Episode 178: Unlocking Kitting Secrets with Josh Kozinski, Sky High Marketing

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

Right now they're in the middle of celebrating their 100th anniversary this year in 2021.

Wow.

Yeah. Initially. Yeah, it's huge. I mean, initially we were in several high-level meetings with them as they were developing their anniversary plan.

That's the voice of Josh Kaczynski. Josh is the founder and CEO of Sky High Marketing. Sky High serves many Fortune 500 brands. They are the official promotional merchandise partner of the Milwaukee Bucks. They have offices both in Las Vegas and Milwaukee. Today, Josh and I talk about several timely topics, including the Master Lock story, Sky High's strategic partnership with them, and how they helped a 100-year-old company commemorate their anniversary. Plus, Josh and his team, they are pros at kitting and fulfillment. And since kitting is what we are all into these days, Josh and I talk about the hidden areas in the kitting process that you might be omitting that's costing you money. In addition, we talk about how the customer has changed, including how inventory has made a comeback with stores and shops, how we can expand our services with customers, and more. Hi friends, I'm Bobby LeHew, the Chief Content Officer at Common Skew. Before I get into our chat with Josh, we launched a really cool new concept that we're excited about. It's called Community Meetups. We're taking live interviews featuring insightful talks by the most streetwise entrepreneurs and we're mashing those up with a community hang and microlearning lab. Bring your team each month to grow together as we share our insights on the topics of sales planning, marketing tactics, and more. Our first meetup is next Wednesday, March 24th. The whole CommsQ team will be there, plus many of your friends. So come meet up with us. You can register at commonsq.com/communitymeetups. Now here's my conversation with Josh, where I start our chat by asking Josh about how we can get immersed in the brands that we work for.

The relationship that we all want to establish with our clients is a, is a deep partnership where clients look to us as an extension of their marketing team. And we probably all have clients that allow us to do this to a certain extent. And then we have other clients that don't allow us to do that. And so we know when clients utilize us in that way that loyalty to us as a company goes through the roof. So I think that's where we're all aiming to get to. And so brand immersion means to me that you study your client inside and out and you know their brand as well as they do. And I think, you know, in today's age, the amount of information that we can find through a client's website, reviewing advertising campaigns, reading company history books is all really, really powerful information that can help us on a day-to-day basis as we service those clients. When we immerse ourselves in a brand, you know, one of the things that takes time and effort, but when you do your homework and then you kind of come to meetings and you start asking the right questions and presenting the right solutions and products to requests that they have for you, you really now have taken yourself to like an agency level and it's going to be hard for the company to look to replace you. That's why I think it's just really, really valuable to go through that immersion process and learn their core values, their marketing messages, and then be able to try to tell that story through branded merchandise. And I think when you do that, you can really become a great partner.

Do you have a specific story where you've done this with a client? So you and I have known each other for a long time, and we both had those relationships with clients where we were able to grow widely with customers. And it's sort of an organic process through the years, if yours was like ours, where a client would say, hey, we're interested in doing this, or here's what we're thinking, or here's where we're going. And you end up expanding your abilities, your capabilities. And before you know it, you've grown widely with the customer as well as to Do you have an example?

Yeah, I'm sure we've both been on those calls where you, you're like, I don't know how to do that, but I'm going to figure that out.

Right.

You know, all the time. Yeah. Because you're, you just know that based on the potential for your business and the potential to grow your relationship with the client, you have to figure things out. So one of our examples would be a company, Master Lock, which everybody would be familiar with. And their corporate headquarters is in Milwaukee where our headquarters are. And they've been doing business with us us for the past 20 years. And that relationship absolutely has ebbed and flowed, and the services that we've offered them and provided to them have been all over the map. But at this point, you know, because of our longevity with them and what we've exhibited to them, they definitely don't look at us as like a standard traditional promo company. I mean, we really are an agency partner to them. Right now they're in the middle of celebrating their 100th anniversary this year in 2021. So Wow. Yeah, initially we— yeah, it's huge. I mean, initially we were in several high-level meetings with them as they were developing their anniversary plan. And now to see that execution of the plan kind of start to take place throughout the year has been really cool. We designed a commemorative logo with them. We implemented an online store with 100th anniversary merchandise. We started the campaign with a kitting project. With a letter from their president and a bunch of 100th-year merchandise. We provided a ton of drinkware for a virtual toast for all of their employees globally. And it's just been one thing after another, which has been—

Hang on, hang on. A virtual toast?

A virtual toast. So we did commemorative 100th anniversary drinkware that we drop shipped. I think there was probably about 500 dropships, and we dropshipped those to employees and stakeholders globally. And then we actually, we were able to take part in the toast too, which was kind of cool too.

That's awesome.

Josh, let's talk about kitting. You and I have been doing kitting for a long time. So when the pandemic hit and suddenly we were doing kitting far more frequently, we had already been exercising that muscle. So when I was a distributor, our business models were very similar. Do you have, and I know we did, a formula or pattern that you go through with each kitting project that sort of makes it easier to price and execute?

We do, yeah. We, um, I mean, what we'll look at is we'll look at not only the cost, obviously, of your promotional items that you're putting into the kits, but, um, we will look at, you know, costs including packaging You know, and packaging, that includes everything. I mean, there can definitely be hidden costs when it comes to trying to figure out how you want to price out kitting services. So I mean, when you're talking about your, your packaging materials, you have to look at your black and white versus your color copies, and you know, your poly bags and your printed materials that you're going to insert. And then obviously on top of that, you have to look at the labor that it's going to take for you to execute that. So We do have a pretty, a pretty good form that we follow in asking questions to determine from our clients what their goals are. And I think to us, a lot of it always starts more with, with the why. You know, why are you looking at kitting as a service and what are you looking to accomplish through it? And then we just go through kind of a series of questions that helps us understand what the, what the application is and what their intended goals are. And then, and then we start looking at potential product solutions and budgets and work with them. But yeah, there has to be a formula where you think of all the costs associated with, with the project.

I love that you started with the why. What I'm curious about too is when you get now into the what. For us, there were a couple of like landmines, things to be aware of. There were opportunities too. So kitting projects, as I've talked with many entrepreneurs in the business who have specialized in this, are fantastic opportunities. They always have been. It's an opportunity for you to demonstrate to your client your ability. It's also a great revenue stream that you didn't have before, just around product, whether that's the time or whether it's freight revenue, whatever it might be. Our process looked like this, and then I'm curious if yours look like this as well. From a pricing standpoint, you know, you had the product itself and then you had the freight. Tabling those two for just a second, you've got this little middle area that folks that haven't done it are unsure of. And for us, that represented labor in about 4 or 5 areas that represented labor of incoming, managing the project, the products as you're kitting them themselves, and then outgoing. So you had that physical labor. Anytime someone touched that product, whether it was receiving 100 boxes in, getting them ready to assemble, assembling them, and then kitting them is the labor cost you have. Often people will miss all of those and outgoing parts, and they'll just do the kit part where they're putting things together. But then you have administrative part where the salesperson is involved in far more back and forth with the client. So sometimes we would build in a consulting fee. We didn't call it that. The client didn't know. It was all built into the unit price of the kitting. So you would have that fee as well. But to me, those were two key areas that people would miss in terms of knowing how to price kitting. Is there another area that I'm missing that you guys cover?

Data. Data is another area that can be a real landmine because, because if you have bad data, your project could go sideways in a quick curry. So we have again a set kind of spreadsheet that we ask our clients to fill out for us, and they need to understand that if they don't provide us with good data, that is going to cost them money, because not only in reshipments but also in just address corrections and address returns. So that would be another area that I hear misery, right? Oh, yeah. Yeah, for sure.

Josh, before you move on, let me ask you this. With that, do you force them to fill out your requirements or do they sometimes send you a CSV file or whatever it might be with theirs and you make that accommodate, or both? There's a little bit of both.

So we used to do both, but now we're at a point where we give them the CSV file. We're like, if you provide us with the data on this form, we're good to go.

Right. Okay, great. You had too many mistakes trying to probably meet them in the middle and be nice. And yeah, that's cool. You were going to say something else though.

I was going to say, you know, the other— when you talk about potential challenges, I mean, the other one again is just as the world is shrinking and all of us are being asked to do more globally, that has certainly come into play with kitting as well. So Initially, it's important to not only, you know, know how to ship domestically, but you may have clients that need to ship— have you ask you to ship globally. And that is a process too, not only in figuring out how to get the kits to the individuals, but also understanding like things like customs and duties and all those sorts of factors, which there are costs associated with those things too.

What was probably one of the hardest kitting projects you ever had to do?

I would say a kitting project where the client elected to do full color, full bleed graphics on every side of the box versus just having us print the box. So now, you know, now you're talking about 6 different labels/stickers that we're having to line up perfectly. On 500 boxes and they ended up doing it because the cost of the sticker was going to be less than the cost of imprinting a box. And we didn't necessarily account for all of the labor time that was required to get these boxes.

Oh, right. Yeah. Yeah. Part of, part of the reason why we, you and I have so much experience is kidding is we've, we've found so many ways not to charge for this service.

Yep.

The surprises that come at you.

Yeah, we had a few.

One was a Potato Head campaign that organization used as a sales campaign. And what we did, we had 5,000 Mr. Potato Heads. And what we didn't know is that Hasbro would not let you just order Potato Head parts, right? They would— you had to actually order the Potato Head as it came off the factory from wherever it was produced overseas. So you had to put well put together Mr. Potato Head, then the assembly team had to disassemble before they can then put it into the proper kits. So there you go. There's all kinds of kidding stories.

We can spend a lot of time. I do not have anything that will top that, Bobby.

So talk a little bit about how the customer has changed for you and for most of us. Like I said, you've been at this a while. You've seen a lot of changes. We saw what happened after 2008. The market changed. The client changed. We are now seeing After this pandemic experience, the market is changing again and the client is changing again faster and probably more dramatic than we've ever seen. What's changed with the customer for you today?

I think the speed at which customers want information, the speed at which they want orders turned, you know, the speed at what they want everything at their fingertips is really, really Unlike any other time that we've been in this industry together. I mean, it just, it just is. We're constantly looking at how we can make the customer experience a better one, but also a faster one so that you're able to respond to individuals and companies that, you know, it's kind of the Amazon effect. I mean, when all of us place an order, you know, sometimes we're going to have that order in a couple hours. Maybe it's going to take a day, but that has definitely, I think, worked its way down into our industry where just that speed factor is at a higher level than where it's ever been seen before.

Do you find the customer asking more questions about intent and purpose and origin and sourcing and lots more questions in terms of complexity than they used to where maybe the conversation was, we just need a hat and we need to ship it to 100 people? Are you seeing the conversations get larger? In a sense.

Yeah, I think with your bigger, with your bigger clients, they not only want to know that it's a hat, they want to know where it's manufactured. They want to know that it's manufactured in a place that is up to their standard of conduct and codes and all those sorts of regulations, things. So we see that. I mean, another thing that I think you see in clients today is there no longer is a delay between like what's available to us in our industry versus what they're seeing at retail. So I mean, we see just a huge, huge trend towards customers that they want product with their logo on it that is the same name brand and the same even products as what they're finding at retail.

How has e-commerce changed? And for you, that would be primarily stores and shops. How has that changed?

I would again kind of refer to that Amazon effect where when they place an order, They want to see a quick shipping confirmation and they want to see their orders to them in a quicker fashion than what we were used to. I, we've been at stores long enough that when we first got into the store sphere, we had a lot of clients that did want everything on the shelves ready to ship. And then we went into a time period where in order to be cost conscious and budget conscious, we had a lot of just-in-time inventory situations where where, you know, we would get into batching, batching and things like that. And now we've seen kind of a rollback to where the clients that we're doing stores for and talking to about potential store opportunities, they want stuff on the shelf so that if that order is placed by 2 PM, it's beyond UPS truck that day.

You know, that's a really interesting comment, Josh, because you and I saw this happen in the business where everything was used to be inventory. Then we moved to this more on-demand model, just-in-time, and folks like you and I that specialized in inventory, then we retracted. And I would even talk to customers with language like this. Well, overall, what you're going to spend in your budget, we know about 10% is going to be inventory. Yeah, but that speed now is forcing the inventory conversation back on the table is what you're saying.

It is, and it does. I think it allows for us as a partner to be able to better service our clients because, again, having to go through the just-in-time scenario and the batch— batching type of scenarios, it— there is a lot of administrative and logistics work to do that and to do it well. And it's so much easier for us as a distributor to have things on the shelf where we can just go pull and ship And it does provide a better client experience also.

In regards to just the customer themselves, the buyer, whether it's a shop experience or whether it's just them buying promotional products, branded materials, print materials, whatever it might be, what do you think the buyer wants from us in general in the future?

So I think what they're going to want is what they can't find or buy online. As much as we're moving into an e-commerce world, I think what the customer wants and what us as distributors have to look to provide are those things that they can't find or buy online. And to me, that is where we get into value-added services. So to me, as a partner, if I can understand the client's brand as well as they can, as well as they understand it, and I've immersed myself in their brand, and then I can provide solutions to challenges that they have And if I can do that through value-added services like kitting, like fulfillment, like online stores, like providing design services, now I've started to be able to differentiate myself versus any other website that they can go out to. So I think what every distributor really should be doing right now is looking at their client base, looking at ways that they're providing those value-added services to their customers and looking at services that are resonating with their existing customers and then look to broaden that out and expand that offering to their clients at large.

Sometimes that is the very last thing you said is one of the most important parts for growth because we will, we're such a responsive and I mean this in a very respectful and honoring way. We're such a responsive and reacting environment that we're just taking care of the next fire for clients. We're doing something over here for special client that we're not doing over here for all of our other clients. And it takes It takes years of experience for us usually to get there, but I'm trying to fast-track people and help them leapfrog what you and I had to learn the hard way, which is take those experiences, take the time to stop and understand what it is that makes you unique and special beyond product, whether that's your creativity, whether that's the design and nuances inside that, because some of those are table stakes, but understand what that is about your brand and then ask the question, am I applying this to the other customers? And am I codifying this in a way that communicates our value to every customer?

And then also, again, becoming a marketer and saying, how do— how can I succinctly explain to Prospect ABC what I've been doing for 20 years for a big company like Master Lock so that I actually can grow and I can tell that story to them? And that's So it's, again, a challenge, but also an opportunity for us distributors is to put on that agency-level hat and figure out ways on how to get that word out there.

How do you do that yourself? Do you use the Master Lock story and other client stories to help accentuate what it is you're talking with buyers about? Because our problem is we could talk about an infinite number of things and services and products and what we do, but getting that into a concentrated format, particularly now that we're selling you know, virtually and digitally. Yeah. In a way that's compelling probably falls back on that customer story.

Yeah. So our marketing and our presentations are really solely focused on value-added services at this point. And then we, then we work our way into product. So I mean, we will talk about value-added services. We'll talk about being an agency that will immerse ourselves in your brand. And then we'll get into the actual the actual physical products that we can help, the actual merchandise that we can support them with. But yeah, it's, um, that's kind of how we, you know, kind of go-to-market strategy is just let's talk services, let's talk us as a company and, and the way we do business and the culture and the things we stand for, and then we'll get into the specifics of, again, product and merchandise.

Shifting gears a little bit, I'm really curious about your Commonsku journey. I know that's not typically an easy journey for most entrepreneurs, or at least on the, on the outset it seems that way. And then usually post, what we find is post-onboarding, you realize it wasn't as scary and hard as you thought. How has Commonsku brought your team together? How has that opened your eyes as a leader? Has that really helped communicate what's going on real time with projects, things like that?

Well, you know, when you, when you have been around for a while and you have a really good book of business in place and you're kind of that elephant that moves at a slow speed and change, you know, change can be so hard to implement. And then you get thrown into a pandemic and like you're down to like 20% of your sales compared to where you're normally at. That can be a good time to kind of say, okay, maybe now is a good point to look at processes. So that's what we did is we said, okay, we got to come back out of this stronger and better than we've ever been. And we believe that there's going to be so much opportunity. So we started looking at not only our— I mean, we looked at processes and systems all the way up and down our organization and came back to Common Skew after looking at it in a couple of different points of our history and then just kind of made the decision that we were going to jump in, tear the Band-Aid off of things that were holding us back and move to a system that was really like created and designed for today's world. And I think what it's done is it's just opened up collaboration amongst our team tremendously. And it's just given every team member a look into other team members' day-to-day successes. And it helps, you know, things like the dashboard and things of that nature just help us celebrate each other's successes, which has been awesome.

That is something that has become far more vital. I mean, the platform was always built for that, but wow, this past year has really brought that to light. What was harder about that transition for you and what was easier than you thought, what was harder than you thought, what was easier than you thought?

I honestly would focus more on what was easy. The whole, you know, I mean, your entire team was awesome to work with and I think they did a great job of talking about the onboard process and how the onboard process would look and like what we should be doing on the SkyHigh side 30 days out and then 2 weeks out and then a week out. And of course, we were freaking out throughout, you know, like, boy, how can you do it that quickly? But, you know, we just did. And I think we started to see the benefits real quickly. I mean, all the training, the CommonSkill University is huge. I think our entire team, you know, watched CommonSkill University from front to end multiple times. And yeah, I would, I would say there were less challenges than what we would have thought. And afterwards, if you would have surveyed our entire team, everybody would have given really high, high feedback on how it went.

Last question about that, by the way, and I'm so glad because I understand your world better than most people's world because ours were very similar business models and you had so many different working parts. So that resonates so strongly with me. As a leader, what insight do you now have that you didn't have before, or what peace of mind or what equilibrium did that bring you?

Well, I think what I learned was, again, as we constantly talk about improving the customer experience, what really resonated with me after the fact was just seeing the speed at which our people can now generate estimates and presentations and showrooms and things like that and turn those qualifying activities or pre-sales activities into orders. That much more quickly. So we have definitely seen— I've seen as a leader, the amount of business that our people can write is significantly higher now than where it was because of the efficiencies of the system. And then the ability to also just utilize technology like, I know, integrating Loom within, you know, within there. And again, instead of now hopping in a car, driving an hour, meeting for 20 minutes, and then coming back, Again, using technology between Common Skew and other components to just, you know, make the most out of every day has been really big. And I think the other, the last thing there would just be the reporting, the ability to pull as many reports as Common Skew allows me as a leader to pull and the data that is able to be captured and reported on within the system. Is a huge tool.

That's awesome. So Josh, closing out this conversation we've had, thanks by the way for coming on and doing this. Going back to brand immersion, is there an example with either your company and what you've done through your campaigns, through your marketing, or with a client specific that can wrap up this conversation where we started about brand immersion?

Yeah, absolutely. You know, to me, our business is still telling a story through branded merchandise, and that story when told effectively, can create emotional connections between a brand and stakeholders and brand stakeholders. So we recently did a self-promo campaign and we took 3 different products, a notepad, a water bottle, and a phone holder, all which allowed for full-color, full-bleed graphics. And instead of, again, just putting our logo on an item, We had our creative team develop basically a series of icons that tells the story of who we are and what we do. And then on top of all of those various icons, we shared our company core value acronym, which is GRATEFUL, and we're able to then gift prospects and clients with this self-promo campaign and tell them how grateful we are for them. So it was a, it was a campaign that really resonated well with our clients, and it did a really powerful job of telling people who Sky High Marketing is as a company. And again, I know we all have clients that want us just to slap logos on product, and we've got those clients too, but when you really get down to the powerful nature of what branded merchandise can do for your clients, I think we all want to look for those opportunities where we can tell that story through what it is they're purchasing. And part of that is the product that they're purchasing, but then the other element of it is the creative application of their logo in different ways than maybe they've seen it before. And I think that's when the industry really, really gets fun.

I thought it was interesting that even Frank Gehry, the celebrated world's greatest architect, you could say, has clients come to him with a product request about a building. And then he says, what our job is, is the client doesn't know the infinite possibilities. They just know the limited scope from which they are coming to you. They're moving in a fast-paced world. They know they want to do something special. They don't know how. That's where our expertise is. I think often because of our muscle memory, because we do a lot of this, we take it for granted about that expertise and then showcasing that expertise.

We talk about that internally so often of, you know, when we publish, let's say, at our top, our staff faves, which is like our 25 favorite items for this quarter. We talk a lot about not overlooking what is obvious to us that may not be obvious to our clients. And a lot of those are going to be tried and true products, again, possibly, you know, just with a slight twist on it, whether it be creative, creatively, or whatever, where all of a sudden that product may not have even been seen by our clients, or we're now utilizing the product in a little bit of a different way. So yeah, we do have that muscle memory that you can oftentimes fall into kind of a, a daze within you know, how many different products that we carry. But, but yeah, when you have the clients that are allowing you to kind of flex that creative muscle a little bit, those are the projects that become a ton of fun to work on.

Well, Josh, thanks to you and the team. I was glad to meet some of your team at Expo last year, which seems like ages ago now. And man, we've known each other for a long time. And I'm so glad You're part of the Common Ski family now. And just thanks for, thanks for years of friendship and years of just sharing your expertise.

Yeah, no, thank you too, Bobby. It's been a great friendship over the years and great catching up with you. And we'll look forward to another like in-person show here at some point where we can catch up more too.

Thanks so much for tuning into this episode of SkuCap. Be sure to keep up with our latest content by subscribing to SKU Cast on iTunes or to our blog at community.commsku.com. Until next time, friends, thanks so much for listening.