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How Craftsman found the right tools to get customers excited again Featured

8:01pm EDT May 31, 2012
How Craftsman found the right tools to get customers excited again

Craftsman is a brand that resonates across the United States with do-it-yourself plumbers and weekend auto mechanics. But in early 2009, Kris Malkoski feared that the brand was losing its shine with the clients that depended on it the most.

“Between 2003 and 2008, there were only five product launches that had any substance,” says Malkoski, vice president and general manager for Craftsman. “For an almost $2.5 billion brand that has over 6,000 (stock-keeping units) and plays in 80 different business segments, that isn’t enough innovation.”

As Malkoski explored the situation and looked for reasons why innovation had dropped so much, she discovered that there were way too many things trying to be accomplished all at once inside Craftsman without any semblance of communication among the group.

“Each of the functions were somewhat siloed in the prioritization of activities to help deliver what they thought they should be doing to grow the business,” Malkoski says. “As a result, when I finally got everybody’s projects mapped out onto a piece of paper across an organization that was pretty lean, we had over 350 different priorities, depending on who you talked to.

“There is no way you can successfully move your business forward if everyone has a different three priorities because we all rely on each other. If we are all going about our business thinking we have X, Y and Z to do and the next person is doing A, B and C, you just don’t move the business forward as robustly as you can.”

Malkoski wanted to turn that around and get everyone back on the same page at Craftsman, a proprietary brand of the $41.6 billion Sears Holdings Corp., which has 293,000 employees around the world.

“You need to know what to focus on,” Malkoski says. “Any brand will tell you that by better understanding consumers’ unarticulated and unmet needs and by being able to address them in a meaningful way, that delights the customer and makes them more loyal. If we focus on the customer and focus on what does it mean to make the customer want to buy Craftsman because it solves a real problem in their life, the better it is.”

Create a spark

The first thing Malkoski felt was important for the Craftsman brand to do was to reconnect with the people who made up its target audience. These are the people who buy power tools, tractors and lawnmowers for their home maintenance needs.

“These are the people who have 10 projects going on in their home and 10 more in mind for things they would like to do at some point when they get their current projects done,” Malkoski says.

“These are people who buy tools or lawn and garden equipment in anticipation of a job and not because they are in a crisis and suddenly they need a new tool. It’s really understanding your customer and getting intimate with them. What drives your loyalty? What are their most important feature requirements for your key product lines?”

In an industry such as the one in which Craftsman does business, it doesn’t take a lot of research to know what type of person buys your product. But as innovation dropped to a mere five new product launches over a five-year period, it was clear that the bond between brand and customer wasn’t as strong as it used to be.

“How do you reach them in inspiring and innovative ways that really capture their attention and inspiration?” Malkoski says.

Malkoski was looking for a way to reach her customers that was different from what had been done before. She wanted to surprise them and create a new buzz for the brand.

“From a public relations standpoint, we put Craftsman into situations where people didn’t necessarily plan to see us,” Malkoski says. “But once they saw what we were doing, they were inspired.”

It was decided that Craftsman was going to make an appearance at the renowned Consumer Electronics Show. This is typically a place where you can get a look at the latest in laptop or phone technology or check out prototypes of 3-D televisions.

But in January, you could take a look at the first garage door that you could open from anywhere in the world.

“It was an electronic technology that could talk to the cloud and because we were juxtaposed in a way that people didn’t expect to see us, we got over 100 million media impressions,” Malkoski says, referring to a metric used to quantify how many people viewed in some way, shape or form, a particular offering.

The entity also launched an interactive venue in downtown Chicago where people could ask questions and see demonstrations about Craftsman products.

“Think outside the box in terms of inspiring your customer and reaching them in a way that they want to receive the content,” Malkoski says. “One of the mistakes we make with brands is it’s too formulaic. You have so much television advertising and this much print and this much radio and PR and it’s more of, ‘Let’s report that we’re doing a new product launch,’ as opposed to saying, ‘How can you use those vehicles in a totally different way? How do you create that buzz?’”

Stay on target

As Craftsman looked for new platforms on which to reach its customers, Malkoski also wanted to address the innovation problem. She wanted her employees to be part of the process, but she wanted the process to have a lot more order and structure than it had previously.

“You want your employees to ideate and constantly look for new solutions to the DIY customers’ needs,” Malkoski says. “But it’s all about processes and having the processes in place to maximize the input of ideas and minimize the extraneous work that won’t get you to the revenue and profit goals that you want.”

The first solution to this problem was the creation of the concept factory.

“We take any idea,” Malkoski says. “There is no bad idea and the idea can come from an employee, it can come from a trend we see in the industry or it can come from a current user saying, ‘Hey, I’d love it if you could figure out how to add foam padding on your tool storage units so they don’t ding up my car.’

“Then we have a very simplistic process where we can vet these ideas through a simulation model with different price points to understand whether or not the product has enough consumer purchase interest that we should pursue development of that product. When you put it through the concept factory, you’re lucky if half of the ideas in any one comes out the other end as having enough consumer purchase interest. But that’s OK. You’re trying to narrow them down to things you should focus on.”

The key is the vetting process and being clear with everyone in your organization about what your goals and priorities are.

“It’s really about focus and clarity,” Malkoski says. “It comes back to our conversation where we don’t need 300 priorities. We need 12 priorities that we know can deliver big results. Then you have to communicate it and you have to make sure each person owns part of the outcome of those priorities so that they come to work with a purpose.

“They know that this is what is important and not all the other stuff that is flying around. You can make the big innovation happen if you are crystal clear down to the last employee about what is important, what is success going to look like and what is their role in delivering success?”

You need to take caution, however, that in creating a structure and forum for considering ideas, you don’t go overboard with the parameters. The best companies will attain a mix of innovation and structure that really sparks the creativity of employees.

“One of my priorities is that people don’t come to work, they come to fun,” Malkoski says. “Even if we’re problem-solving some serious thing, we find a way to still have fun in every day. If people enjoy coming to work, if they have a clear purpose of what their role is and that they are important to the organization, you can make a lot of innovative things happen with a very lean work force.”

Keep reaching higher

It can still be difficult sometimes to whittle down your list of ideas when every suggestion seems like it has the potential to be a winner. If you set up a vetting system that looks at all the key components and you’re still unsure, ask yourself if the product is a potential game changer.

“Having the first garage door you can open from anywhere in the world beat out the digital torque wrench with tighter maneuverability for tightening bolts in your engine,” Malkosksi says. “So you look at how big the idea is and how much of a game-changer it can be. You need to ask yourself: Where do I need to win in innovation to carry the brand?”

One of the challenges in these tough and uncertain economic times that just don’t seem to go away is asking people to do more and think harder about improving your business when in many cases, they’re already maxed out.

“There was a time when I had three babies in diapers in less than two years,” Malkoski says. “I was launching Aleve pain reliever for Procter & Gamble and my husband was managing Asia-Pacific for another company and was never home. I was a little stretched on all my ends. I had a real talk with myself one weekend about what was important.

“I created a catch phrase for myself that I try to abide by as much as possible. Live, laugh, love and then let go. I try to live life to the fullest and live Craftsman to its fullest. I try those crazy ideas to see how high is up. If you don’t live to its fullest, you’ll never know what is possible. You might miss something that is really great.”

This philosophy and a better structure for fielding and considering new ideas has helped Craftsman to turn up the volume on innovation in recent years.

“In 2009, the first year I was here, we had about seven new product innovation launches,” Malkoski says. “In 2010, we had 25, in 2011 more than 100 and I would say we’re on track in 2012 to launch over 150 meaningful products.”

But Malkoski and her team are hardly resting on their laurels. The effort to keep finding new and meaningful products for Craftsman customers rolls on.

“It doesn’t matter if times are tough or abundant, you need to continually invest in your business and invest in your brand and invest in ways to ensure that you are creating loyalty and long-term value,” Malkoski says. “Customers who are satisfied today are going to have you on their consideration list a year from now, three years from now and five years from now.”

How to reach: Craftsman, (847) 286-9036 or www.craftsman.com

The Malkoski File

Kris Malkoski, vice president and general manager, Craftsman

Born: Columbus, Neb.

Education: Bachelor’s degree in journalism with emphasis on advertising, University of Nebraska.

What was your very first job?

When I was three years old, we had chickens. My parents would have me gather the chicken eggs. Eggs aren’t white and clean like they look in the store when you buy them. There is manure on them and straw and stuff. So I would wash a whole carton, a whole 144 eggs, and my parents would give me 10 cents a carton.

When I went to interview at Procter & Gamble, I was naive, green by the ears because I had never interviewed for a big job before. So the guy says to me, ‘OK, tell me about your first job and what you learned.’ So I tell him about the eggs and I say the eggs in the grocery store look a whole lot different than the eggs coming out of the barn. He looked at me with the most puzzled look on his face and he goes, ‘I meant when you were like 16.’

Who has been most influential in your life?

It’s my parents. I learned the meaning of hard work, but I also learned the meaning of perseverance and making the most out of a situation and pushing yourself to be your very best. My mother wasn’t allowed to go to college, but when she was in her 50s, she went back and got her college degree and works at a hospital now.

My father always did the extra. There was a period when a lot of farms were foreclosed upon or people had to sell off their acreage. My dad had everything paid off. He was a smart businessman.