Good morning and welcome to Constructing Brands. For those of you who are new, we are the place where you’re in charge of a building material company, manufacturing. We speak to people who are going through the same challenges you are. We’re going to hear their successes, their opportunities, challenges they have and how they overcome it. We’re also speaking to architects, designers, people find out how they’re making their decision today. I’m so happy to have on Craig Friedman. Craig is the CEO of XO Appliances. I’ve known Craig for a long time, had the pleasure working with him. And I look forward to jumping right in and talking to Craig about how he’s taking products, bringing them to market and having success. Craig, welcome to the show.
Thank you, Eric. I’m glad to be here.
Thanks for joining. So let’s get right into it. Tell us a little bit about XO Appliances and how it was born.
Well, XO Appliances was born out of our distribution business. We’re a distributor of appliances under another company that we own, which is called Eastern Marketing. And through the years we found that in the distribution business that brands that we would help develop for manufacturers would be ultimately taken back from us to the manufacturer and we would lose the business altogether. So what we did is we decided to create our own brand, a brand in which we would have ownership and we control.
So you made a leap from distributor to manufacturer.
Yeah, we don’t actually manufacture the product. What we do is we source the product. So we’re involved in the design of the product and we are also very much involved in after sales service of the products that we sell. So in the appliance industry, I’m sure your listeners have owned an appliance. They typically will break down at some point in time. And it’s really important that they have the confidence that our retailers have the confidence to sell a product that they know is going to be handled with after sales, service and care. And that’s what we do.
And I love the fact that you’re coming at it from a point where you understand distribution and you understand marketing, and now you’re going to the phase of developing a product.
It feels as though there are two different brains working, right? The product brain, which is iteration, making it perfect and driving a product to a place where it is unique. It has its unique selling proposition, all of that. Distribution is how are we exposing, expressing and getting that the, all those things that the guy who did the product is going out to market with. Tell me about your experience and how the two dance together, can you?
Sure. Well, first of all, I think over the years, what we’ve always done for our manufacturers that we represented in the distribution world is we gave them a lot of input on product and design. We would be the people with the boots on the ground, in the stores talking to the retailers, talking to end users and consumers and finding out what their needs were. And then we would filter that back to the manufacturer and many times you know, some, it would fall on deaf ears or it would be a slow process to get it implemented. So now with our own brand the control is ours. It’s very easy. And we really enjoy designing these product lines as we continue to introduce more and more products with the appliance industry. But it’s from, you know, the many, many years of experience that we’ve had in selling and servicing products that we kind of understand the market.
So what do you feel the biggest challenge is right now that you’re facing as a group that has been so focused on distribution to now being responsible for the product as well as its distribution?
Yeah, well they kind of work hand in hand you know, the distribution model that we still have and we still represent other brands as well, really helps us. It’s a relationship business with the retailers the appliance retailers that we sell to, that’s a relationship that’s been built over 30 some odd years, so that’s a strength of ours. So as we develop new products these people trust us and we’re more than willing to give us space in the stores and sell our products. You know, the challenges are that as you’re sourcing products from overseas, which we deal with many of the products that we have we’re in several different countries, that you’re running your daily business here from 8:00 to 6:00 PM. And then you need to get onto the next time channel across the seas there, and so you’re working a double shift. That’s probably the biggest challenge. It limits the golf time.
What are the top three things that I need to think about? And how do you think they’re going to help me in getting my product to market or through the distribution channel or to the end end user or to the B2B? In many cases we’re talking to B2B, right? Meaning it’s not going directly to the consumer. It’s going to a channel.
Ultimately, whatever we’re manufacturing is going to the consumer. So we have to care about the design of the product, the price point of the product, therefore adding what the value is of the product to the marketplace. I think we’re in a unique position in the fact that we kind of control again, that distribution. We have the relationships with our customers, our retailers. I think what a lot of manufacturers will be challenged with is even though they have the great product, the great design and the ingenuity that to develop a product it’s that last mile of getting the product to be sold, right? And the relationship that they may have, or a distributor might have. So I’d say if I was a manufacturer of a product, it’s again, figuring out the right distribution method to get that product to marketplace.
One of the reasons I’m so happy that you came on today is, and anybody listening, if you listen back to the series of different podcasts, we’ve done with different people who’ve created incredible products. It’s the conversation of, well, your marketing and your efforts are all thinking about the channels of distribution and hoping that that drives it, what you just said now, and I just want to kind of highlight, because I think it’s so intelligent and it’s so important to really hear is always recognizing there’s an end end user there, even though they might not be the person you’re selling to initially that end end user is going to ultimately make that decision. So you can almost control it seems like and how insightful. Has that been part of the ethos of your distribution business forever? Or is it something you’re taking on now as someone involved with both the manufacturing as well as distribution?
No, we’ve always been very involved with the end end consumer. We listen to them, we take care of them in many many brands. I don’t know I bought other brands of appliances for my home and found that sometimes when I have an issue with that appliance and I call the manufacturer, it’s unbelievable how cold they are as to, you know, what the warranty is and that, you know, we’re not going to extend it. Or, you know, even if it’s something they’ve been having a problem with for a long time, they don’t own up to it. And, and we do.
So that’s great. So the advice I’m hearing is that if you’re a manufacturer, understand your responsibility, and it’s not just to the channels of distribution, but it’s also to the end end consumer, understanding that you need to make sure that you have content information available and you’re there to support that end end user, because ultimately even though they’re going through a channel distribution, your product is what they’re rubbing up against every day.
Absolutely very important to take care of the customer and even more important today in today’s world of ratings. Right? So whether it’s a Google review or it’s, whether something they want to post on your Facebook page or somewhere else it’s very important to keep the customer satisfied and happy. And that sometimes means overstepping what would be your regular warranty or something like that. Make the customer happy.
Tell us some of the ways that, and I know that you’re evolving this new brand, this XO Appliance brand, but tell us some of the ways that you’re creating content online and offline to speak with that end end target consumer, are you doing videos? Are you doing, what’s in the pipeline? What are you thinking about doing to drive that relationship that’s so important?
Sure. Well, it’s all about the image of the brand, right? And this is something that your company has been helpful with us doing as well, but it’s the right imagery from the literature creating the right literature for the consumer, so they can see that right experience where we’re really a luxury brand. And so, we’re showing luxury imagery, etc. When it comes to video, video is exceptionally important, because today’s world is let’s not read, let’s not work too hard at this, let’s just sit back and watch, right? And again your company has really helped us in establishing some unbelievable videos. We’ve gotten great feedback from that at our XO Appliance website, you can see that. Obviously we’re posting on social media on a regular basis through Facebook, through Instagram. But the other thing that we do is we’ve also invested in great display fixtures at the appliance retailer. And we insist on our sales reps that call on the stores to make sure that the fixtures are merchandise. So we’re going out to you know, we’ve got some old school sales guys, but now, you know, they regularly stop at the places like Home Goods, etc, to buy some nice fixturing accoutrements for the display.
A recap of what I’m hearing is in this day and age, it’s different than maybe it was, if you’re a manufacturer, what I’m hearing, you can’t take that siloed approach and think by just creating that great product and delivering it to your channel of distribution, you’ve done your job. You need to think about. And I’m just going to recap some of the things I heard. Number one, make sure that you’re standing behind that product, not only through your distribution channels, but also to the end end consumer. Two make sure that you’re not taking that siloed approach and that your communication strategy with your content, with your brochures, with your videos, with your online assets, with your Facebook, Twitter, and all the other ways that you’re giving information, not only to the people who are selling your product, but the people who are buying it from the people who are selling the product. And it sounds like most importantly is that overarching responsibility, which is what you’re saying. If you’re manufacturing, you need to now not just, you know, build it and they will come, you need to build it and work on all these different levels of touch points. Right?
Sure. I want to add one more thing that I left out, which is super important, which is your website. The website has to be gorgeous. It’s got to be easily navigable. It’s got to be a place where you can find the content that you want, find it easily. It needs to in our business again, after sales is important, so we’ve built a very nice parts area within the website. So a lot of times people buy an appliance and they don’t remember where they put the receipt. They don’t know what the model number is. They don’t know where to find that serial number. So on our parts department, you’re looking at the images of the appliances. So you can say, oh, that’s what I have and click in and you need to get a part, you can get a part. So we try to add conveniences to everything that we do. And again, the website, critical, critical to your business. And of course it’s not difficult to use Google Analytics and to understand how your website is performing. So I would challenge any owner, a CEO, or a marketer to make sure that they have a log in to their Google Analytics account and can see how that website is performing.
Great advice. Wonderful advice. Craig, thank you so much for joining us today. If somebody wants to get in touch with you, what’s the best way for them to reach out to you.
You can go to XOappliance.com, which is our website and believe it or not, if you go to the contact page there and click on it I actually read every one of those emails as well. So maybe I’m too involved, but I like to be involved and see everything that’s going on.
Craig, thank you so much. I think all these points are so, so well said, coming from a person who’s been in the distribution business for as long as you have, and then have made that pivot to manufacturing where you’re now responsible for not only bringing the product to market, but getting the product into the hands of the end end consumer and all the way around. Great advice and I think it’s wonderful. Thank you so much.
Thank you for the opportunity, Eric. Appreciate it.
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