Innovate or Die

Understand the problems your customers face

Innovation
Innovation

We have all heard the old refrain: “You can’t sell ice cream to Eskimos.”

Don’t tell Todd DeMonte, because he currently sells dehumidifiers in the arid state of New Mexico to solve greenhouse operators’ mold problems growing medicinal marijuana plants.

The company he heads, Therma-Stor LLC, has grown under his leadership to become the largest manufacturer of dehumidifiers for both the business and consumer markets in all of North America.

Make no mistake about it, humidity is a big problem in our life, whether it’s in our own homes or for those that operate greenhouses or industrial plants. The Therma-Stor team prides itself on asking customers to try its units and make up their own minds about the quality of the offering.

What does DeMonte credit for his company’s success? He points to his experience at a Mercedes dealership in the 1990s. Mercedes was under pressure to compete against Lexus, so it drove its costs down but sacrificed quality, to the detriment of the brand.

As a result, DeMonte believes delivering quality to customers is paramount.

His team adheres to the philosophy that customers have challenging problems, but they don’t know what the product solutions would be. A horse and buggy owner would never think to ask for the invention of a car.

DeMonte’s team feels it is in the “translation business.” His employees listen carefully to a variety of sources about Therma-Stor products, from customers to sales reps to people using competitors’ products.

They spend their time understanding the problems those customers face and then translate those problems into opportunities their equipment could solve.

Take the marijuana example. In the indoor facilities that grow legal cannabis, it’s necessary to control the lights. When the lights are on, humidity levels can easily be maintained. However, when the lights go off, humidity levels rise, creating serious problems such as powdery mildew, spider mites and a whole host of other things that will ruin the harvest.

Anyone in business is flooded with feedback from customers and the market, so the question always becomes: what can our team do about it?

DeMonte historically segmented the company’s various product ideas and evenly distributed investment across their various brands. He said he got that idea by trying to treat his kids equally.

Unfortunately, the family makes a lousy metaphor for a successful business. Because we love our kids, we don’t fire them!

So instead, Therma-Stor developed a product innovation process that speeds up customer response through various gates to evaluate products. It begins with an analysis of their core competencies, as well as the potential for sales of the product, before anybody engineers or manufactures anything.

We all hear about “The Lean Startup” methodology by Eric Ries, but that applies primarily to software development. Jeff Bezos throws money at his software engineers to innovate. That’s not so easily replicated in the mechanical engineering world, where sometimes it’s hard to get ahold of raw materials or parts from the supply chain to test a product.

As a result, Therma-Stor can compress the testing process and that, in turn, allows it to focus on those projects it knows will create the most value.

That process has accounted for the tremendous growth of the company to become the leader in segments focused on efficiency, capacity or size.

Therma-Stor’s team delivers the most efficient dehumidifiers in the world.

DeMonte hires most of his engineers from the Madison area, where his plant is located. Many are University of Wisconsin graduates. This proves that “Made in the USA” is still a viable option.

We do not have to figure out how to sell ice cream to Eskimos to achieve the kind of results Todd’s company has achieved. It starts with a keen, careful listening process, and then turning customers’ problems into solutions that delight them. As proof, most of its growth comes by word-of-mouth, and Therma-Stor tracks that by ZIP code.

Innovation begins with careful listening and interpreting the needs of the customer. ν

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Dan Steininger is the president and founder of BizStarts. He is also the president of Steininger & Associates. The firm focuses on teaching the tools of innovation to drive growth for companies in all sectors of the economy. Steininger is a former president and CEO of Catholic Financial Life and a graduate of Marquette University and Boston University's School of Law.

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