We have all heard the old refrain: You can’t sell ice cream to Eskimos.
Don’t tell Todd DeMonte because he currently sells dehumidifiers in the arid state of New Mexico to solve greenhouse operators’ mold problems growing medicinally-approved marijuana plants!
The company he heads, Therma-Stor, has grown under his leadership to become the largest manufacturer of dehumidifiers for both the business and consumer market in all of North America.
Make no mistake about it, humidity is a big problem in our life whether it’s in our own homes or for those that operate greenhouses or industrial plants. The Therma-Stor team prides themselves in asking customers to try their units and make up their own minds about the quality of their offering.
What does he credit to his company success? He points to his experience at a Mercedes dealership in the 1990s. Mercedes was under pressure to compete against Lexus, so they drove their costs down but sacrificed quality to the detriment to the brand.
As a result delivering quality to customers is paramount.
Todd’s team adheres to the philosophy that customers have challenging problems, but they don’t know what the product solutions would be. As Steve Jobs once famously said: “a horse and buggy owner would never think to ask for the invention of a car.”
Todd’s team feels they are in the “translation business”. They listen carefully to a variety of sources about their products from customers to sales reps to people using competitors’ products.
They spend their time understanding the problems those customers face and then translate those problems into opportunities that their equipment could solve.
Take the marijuana example. In the indoor facilities that grow legal cannabis, it’s necessary to control the lights. When the lights are on humidity levels can easily be maintained. However when the lights go off, humidity levels rise creating serious problems such as powdery mildew, spider mites and a whole host of other things that will ruin the harvest!
Anyone in business is flooded with feedback from customers and the market, and so the question always becomes: what can our team do about it?
Todd historically segmented their various product ideas and evenly distributed investment across their various brands. He said he got that idea by trying to treat his kids equally.
Unfortunately the family makes a lousy metaphor for a successful business. Because we love our kids, we don’t fire them!
So instead Therma-Stor developed a product innovation process that speeds up customer response through various gates to evaluate products. It begins with an analysis of their core competencies as well as the potential for sales of the product before anybody engineers or manufactures anything.
We all hear about the Lean Startup methodology by Eric Reis but that applies primarily to software development. Jeff Bezos throws money at his software engineers to innovate. Not so easily replicated in the mechanical engineering world where sometimes it’s hard to get ahold of raw materials or parts from the supply chain to test a product.
As a result, Therma-Stor can compress the testing process and that in turn allows them to focus on those projects they know will create the most value.
That process has accounted for the tremendous growth of the company to become the leader in segments focused on efficiency, capacity, or size.
Their team delivers the most efficient dehumidifiers in the world.
Todd hires most of his engineers from the Madison area, the location of his plant; many are UW graduates. This proves that Made in the USA is still a viable option.
We do not have to figure out how to sell ice cream to Eskimos to achieve the kind of results that Todd’s company has achieved. It starts with a keen careful listening process to customers and then turning their problems into solutions that delight them. As proof most of his growth comes by word-of-mouth and they track that by ZIP Code.
Innovation begins by careful listening and interpreting the needs of the customer.