Through its Better MRO and MRO Go initiatives, MSC is working to be a consistent source of materials as well as innovation and cost-saving solutions for its customers — building a growing sense of loyalty from a changing workforce in the process.
MSC Industrial has mastered the art of the unplanned demand. When companies find themselves with a spot-buy need, the 78-year-old distributor’s 300,000+ customers know they can get nearly all of MSC’s 1.5 million SKUs delivered to them by the following morning, more than 99% of the time. But MSC didn’t become a $3.2 billion publicly traded company by simply meeting existing customer expectations. The distributor is continually innovating and expanding its value proposition to anticipate where the industry is headed next.
“Our customers want a whole lot more from us when it comes to their operations,” says Steve Baruch, executive vice president, chief strategy and marketing officer. “Now, we’re doing more to help our customers produce more.”
Dually headquartered in Melville, New York and Davidson, North Carolina, two ways MSC is making that happen are through its Better MRO resource website and its exclusive customer engagement process, MRO Go.
About two years ago, MSC launched its Better MRO website (MSCDirect.com/betterMRO) with the goal of “serving as the hub of a community,” bringing supplies, customers and experts together in one place, explains Baruch. It’s also designed to address the industry’s growing skills gap, adds Kathryn Nerko, MSC’s eCommunity marketing manager, who runs the site. Nerko notes that by 2025 there will be 2 million unfilled jobs in the field. With Better MRO, “we’ve grown from being more than a tooling supplier to become a solutions provider for customers,” she says. “Manufacturing professionals need a single trusted source for information on an everyday basis.”
There is no product advertising or sales aspect to the Better MRO site. Instead, it features articles on a broad array of topics of interest to manufacturing industry professionals, as well as topic-specific chat forums for registered participants, access to conference videos and more. “We’re leveraging the trust that we’ve built with suppliers, with customers, and parlaying it over to this platform where they have confidence that when they source information from Better MRO, they can trustfully rely on the fact that it’s good guidance. It’s objective, there’s no hidden agenda to it,” says Baruch.
A small team of editors and IT department workers keep the site running. Better MRO brought in a few thousand users in its first months. But it didn’t take long for that number to steadily grow. As of June 2019, it reached nearly 100,000 active users a month, says Nerko. The users are engaged, too. They spend several minutes reading multiple articles, clicking through to other MSC assets, such as interactive digital calculators, trade show listings and live event coverage. Registered users on MSCDirect.com have access to the chat forums as well.
“In the life cycle of a web property, it’s in its infancy,” says Baruch. “Staying with the baby analogy, we think this is a pretty bright baby and we’re pretty excited about how precocious this little guy is. Our customers are really responding well, and we’ve got lots of ideas to continue to grow and develop it.”
One factor contributing to the popularity of Better MRO, he adds, is the changing demographic of MSC’s customer base. The company is engaging with millennials, and increasingly Gen Z, in the way they want to engage — digitally, Baruch says.
But, he adds, “We’ve got this saying around here. That is, ‘As the world becomes more and more digital, people matter more, not less.’” That sentiment is playing out in MSC’s larger evolving approach to customer relationships, centered around its MRO Go strategy.
While online capabilities are a must-have, MSC is also deeply invested in employing experts such as metalworking, safety, fluid power, supply-chain and other specialists to serve its customers. “There is no substitute for having that expertise come in, walk the floor, understand what’s going on, and then make actionable recommendations about how we can make your brand better,” says Baruch.
That’s where Darr Greenhalgh, senior manager of customer solutions, comes in. He runs a team that interfaces with customers at their locations using MRO Go as a basis for those interactions. “Our purpose is to fuel potential. To find ways to service our customers to help them to grow their revenue. That purpose turned into a strategy for us,” he says. “That strategy is around winning the customer’s trust, around optimizing the supply chain, around focusing on the shop floor, around bringing value in much greater detail than in just pricing.”
It’s about operationalizing the company’s tag line: Built to make you better. The MRO Go model manages the customer lifecycle, in four different phases:
1. Go See: Discover Opportunities. “This is where we understand the customer, define the model and propose a mutual solution,” says Greenhalgh. “We tell them, ‘Our experiences in the industry from having done hundreds of these tells us that when we see these conditions that we just saw here, here are the five or 10 things that we’re going to recommend.’ Solutions, people, resources, specialists — we might propose a number of different areas. The customer might come back and say, ‘I’d like to attack five of those.’”
2. Go Do: Customized Action Plan. “This is the implementation phase,” he says.
3. Go Save: Measurable Improvements. “This is where we document as well as measure our savings that we’re bringing to the customer. We know that we’re not going to be successful in a long-term relationship if we’re not bringing savings,” Greenhalgh says. “We’ve got to continually bring value to our customers.”
4. Go Again: Review. Improve. Repeat. “This is where our continual improvement review process kicks in,” he says.
Baruch sums it up: “We take really highly experienced, talented, capable consultants, point them at our customers in different ways, and we don’t charge them overtly for that consultation,” he says. “But as we can provide value, they can reward us with their business, and that relationship works well for both of us.”
The process creates extremely loyal customers, with the most engaged growing at four to eight times as much as those who are not engaged, according to Baruch. Overall, the MRO Go initiative has brought more than $400 million in confirmed, documented savings to customers, says Greenhalgh. Unverified, it’s more like $600 million, he adds.
As for the future, Baruch says MSC’s customers are drawing its consultants into other aspects of business management as well, connecting the dots between areas where they’ve already established trust, to engage them with further solutions. For example, crib optimization. “We will go into a customer’s area where they hold their inventory, and we will provide design optimization in terms of location of parts, help out with labeling, with racking, with lighting, and provide all of that design information that the customer can then use to create and to work with us to create a better crib,” says Greenhalgh.
“As we’re going to continue to work on ways to optimize the plant’s floor, it’s not going to be limited to MRO or metalworking or what we’ve done in the past,” adds Baruch. “We’re really listening to the voice of the customer with where we can add the most value, and then look for ways to scale that over time.”
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