There are changes in what matters to the customers in the chemical industry. Kevin Huntsman, President of Mastio & Company, shares these trends and how businesses must respond to these insights into the customer experience. Kevin specializes in survey design and data collection in the chemical and energy industries and does a lot of work in transportation and logistics. He has been helping provide data-based insights into customer value for over two decades. In this episode, he openly shares how they gather this data and its impact on how business leaders in the industry should look at their processes and operations. Join his chat with host Victoria Meyer as they discuss the customer perspective and share thoughts on the current state of supply chain challenges.
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Data-Based Insights Into The Customer Experience With Kevin Huntsman
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I am speaking with Kevin Huntsman, who is the President of Mastio & Company. Mastio provides customer value insights across a range of industries. Kevin and I first got introduced when we had them help us. It was at Shell. We had them helping with their polyethylene value studies, and that’s something we are going to be talking about now. Kevin specializes in survey design and data collection in the chemical and energy industries and does a lot of work in transportation and logistics. He has been helping to provide data-based insights into customer value for over two decades. We are going to be talking a lot about that. Kevin, welcome to the show.
Thank you. I appreciate it, Victoria.
What’s your origin story? How did you get to Mastio? What made you interested in this space?
I like data. I like numbers and statistics. Out of college, I worked for a company in a logistics role. My wife graduated and was going to be a teacher, so we moved to the Kansas City area, looking through and trying to find an area that was of interest to me. Dick Mastio started Mastio & Company in 1989. I was fortunate enough to meet him. From there, we talked for a few months and convinced one another that this was a good fit. It has worked out quite well. Richard, sad enough, has passed on, but he built a great foundation for Mastio, and we had carried that and grown the company when I first started in 1996.
I had not realized you were an early joiner to the company.
I was. I love the job, and they haven’t gotten rid of me yet, so it’s worked out well.
We are talking about database customer insights. That is a lot of what you do. Can you give us an overview of what Mastio does? I know you do a wide variety of surveys, insights, and data generation across the chemical industry and elsewhere.
The way to distill this down to a simple level is we are a lot like J.D. Power. It measures a lot of customer perception across airlines and hotels. Mastio does the same thing but focuses on the business-to-business world. When Dick Mastio started this business in 1989, the first project we did was for polyethylene. From there, we grew the polyethylene into high-low or linear-low customer satisfaction studies. We also do PE film market studies as well, where we assess about 32 different markets, who the participants are, where the growth is, etc. In 1996, we started working in a natural gas space due to some deregulation in the government. We do gas pipeline and gas marketer-type studies, like the BP, Shells, and Conocos of the world.
Several years ago, we moved into the logistics space, specifically Less-than-TruckLoad or LTL. That is something we do to this day. In addition to the LTL, we look at global freight forwarding, as well as customs brokerage. If you think about Old Dominion Freight Line, FedEx Freight, or any of the main expediting type companies or freight companies or companies we are fortunate enough to work with, this is important. All the data we do and collect from the companies that we work with we do by telephone. We are making these telephone calls directly, talking with people capturing data. We are very fortunate to work with a lot of different companies. As you mentioned earlier, you and I started working together several years ago during your time at Shell.
That’s cool. Maybe we’ll come back around to some of these other things. Let’s start with polyethylene. That’s where a lot of our conversation is going to be centered. You’ve been conducting the polyethylene customer value study for many years. How has this evolved? Is what you are measuring in what people are interested in different now?
There’s a fundamental component to it that has not changed since the beginning, measurements around the perception of the sales rep, customer service rep, and quality. What’s changed over the last few years, and I don’t think anyone will find this shocking, is the increased attention on sustainability in capturing insights around sustainability, whether it’s recycling, mechanical recycling, or whatever it might be. That has probably been the key thing.
We could use the term omnichannel or however we would like to use it, but it’s the integration of web-based tools and app-based tools for the polyethylene resin manufacturers, as well as that person-to-person type work. Integration sustainability has been a key change over the years to the types of data that we collect.
Do you see customers and suppliers valuing it differently?
Each company values it a little bit differently. It depends on where they are at. For example, Shell is looking at this data differently than Chevron Phillips. Bayport Polymers is looking at it like Shell being a new entrant. There is a lot of polyethylene coming into the market. We spoke about the announcement with Chevron Phillips and then Shell coming online and with what Bayport has done and ExxonMobil. Depending on where you are at in that life cycle of the business is largely how you view the data and how you analyze that data internally.
I’m going to share some of this information. The first is an array of the results you came in from your 2021 study. What are we looking at here?
We do all of this data collection by telephone. One key part of the data that we collect is around what we call customer needs. When I’m interviewing you, let’s say I’m not only asking you to rate the polyethylene suppliers you’ve used in the last twelve months. I’m also asking you how important these factors are when you are selecting between suppliers. We use a scale from 1 to 10, with 10 being critically important. No shocking surprises when you look at this. It’s been very consistent over the last few decades. Outside of a few attributes, I will hit on momentarily, with the lot-to-lot consistency and processability. Proactive communication is an attribute that’s become more important as we have had a number of storms over the last few years.
People’s expectations have increased as well around the levels of communication they expect from their suppliers, consistent, accurate, and on-time delivery. There are two attributes I’d like to point out from an importance perspective. The supplier’s honest and trustworthy, and the supplier always meets commitments. Those are attributes that we measure the importance of that have become more important over the course of time. In the last few years, they have moved up into that top ten and have maintained their position there.
That surprises me. I’m chuckling because I’m thinking, “Isn’t that something that we have always wanted that our suppliers to be honest and trustworthy?”
We do, but sometimes we get so focused as a buyer of polyethylene or another commodity that all I care about is I want it when you say you are going to get it to me, and I want it to work and run. What you’ve got to position yourself is, “If all those things are equal, who do I want to do business with?” It’s those people that are honest, meet their commitments, and are committed to my business long-term.If all those things are equal, who do you wanna do business with? It's those people that are honest, that meet their commitments, that are committed to my business long term. Click To Tweet
Given the life cycle of polyethylene and the consolidation over the years of the providers, and we now have new ones, it’s important to understand what those buyers are looking for. This is one way we look at customer needs. This is one way we capture that perspective. If you like the next slide, it gives us a little bit more of an in-depth view. That previous slide is what people tell us is important. What we like to do is take that data point and build a 2×2 decision matrix where we are looking at that stated weight that you see or we saw on the previous slide. That’s that plot for the Y-axis.
X is a correlation. When we think of correlation, we think of data pairs. To distill this down, when someone rated a supplier high on the likelihood to recommend, generating every popular net promoter score, we can understand what else they rated them high on. We can start to build a roadmap and understand for companies what those baseline requirements are. I’m a huge football fan of the Kansas City Chiefs. I always use that analogy of basic blocking and tackling. That’s where the baseline requirements come into play.
That’s something people expect. That’s what they expect walking in the door. If you want to be a supplier of any variety, you need to be doing the basic stuff appropriately.
That’s the thing with the low impact. It’s not that they are not important, but you’ve got to be as good as everybody else. When we work with companies that are struggling, we want them to focus on those factors. The companies that excel and continue to excel, you point to those conscious differentiators.
Basic requirements, which no real surprise that sufficient inventory is maintained. The order is error-free and processed quickly, the resin is processable, has good quality, and is consistent, and the invoices are accurate. We all like to be billed correctly. What are conscious differentiators?
Those are factors that have a high correlation and high stated importance. There are a lot of what I call soft issues, those relationship factors. You are committed to my business. You are honest and proactive. The CSRs and sales reps respond. You are consistent. You communicate. You can’t use the term communicate enough around this, especially now that the supply chain challenges the world that we live in. For the companies that consistently perform well, those are factors that they are at the top of the game.
What’s interesting to me is, do people care what type of communication they get? Do you guys get into that at all in any of your discussions?
We do. The bad thing is everybody’s a little bit different, so you’ve got to try and cover all the bases and meet the constituents across all different platforms. There’s that ongoing, whether it’s an email or a newsletter. It’s also that sales rep that reaches out on a regular basis. Not necessarily reaching out to say hi, but reaching out and saying, “We have got this. Have you had challenges with this?” They are coming in with solutions to do that.
The low-impact stuff, is that baseline as well?
It is. It’s a parody if competition is sufficient. You are not necessarily going to win any business because you are the best, but you can lose business if it’s a significant gap. You need to be on average. These are sorted in order of correlation as well. The relationship with my customer service rep, even though it’s low impact, it has more importance than a timely invoice. It’s aligning the organization around these factors, getting them where they need to be, and then elevating that performance on the conscious differentiators. The latent differentiators are things that people will tell you don’t matter. They have a very low stated weight but have a very high correlation. If you look at this, it makes sense in flexibility because of all the challenges around the supply chain, getting rail cars, etc.Competition is sufficient. So you're not necessarily going to win any business because you're the best, but you can lose business if there's a significant gap… The latent differentiators are things that people will tell you don't matter. Click To Tweet
Your sales rep is a problem solver. Everybody will tell you price. Price is critical, but if my price is the same and Victoria’s price is the same, who are you going to do business with? What other thing was interesting here, and I mentioned this earlier, is the resin suppliers’ alignment by sustainability initiatives. That’s a relatively new attribute. We are seeing where people will say, “That doesn’t matter.” When you dig into the data and understand it, it’s a critical piece. It’s not going away. It’s only going to become more important to these organizations.
What’s interesting is the areas that you have identified as either conscious differentiators or latent differentiators. I work with a lot of companies, and these are the areas I talk about with them. That’s your customer experience and value differentiator. People sometimes disregard it. Often in the chemical and plastics industry, we think that our product is what’s making the sale or all these other things.
What I tell people is product is replicated. We know that, especially in commodity chemicals and plastics. That’s all very easy to differentiate. It’s going the extra mile, being flexible, and offering that flexibility. Making that connection back to sustainability is becoming more and more critical. I have worked with a lot of different companies and say, “When you are going to your customer, the fact that you are able to support their long-term sustainability that maybe they are not talking about, but it’s a corporate or business leadership imperative is important.” Figuring out how to create the connections off of those points of differentiation is critical.
I couldn’t agree more, and that will continue to be the case. The final slide here is a continuation of the previous slide, but I wanted to include this to look at these attributes over the course of time and how they can shift. You’ve got some that have been baselined since 2015, and the same for conscious, but you get some that move around. One of the key takeaways is some of the things at the bottom that have been low the entire time. The attributes I wanted to point out in the low are around the technical service rep. Several years ago, you could differentiate on that tech service rep. You can’t now. That’s expected. You’ve got a product that you need to test yourself.
You are bringing technical service to the table.
They expect that. You see that it communicates knowledge. Technical service personnel responds in a timely manner. That’s a mandatory have-to-have. The other thing to point out is the continuity around the unique commitments committed to my business. Honesty and trustworthiness have been conscious the entire time.
Whether it’s a plastic study, something we do in natural gas, or something we do in logistics, these attributes often land in very similar locations on the quadrant. Some are especially soft because those people-related ones are the same types of attributes across the whole set of studies we do. They do matter. Price does matter. Don’t get me wrong. As I always say, it’s the big pink gorilla in the corner of the room. Once you set that off to the side, these other factors come into play.
It’s the things that have become baselined that maybe weren’t there before or that baseline shifts. Proactive communication now being a very conscious differentiation point.
Sometimes you almost have to. When you look at this, you got to look through the lens of what else was going on at that point in time. Was there a hurricane? Was there a winter storm? What happened during that time frame can also tend to be something that drives or moves an attribute to a degree and puts it in a different quadrant.
That makes sense. In fact, one of the things I was going to say is that over the last few years, this proactive communication has become very critical. It’s also gotten very exhausting. Everyone, customers or suppliers, no matter where you are, has such a challenging set of churning things going on that has exhausted everyone. Communication and all of this are important. It’s critical, but when you are struggling to be on time, you’ve got to communicate about it over and over again.
It’s challenging across the whole enterprise, whether it’s customer service or the people in logistics trying to communicate to customer service for them to communicate to the customer. I know there’s a lot of work going on behind the scenes with rail cars and telematics around that. We work with a company called Greenbrier that manufactures rail cars. Something they are doing in the industry as a whole is trying to get that a little bit better. The example is, I did a customer advisory board, and the guy is like, “I can track my Domino’s Pizza on my phone. Why can’t you tell me where my freight is at?”
That’s exactly right. I feel the same. It’s the level of transparency we have gotten in our personal lives, particularly around shipments. I know my Amazon package is showing up in a minute, and then it showed up, and then whatever. People have this expectation, “If I can get that for a $0.5 widget, why can’t you have it in a high-value product?” We are getting better.
It’s who pays for it and how they pass that cost on. Everybody wants everything until they have to pay for it.
That’s a dilemma in terms of how anything’s being paid for. I told somebody, “There’s a bit of a leap of faith.” When you are making some of these digital investments, it’s not apparent how the value is going to play out now. In five years, when you are substantially ahead of and have that platform that can make a difference, you are winning. The value is coming through. It’s hard to plan it ahead of time.
It is. What I have done a lot of work in the plastics industry around this is that you don’t want to alienate that existing person that’s in that role. If you think 5 to 7 years from now, I get an email every day or every couple of days from somebody I work with that’s retiring. That person coming in behind that individual has different expectations from a digital perspective. How can you build that for tomorrow yet maintain that information that satisfies the person in that role? It’s a challenge.
I was going to make a comment. We were talking about the expectation that everybody has a good competent technical service team. It’s critical, yet everybody seems to be having a hard time hiring. A lot of those experienced technical service people are retiring. They are aging out, retiring, and moving on to the next phase of their life. Are you seeing or hearing this from the customers that you talked to in terms of that challenge?
That person they relied on for the last many years is no longer there. We see that across all the different industries we are working in, especially plastics, energy, and engineering rail-related positions. With people in the field for the natural gas pipelines, I know of a few companies in Houston that are major pipeline companies that have over 60% of their staff eligible for retirement that is in the field. It’s a challenge, and it’s not going away. How can we develop these kids or young people to want to go into these roles? Plastics is not always the most glamorous job, but it’s a wonderful place to be.Plastics is not always the most glamorous job, but it's a wonderful place to be. Click To Tweet
It’s a great place, and we need to keep making it exciting to keep bringing younger talent into the pipeline and keep it going. On the show, we talked about five marketing archetypes and how they influence marketing behavior. The archetypes we talked about are sales enabler, innovation champion, customer experience architect, customer insights generation, and iconic brand builders.
The archetypes themselves are not necessarily the most important part, but we know that each of our chemical or plastics companies has a different profile. They have different things they are good at. They have different things they want to be good at. Those things influence their marketing behavior. How do you see this playing out when you are doing this work with your customers? Maybe not everyone wants to be number one in each one of these categories. How does that play out? How do you see companies interpreting this information? How do you see them taking action on it?
It somewhat aligns with their value proposition, who they are, who they want to be, and what are those key factors. Not everybody wants to be a touchy-feely company. Some people are more engineering. It has so much to do with the executive team and how they lead the organization. That’s why we think in the Mastio surveys, you get a lot of the base questions that overlap every organization. You’ve got some that are more specific to some versus others.
We do, in many instances, have some questions that are specific to a company because there’s something they want to know. They want to know it and don’t want everybody else to know it, but it’s more applicable to them. We try to have the option to customize some of this as we collect data because every company is different. You’ve got some companies that are heavily run from an engineering perspective, and you’ve got some that are more about the customer experience.
I know you are working with some of the newer entrants. Shell is one that has started up at Bayport Polymers. As a new entrant, you have a choice in terms of what experience you want to bring. What is the value you are bringing to the table? How do you want to interact with your customers? Not often that we have a clean slate. Every once in a while, you do. Where do you see people going that are coming in with a clean slate?
It’s a combination. It goes back to a comment I made earlier. The new ones are very technically driven, not tech service driven, but tech around whether it’s an app or the website experience. It’s more of an omnichannel-type perspective. That’s part of it when they have got that clean slate. Others it’s, “We are going to come in, and we are going to be that more tech-savvy.” From a technical service perspective, we have got more highly engineered resins. It depends on, to some degree, their portfolio of products as to how they approach the market, and then you’ve got a couple of them. I know one of the new entrants that is very much working towards more of a website type but a very superior customer experience through a digital channel.
Before we wrap this up, let’s talk about logistics. You do a lot of work in logistics. Logistics and supply chain have become household words in ways nobody ever anticipated over the last couple of years. What stands out? What trends are you seeing? How do we think about that when we bring it back into the chemical industry?
There are a lot of different ways, whether it’s rail or a lot of the bulk truck Gaylords on LTL carriers. There are a lot of different things. We do see it starting to stabilize and normalize a bit. We have even seen that with the ports. The number of ships waiting to come into port has declined both on the West Coast and the East Coast, so we see some normalization there. The economy slows down whether people agree or don’t agree. There is a slowdown to some degree. You are seeing that with someone, like FedEx Freight, has announced furloughs of drivers. They are trying to closely align their network with the demand but not lose those drivers because they believe it’s going to pick back up. We did see a significant decline in what I’d call the shipper experience in ’20 and ’21.
As a matter of fact, in the LTL study that we did, we saw a trend down on every single attribute we measured in 2021 versus 2020. The industry declined in every single attribute that we measured. We finished the 2022 LTL study. We had about 60% of the attributes come back up, but that still doesn’t get us to the 2019 levels. As you see a little bit more normalization across that, I want to say it’s going to get better, but nothing gets better overnight. It will take time, and it’s going to be somewhat dependent on the provider, what their mix of freight is, and how they can align that more closely to what the demand is.
I imagine that when you’ve gone through a period, as we all have over the last few years of all the supply chain and freight logistics challenges, you set a new baseline of expectation. The bar that you have to cross to be awesome is not as high anymore.
It’s much lower. They have readjusted the expectations in many instances. You don’t have to be as good in some instances to be good. Some of that depends on who you use as a shipper and different carriers. Some have maintained a higher level, whereas some have declined, but we have accepted a lower level of performance for now.
We’ll have to touch back later and see how that has evolved. Kevin, this has been great. What’s next for you as we are wrapping up 2022 and looking into 2023?
In 2023, we’ll do the polyethylene customer experience study. We do that every two years. We’ll also do the polypropylene, which there’s a lot going on in the polypropylene industry. I don’t want to say it’s suffering now, but it’s maybe struggling a bit. We also will do the polyethylene film market study, which is a massive undertaking for the Mastio team. We have been doing that study for many years and do it every three years. It’s a bit different than everything else. That’s in ’23, and then we’ll continue to conduct the various studies around the supply chain and logistics space and hopefully add a few new ones. It’s a busy 2023.
It sounds busy, and I will have to have you back, so we can get that comparison of how things have played out. That’s great. Kevin, thank you for joining us on the show. I appreciate having you here.
It’s been my pleasure. I appreciate it. Thank you.
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About Kevin Huntsman
Kevin Huntsman is the President of Mastio & Company. Mr. Huntsman has a proven track record of managing large and complex projects for clients over the last 26 years. He specializes in survey design and data collection in the chemical and energy industries as well as transportation and logistics. Mr. Huntsman has successfully managed over 600 projects for 200 companies across the globe during his tenure. Mr. Huntsman also brings a host of practical real-world experiences and consulting expertise to each project he oversees based on his years of experience in the research industry.
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