Tony Battaglia is the director of marketing at Permatex, Inc., where he is responsible for the company’s product and market management groups, as well as the creative and marketing services departments. Battaglia is a 17-year veteran of the automotive aftermarket and has been with Permatex since 1989, when the company was part of the Loctite/Permatex organization.
As Permatex approaches its 100th year anniversary, the company continues to maintain its position as an established leader and innovator in the service and repair chemicals market. Join us as Battaglia shares a bit about the company, including how Illinois Tool Works’ acquisition of Permatex last year has helped the company grow, as well as some insight as to what lies ahead for the company.
Permatex was acquired by Illinois Tool Works (ITW) last year. How has this changed the company in terms of market position, financial strength and expanded business opportunities?
It has been very helpful from a variety of standpoints. Previously, we were owned by an investment firm, and now as part of ITW, we belong to a $13 billion-plus organization that owns 700 plus companies. They are very decentralized though, so we operate independently. However, ITW does train all of its companies to operate efficiently by using 80/20 simplification processes. That has helped us to focus better on customers and products. Financially, it has allowed us to step up our market research, category management and website investments. Our expanded business opportunities will come from acquisitions, which drives ITW growth. Permatex is an ideal platform to bring on additional aftermarket acquisitions in the future.
As a provider of automotive maintenance and repair chemicals, what is Permatex’s position on technician training? Typically, when we think of training programs we think of hard parts. Why is a strong training program important for chemical products like those Permatex provides?
Obviously, hard parts have always been the traditional focus of technician training but our products are used in so many hard parts applications that they have taken on a more important role. How they are used can make a big difference in how well the job turns out or whether it comes back later. Our products make service and repair parts installation easier and more reliable. So, we think it’s important to teach our customers how to use them properly. Once the techs learn how to use them, they can be confident that they’ll do the job right the first time and avoid potential comebacks.
What sort of training do you offer to your end-users, the technicians?
We have several training programs at Permatex but the most significant is our “hands on” clinic. Since 1999, we have conducted product usage clinics for technicians, fleet mechanics and vo-tech students a wide range of customers. Our training clinics are planned and scheduled by a dedicated in-house manager and run by our technically trained direct sales force at “host” shops around the country. Generally, the clinics last about an hour and focus on our key products gasket makers, threadlockers and lubricants. We cover a lot of ground, and the technicians come away with a sound understanding and familiarity about using our service chemicals on the job.
This past February, our clinic program accomplished a remarkable milestone when we successfully trained our 100,000th technician. When you think about it, the milestone was very noteworthy. With the universe of U.S. service technicians estimated at 900,000 by the AAIA Fact Book, that means we trained more than 10 percent of the market.
Permatex also recently released a free training DVD to vo-tech schools around the country and also through Tomorrow’s Technician magazine. It’s a professionally produced video, focusing on our form-in-place gasketing and chemical threadlocking products. It’s very similar to our training clinic, but accessible to many more people than we are able to reach in person. The video can also be viewed online at our website.
In what other ways does Permatex try to reach out to, and educate, its customers?
The Internet is certainly one way we reach out to trade or end-user customers. As web usage in the aftermarket continues to grow, we are committed to staying ahead of the curve in both web performance and content. We re-launched Permatex.com in March of this year. Our goal is to make the website as useful and relevant as possible for professional technicians, do-it-yourselfers and trade partners.
Improvements were made for easier delivery of Material Safety Data Sheets (MSDS), downloadable video, a resource center and an “In The Spotlight” feature. Some new features being worked on include a Spanish language conversion of our site, "Where to Buy" and "Buy Online." I know “Buy Online” is a touchy subject, and it is being approached with care so that we do not disrupt current trade channels. But, we do view it as a needed customer service.
Motorsports marketing is an increasingly popular marketing tool for many aftermarket companies. Is Permatex involved in motorsports and if so, in what capacity?
We’re involved in an NHRA racing program with the Follow-a-Dream racing team. It’s something we strongly believe in because our relationship goes beyond the typical racing sponsorship. Follow-a-Dream is actually a non-profit organization, led by Crew Chief Jay Blake, the only totally blind crew chief in professional racing. Jay is also an exceptional motivational speaker and gives talks at schools around the country about how he overcame the adversity of losing his sight after an industrial accident. Jay’s message is very positive and inspirational for young people, and this is something Permatex is proud to support. On the racing end of it, Jay Blake has a great winning team that we expect to grow with in the years ahead. We see a great value in NRHA motorsports because our professional technician customers and DIYers enjoy the sport, and it compliments racing programs conducted by many of our retail and traditional customers.
As the company continues to expand its product line, how are new products developed to meet the changing needs in the marketplace?
We have an ongoing new products team, made up of a cross-section of the company, including R&D, manufacturing, sales and marketing. We meet on a regular basis, but we depend heavily on end-user research and input.
This year, we conducted a major research project where the goal was to go out and talk to end-users (technicians) to better understand their usage and appreciation of our products. It was a two-part effort. The first was a study based on typical usage during a period of time. The techs kept diaries of the work they did and noted how our products were used. The other part was a focus group led by IMR, a respected research company experienced in the aftermarket. We learned a lot about our products. Not only what our customers liked and didn’t like, but also what they wanted to see in new products and new ways of using our existing products. We are confident that many innovations and new products will spring from this research in the next couple of years.
Category management is a highly talked about issue for the aftermarket. How does the company use category management?
We were early supporters and participants in the category management effort for the aftermarket. It has evolved greatly in the past few years, and it’s good to see the beginnings of category management now being applied to other areas of the industry. It brings a new approach to the line review and general sales process for everybody. Buyers and sellers can now talk about product sales facts, rather than make estimates and guess at what is the best assortment. Category management has been a big factor in helping us deliver some of the highest front-end GMROI profit numbers in the aftermarket. We have used the category management process to delete our own items, and add competitive items. In other cases, we have consolidated two peg items into one package and peg, and have developed new items where the need for a higher price point premium item was established. The focus on the scanner sales numbers has forced everyone to pay attention to service levels more than ever. So, we also use it as a final measure in our efforts toward 100 percent fill rate and on-time delivery. That is something that is good for the entire aftermarket.
With the financial backing and support of ITW behind the company, does Permatex plan any acquisitions of its own? Or are there any plans to grow the company in other ways?
We’re interested in bringing on another major brand or company. We’re also interested in smaller ‘fold-in’ company opportunities. We have very broad and deep distribution relationships throughout the aftermarket and beyond. We see that as an advantage to smaller companies that could make use of our distribution network and sales strengths. We’re regularly reviewing company and brand acquisition growth opportunities.