the therm of modification but were leaders in design trends, keeping up with design trends, installation methods on. We’re considering, you know, everybody from the homeowner, the architect to the dealer of the installer in that channel and making it easier for for everybody. But new products are everything and they’re what keeps a company fresh and new and how to how to package up a brand new a brand new product and communicated it to a very large number of people and not worrying about the inventory investment that we’ve had to make sure that we can justify the marketing that goes behind it. It all comes back to understanding the customer and laying that message out for them.
Tim
Now, when you’re introducing that many products, you run into a scenario where you have multiple styles, trends, materials, applications. What sort of benefits have you seen from some of the product organization and even branding the categories themselves, and not just the products?
Kevin
I think we started to understand recently that when people are looking for products, they’re looking for style trends and people don’t necessarily know what products fit in those style trends. So we need to be able to communicate to them and visualize for them where our products can be used. And you guys at Luminus have helped us demonstrate through customer research that this is how people search for products, keeping it super simple for people.
Tim
And in terms of bringing the products to market. You know, you were saying how it’s important to always be introducing new products into what your catalog has within it. What role does that play in making sure that you’re able to grow the company and increase sales? Does doing that, just increase sales because there’s more products that does it affect everything as a whole?
Kevin
I think it affects everything as a whole. But when we gain a new customer and they use the product, they can appreciate our customer service. The you know, we put out a product and deliver a product that is exactly what you guys say it will be when we market the product, you help us deliver that message. The product is exactly what it says it is. That helps keep the customer in our wheelhouse, and they want to come back for other products because it built the relationship of trust with them. So introducing a new product, maybe the product isn’t necessarily what they need, but it keeps them interested and it shows the customer that were relevant and they they should keep looking out for other new products.
Tim
It’s like a gateway into maybe you don’t even need this product because you were interested in you see, we have other products. It actually has a side effect where launching new products can also boost the existing product sales because something else might be a better fit for them…
Kevin
For sure.
Tim
…than what they were attracted to you even though they didn’t need the thing that they were attracted to,
Kevin
I think in some, uh, on some of our digital campaigns were actually able to prove that that we have a lot of people, people that will, you know, they’ll see ads that we, uh you know, some of our digital ads they’ll click through, you know, because they see an ad for Ignite. But then they end up picking up samples for Benchmark and Kodiak as well. So they were looking for a shou sugi ban cladding like products. But then, you know, they start looking around her sight once they get in it and find that oh they, these guys have other interesting things to so.
Tim
And you mentioned the actually, you just dropped the sample bomb. So you know, you a lot of building materials manufacturers do this. Do you want to touch on that for a second? The pros and cons of sample request is a way to track early lead conversions and start to forecast what sales might come from something like that as a way to track ROI back to the marketing dollars. Do you want talk about the pros and cons of doing a program like that as a conversion tool?
Kevin
I don’t think that there’s any cons, to be honest with you. Does it cost money? Sure. But so does the marketing. And so does the warehouse and sort of the salespeople on everything else. But those air all justifiable expense is considering that we end up selling products and we make money in the long run. With our product. I mean, people could be spending anywhere from $10-50,000 on a siding package. And if you compare that to a car, I don’t know how many people would buy a car without ever having test driven it. So a sample that costs us maybe $5 in shipping and another 10 bucks to cut label and ship out the door. It seems like a completely justifiable and necessary expense to be able to put our product in the customer’s hands. Nobody’s gonna buy anything that they can’t touch and feel. And that happens also be one of the attributes of our product is that when you do touch it and you do see it and you know I joke, but a lot of people actually smell our product to because as a nice milk, but they can, once they touch and feel that they can appreciate just how nice the product is. So that’s again goes back, helping. How do you justify the expense of the product? It’s hard to understand why a product is expensive when you’re looking at it on the Internet, but when you hold in your hand, that makes a big difference.
Tim
In terms of new products. The one thing you also mentioned about that is that they’re the company itself is always looking to innovate. So not only is it a different science that goes into the thermally modified product, which is why it’s different than its counterparts from the nineties. But some of the design trends that you’re trying to stay ahead of it and match and be a an industry leader on you’re also finding new, innovative ways to make those products. What kind of role is that? Playing the perception of what the company is.
Kevin
I think you know when we put ourselves out there is a leader in the industry mean we’re known as the Kleenex, so to speak, of thermally modified woods, or even just simply modified Woods, for that matter. I think that’s more than just having a big name out there and everybody knowing about us. I think it’s, you have to walk the walk and talk the talk so we have to do that. I think it’s you have to be a leader and everything. It’s not just the design aesthetics. It’s also the functionality of it. It’s the technology that goes into the fundamentals of the product. You know how the product actually performs. So performance, installation, appearance. Those are three things that we need to be aware of when we’re designing anything because all of those things, you know, they affect all of our buyer personas. The architect, the contractor and the homeowner. Somebody along the that chain is going to be concerned about all three of those things.
Tim
So you’ve been involved with Thermory and in some capacity building materials for the better part of a decade and a half or two decades. How do you think that industry has changed in terms of what marketing is doing in the space through technology or brand positioning or products innovation?
Kevin
I remember when I first started my job at the molding company. I didn’t have an email address and all of the all of the quotes were done by by fax.
Tim
Oh, God.
Kevin
So things have changed drastically. I even remember having to convince my boss that we should get high speed Internet so that our phone wouldn’t be tied up when I needed to get on the Internet, and he didn’t understand why I needed to be on the Internet. So I think the digital space in general totally changed everything. I think where the building industry falls behind and lacks is not. It’s not the digital realm. It’s the actual physical realm of delivery, so you could buy. You can go on on the Internet now, buy anything from, you know, a pair of sneakers to a pair of jeans, too. Ah, lawn mower. But in how it gets delivered is relatively easy, but with building products, they could be long and heavy, cumbersome. And how do you deliver those things to a curbside. So I think that there’s a logistics that’s behind the curve and not keeping up with the technology and digital marketing that we can do. But when that happens, I think that will really change things. I also think that the way that manufacturers, distributors, lumber yards, try to go out and and capture sales or capitalize on leads is totally antiquated. For an example, we just had a trade show last weekend, and by the time we shipped to the booth to the trade show some dinners, hotel airfare, booth space costs, you add it all up. I think we probably had about $20-25,000 into it. We scanned 120 people. I think about 120, 130 people. So what was the cost? Per you know what was the cost per conversion in that case? Compare that to what you could do digitally, you know, how much would it cost us to to create 100 100 leads 120 leads digitally. It’s probably if we’re doing it right about 30 bucks, I mean, instead of 25,000. So I think that there’s, ah, we can do so much to understand again understanding our customers, knowing what they’re looking for and put ourselves in front of those people in the right time. And though you can set yourself up so that they’re coming to you again, you don’t have to add a trade show. Those 120 people that came by the booth, who knows why they came by while they stopped by maybe 70 of them are halfway decent, you know, leads that they’re genuinely interested. But what if it’s only 30 or 40? So understanding that customer persona, understanding the journey and getting front of them at the right time? I think you don’t have to do this thing where you’re going to trade shows and you’re out beating feet and pounding the pavement to get in front of customers. You can set yourself up so that they will come to you. If you’re just, you’re communicating a product the right way and putting it in front of them at the right time. When you understand your customer the right way.
Tim
And with the you can do this to a certain degree of the trade shows to, but with the digital space, you can actually see their progress through each phase of their buying cycles and trace that ROI back to an initial placement you were talking about even how understanding have someone might come in for a certain product and be attracted to it, but then end up asking for information about a different product, and we can see that mapped progress on the digital side, which is pretty cool, especially for a lot of companies that maybe even aren’t in the digital space yet or don’t have an appropriate marketing budget to go into something, knowing that you can see data of the activities that are happening, where the successes are coming from so that you know, you can always pivot to make sure your money is in the right spot. That gives them a little bit of confidence to have a marketing budget, put a strategy in place and not do the typical pounding the pavement, making phone calls, relying on distributors to generate all the sales instead of the brand helping with that.
Kevin
If I could have done things differently right from the start and I known what I know about marketing and specifically digital marketing, I would not have put a salesperson on the ground I would not have. I would have spent very little on travel, and I would have put it all into specifically marketing, understanding our customer, understanding the journey and then putting good digital content out there to have the people come to me instead of spending weeks and weeks and weeks which turned into years of traveling, hotels, airfare, dinners I didn’t want to be at etc. It’s an excessive amount of money to spend versus what you can what you can spend digitally. Yeah, and you get the learnings from it when you’re spending digitally.
Tim
What is one thing that everyone should make sure they’re doing for their brand? That’s critical.
Kevin
Have their mom fire them. I probably sound like a broken record, but I think understanding the customer and understanding the questions that they’re gonna ask. I think a lot of companies get caught up in this. I just want to push all of my benefits out there, and I want to make sure everybody knows how great my product is. And you know, there might be 30 benefits on the list that you could push in front of a customer, but they only Maybe they like care about two of them, so listen to the customer, understand them, and then make the information that they want available to them very easily. So understand the navigation on your website. Understand what questions are likely asked first. Um and then lead them down the paths to start answering questions for them that maybe they didn’t they don’t even know how to ask or what to ask. But start you can start leading them down the path to, you know, making making a purchase by giving them the right information at the right time.
Tim
That’s like a second level. It’s Mike who was on Episode one. My partner, who you know, obviously, always likes to say. Everyone thinks that someone says, “What car should I buy ?” as their first question. But the first question is actually, how do I get to work?
Kevin
Right. Exactly.
Tim
And unless you can take a step back and potentially have objective help, dig deeper with you to figure out what those questions are. You’ll skip steps to attract someone into that system.
Kevin
We’ve noticed that with a lot of you pay attention to every sample request that comes over, and there’s two things to tell me that we are hitting the customers with the right information at the right time. And we’ve done a good job of identifying what, what, who those customers are, what their journey is. One. They give up a ton of information. We do not require that they give us phone numbers and address um, for giving a sample request. They do have to give us the address phone number and also further information and whether or not they’re a contractor, homeowner or architect. And many times they were filling out all of the fields and we don’t have to. We don’t have to ask them for anything more, and furthermore, they’ll even go as far as to give us further notes on the project. And they’ll describe where it’s going to be and who the designer is and they’ll give us some specifics about the job. So it’s interesting to see how much information is coming back to us, and, uh, you know, they’re willing to give us all this extra information, so it tells us that their their interests are definitely interested in the product.
Tim
Is there anything that I haven’t asked you based on any of these topics, or or something that you just think is a real gem that you wanna drop at the end as a final thought.
Kevin
Luminus rules. I wish I would have got. I wish I would have understood marketing. I don’t know how long we’ve been. You know, we’ve been doing this since 2012. I wish I would have been more serious and wanted to know more about marketing in February of 2012 instead of January, You know, instead sending starting the company in January 2012 and then going for, I think, six years before we really started paying attention to marketing. We should have done it in month two. So pay attention of marketing sooner. In the beginning.
Tim
Where can people find you or Thermory?
Kevin
thermoryusa.com or you can call our office 585-250-4074, go to our website or just type in Thermory or thermally modified wood in Google and because Luminus does such a great job, we’re likely one of the first ones to show up.
Tim
Cool. Thank you for 35 minutes of awesome conversation and, uh, That’s it.
Kevin
All right.
Tim
Thanks. If you’re interested in hearing more stories and strategic insights from industry experts, please subscribe to the building brands podcast on Apple Spotify or Google. If you’ve enjoyed this episode, please post a review and share with others who may be interested as well. Thanks for listening.