109. The CRM Problem Distributors Don’t Know They Have with Kevin Brown, CEO of LeadSmart Technologies

Karthik Chidambaram: Kevin Brown, CEO of LeadSmart Technologies. Kevin,
thank you and good to see you.

Kevin Brown: Great to see you. Thanks for having me.

Karthik Chidambaram: So Kevin, tell us about LeadSmart. What is that you
guys do?

Kevin Brown: So I've spent my entire career in both wholesale distribution
and manufacturing, and about six, seven years ago got together with a
literally a childhood friend who was a computer scientist and had started a
number of software companies over the years and took the challenges that I
was having in manufacturing distribution both, said there's some technology
that we could apply to this to make people's lives better that I never had
in that side of my career.

So we developed a product called LeadSmart Channel Cloud, and Channel Cloud
is a AI-enabled customer intelligence and what we call smart CRM. So we take
a little different approach to what most people. I always often say that
many people think of CRM as a four-letter word, not a three-letter word.

So we take a very different approach to that and how we help wholesale
distributors and manufacturers both. We have a version for both
manufacturers and distributors, and we have a, a portal that we use as well
that can connect manufacturers and distributors also to share data.

Karthik Chidambaram: But when it comes to choosing a CRM for a distributor,
since you worked on the distribution side of things -

Kevin Brown: Sure.

Yeah.

Karthik Chidambaram: As a distributor, am I better off choosing a CRM let's
say in HubSpot

Kevin Brown: or a Salesforce?

Karthik Chidambaram: Sure. Or when should I go in for a more specific
industry-specific CRM? What are the differences there?

Kevin Brown: So great question. And I think it's something that everybody
should be evaluating very quickly.

There's a mix, as I'm sure you know in your business of different levels of
technological excellence within different distribution organizations. The
real solution that's or though that people or problem that people should be
trying to solve is, do I wanna go try and build something or do I wanna take
something from someone that knows something about our business that has
pre-developed some solutions that can help them?

And, I always struggle in all honesty, it's probably hard to say this while
being recorded, but, sometimes people don't know what they don't know about
what the capabilities or potentials are of using technology. And so by using
an industry-specific solution, sometimes there's tools built within that or
opportunities to help you capture growth within your organization that you
might have never even though of before.

So in a case like ours, we brought not only my background of experience, but
a network of advi - our advisory board that our wholesale distributors and
manufacturers who live the challenges every day, who have helped us build
out all of our feature sets as well. So in our case, most of our customers
are roughly 70% ready right out of the box to solve problems that they might
not have even known they had with revenue gaps and so forth.

So we go very differently than what we call, I like to refer to as
traditional CRM. Traditional CRM is often looked at as a big brother tool of
go type your notes into Salesforce or HubSpot or Pipedrive or whatever it
might be. And I heard a great reference to it a while back. Somebody called
it CRM Saturday because, they're supposed to be recording all of their calls
and their notes throughout the week, but really Saturday while watching
football, they'll put some notes in.

And and we try and take that piece away by really focusing on bringing data
from within the organization. So we connect to not only ERP systems, but,
and we share some mutual customers in that, that sense. But ERP data,
marketing automation, e-commerce data, which is becoming so much more
important, and then as well as that is then what I like to refer to as that
CRM data, which is that interpersonal data.

So we bring the four or five different journeys that distributor customers
have into a single platform. And unlike most companies that are either in
our space for distribution or outside of that, we're truly what's referred
to as a platform where our customers can work with us and build on it to
expand it within their organization.

Karthik Chidambaram: You've got to also use the DCCAP integrator for
seamless flow of data from a customer.

Kevin Brown: Exactly, of course we do. Yes. Yeah, and we have some use cases
with that using your integration tool. And, but what's interesting is
historically, most companies. So back to your question about off the shelf
software versus industry specific.

My experience has been the majority of distributors that will buy a
Salesforce or a HubSpot, specifically like when you start talking about
HubSpot or some of those solutions that are maybe a little more marketing
driven, most won't connect their external data, specifically ERP to that.
Get to companies that have taken a big step or made a large investment with
Salesforce and third party integrators, they might do that.

But where we're at today is I really just have this belief, Karthik, that
right now is there's no less than four journeys a customer has with a
wholesale distributor in particular. One is that ERP data, but that, that's
a rear view mirror look at a transaction or a point in time. There's a
marketing journey that people have as well, and that marketing journey is
what events of mine are they coming to?

What promotions are they taking advantage of? All of those pieces. We have
an e-commerce journey. What are they doing on my e-commerce site? And then
we have all that interpersonal data that when that driver comes to pick
something up at a branch, talks to that, that counter person at the branch
and gives some insight about a project that they just won, right?

The customer service person that's talking to a customer that's shipment was
mis- misplaced or whatever it might be. And then all that sales data, that's
that interpersonal journey that falls into the CRM. We like to bring all
that together into our platform plus other structured and unstructured data
and so forth.

And now instead of using AI in all of those different silos, now we have
siloed AI across the business, we like to bring all that into a singular
platform where now we can use intelligence to really look at what's
happening with the customer. What we find from that is huge revenue gaps
that drive revenue very quickly and fast return on investment.

In addition to that though is there's something of value to the salespeople
because really all the salesperson needs to do is voice record into our
mobile app some of their information about their call that they were on or
the inside salesperson, they're already in a browser window, type a few
notes in.

And now we have all of those functionalities that we bring in this, that
salesperson or the person that's supposed to be typing in, he gets far more
in return than what he put in.

Karthik Chidambaram: Totally right. And especially if a customer is on
HubSpot or any CR for that matter, if they're not really integrating with
ERP, then they're not leveraging the ERP.

They're not leveraging the HubSpot either, right? So it's very important.
But then I'm also a fan of industry-specific CRMs. Yep. I think it kind of
works better. But do you see distributors choosing more industry specific
CRMs or is it more like a -

Kevin Brown: Yeah.

Karthik Chidambaram: Bigger CRM, bigger name, or what is that you see in the
market?

Kevin Brown: So we definitely see a, a huge adoption with with that
industry-specific solutions. In our experience, when we look at the CRM
component of things, is that the vast majority of our customers, I'll say
well over 60%, have never had any solution in their business. And we work
with, two branch organizations up to 50, 70 plus, multi-billion dollar a
year companies from 20 users of our products up to hundreds and hundreds of
users of our product.

And we see that across the board. It doesn't matter the size of the company
necessarily whether their journey has been many have started and failed with
a solution, whether an industry specific or an off-the-shelf solution. So I
think when you have the forward-thinking distributor that says, yes, I want
to accomplish something with this, and they start doing those connections,
they have a good solution.

One of the benefits that, that we bring to the table that's very different
is we're what's referred to as a global strategic OEM partner of Salesforce
that you mentioned. Salesforce is the largest CRM platform in the world, but
uniquely about them is, they just announced yesterday they signed a $5.6
billion contract with the US Army.

What need does the US Army have for a CRM? They have a need for a platform,
right? And so that's where we're seeing this big shift is away from vertical
software products to platforms. And then as I'm sure in your organization,
you're working closely on agents and different tools at Agenic AI that you
can be working with in that a- as well, is that's where we, I see the big
shift moving towards, is this a time and point in time where I'm using
Salesforce as an example is there's municipalities that are running on their
platform, there's hospitals that are running on their platform.

The word sales means nothing. It's that platform for data aggregation that,
that really becomes key. So we're, the partnership that we have with them,
our customers have zero business relationship with Salesforce. It's solely
with us, but they get the infrastructure, they get the cloud solution, the
security solution.

I heard a company a while back make a big announcement about having a
certain certification saying there were only one in the industry with that
certification. So in our company, we have 28 plus different attestations and
certifications at that security layer. So the beauty for a wholesale
distributor is you don't have to deal with that, $30 billion a year company
and the challenges that come with that.

Trying to bring in third party integrators. We've built our software on top
of their platform, and we bring those industry solutions directly to our
wholesale distribution partners.

Karthik Chidambaram: And talking about CRM, it also needs to be mobile
enabled, right? So it needs to work on the phone and everything.

And you also see field sales reps using CRM a lot.

Kevin Brown: Yeah. And so what we're. I mentioned earlier that that idea of
providing something that's of value to them. Historically, the word CRM is,
can be challenging to people, right? It's some people think it's just my
boss's way of keeping me busy, but he'll probably never read it anyways.

We're trying to flip that script completely right now where there's that old
joke that says what's the world's most famous radio station? WIIFM, what's
in it for me? So if we can give what's in it for that salesperson, that
counter person, the inside sales, customer service, if we can provide them a
tool that gives them value, they're happy to use it, right?

They want to engage. And what we're also seeing a lot of, in fact, we have a
customer that's here at this event that we're at that's here. When we did
some training with their salespeople and their internal teams as well we
were explaining how AI works and how when we have good data coming in, we
can get a lot more accomplished.

They actually made, as part of the launch, they did m - a few hundred people
on our platform, that customer, they actually made t-shirts for their team
that said, "Hashtag do your part." Because what they were all starting to
realize is if they put good data into the system, it's gonna enable the AI
to give better answers and data back, as well as, the, the associated data
that we have connected.

So we really see that when we can bring a solution to a salesperson says,
"Wait a minute, if I can very quickly s - get a, a smart alert on my phone,
just like I get something from my stockbroker or ESPN that says, you have a
quarter million dollar quote closing tomorrow and you haven't talked to them
in three weeks, go check on that," right?

That's bringing value to them because they might not have been thinking
about that. The other component of that comes to a spot where that same
person might get an alert that says, "Hey, this customer stopped buying this
subcategory of products two months ago and they are, their AR balance is
very high."

Those are valuable pieces of information that help people do their jobs
better in servicing the customer better, which is very different than typing
in some notes about how do my sales call go. To the mobile component that
you talked about is we have a robust mobile app. In fact, they can do
everything by voice, right?

So they can just two little clicks and they're talking about what's going on
at the customer there.

Karthik Chidambaram: So Kevin, you also run your own podcast. Tell us about
that.

Kevin Brown: Yeah. Three and a half years ago, I was talking to my
co-founder, Tom Burden, who's lifelong friend, as I mentioned. And I said,
for my whole career, I've gotten, as long as there's been email, I've been
getting newsletters."

And I said, we've got wonderful partnerships with organizations like
Affiliated Distributors and NAW here and Netplus Alliance and on and
different groups that we're partnered with. And we work a lot with our
members. And then we've built a large database and said, we should try and
provide something more."

And so I went to Tom and I said, "What if we aggregated our own newsletter
every week?" And he's "That's an interesting idea. What are we gonna call
it?" I'd already been thinking about it. Now I race sailboats. And there's
a, a, a term about going around the horn, which is the bottom of towards the
An- Antarctica the bottom of South America.

And they say going around the horn. There's also a, a baseball term, going
around the horn. So I said, "What if we called it around the horn and
wholesale distribution and manufacturing?" And Tom laughed, he says, "You've
obviously been thinking about this a little bit." So we decided to go for
it. But Tom was smart enough to say that was my monthly compliment for Tom
there.

I don't always do those. But Tom was smart enough to say, "Hey, LinkedIn
just launched this thing recently called LinkedIn Live. Why don't we go
online, go live? We both have large LinkedIn audiences. See if anybody cares
about what we're talking about." That was 174 weeks ago, and we're deep into
it now.

We are getting ready to start planning our 200th episode. And we get
together live every Friday morning. So every Friday, our newsletter goes out
about four in the morning Pacific Time. I'm located in Southern California.
That goes out to people all over the world now. And at 9:00 Pacific, we go
live on LinkedIn Live, YouTube Live, and Facebook Live.

And then we have a wonderful editor and producer of the show, and then he
prepares it all for the podcast formats Apple and Spotify and so forth. And
so we review the newsletter on the podcast every week and how it, how the
news of the week impacts wholesale distribution and manufacturing.

Karthik Chidambaram: And you've done that consistently for 200 weeks?

Kevin Brown: Approaching 200. Yeah. 174, I think, was last week. So my joke
is unless someone's on an airplane, a planned vacation or in the hospital,
we're doing the show. I've done the show from Hawaii on vacation, and I've
done the show from an airport stepping off of a plane. So we try and stay
real consistent.

We have a broad mix of guests. We've had Eric Hoplin here from NAW and Dan
Schubert that have been on the show, Mike Hockett from NAW Paul Kennedy from
DSG that you did a great interview that you did with a good friend Paul.
We've had dozens and dozens of guests. And so it's been a lot of fun and we
think we're doing a good thing.

Karthik Chidambaram: Kevin, thank you so much for joining me today.

Kevin Brown: Thanks for having me. Keep the good work out.

Karthik Chidambaram: Thank you. Yeah.