This issue is a very special one, which we have not had in recent years, partly due to the Covid pandemic. But now it was finally time again, a few days ago we met with our customers in Malaysia for our regularly scheduled community meeting. Over the 5 days, we did a lot of sightseeing and excursions and had a very eventful, fun time together with customers and friends. We also listened to many presentations ranging from project reports to technical news and new products that we would like to share with you in this issue. The presentations are mostly about our pipes or pipe applications, just as our ImProfil mostly reports about pipe projects. Since we as Krah GmbH are a mechanical engineering company that develops and produces the machines for pipe production, it is surprising for many why we focus so much on the pipes, although we do not produce them ourselves.
In order to answer this question, I would like to introduce the System Krah company concept in detail. For the sake of understanding, let’s start at the beginning. Since 1968, the medium-sized mechanical engineering company Krah has been one of the world’s technology leaders in the field of large-diameter pipes. In this industry, everyone knows the mostly black and yellow Krah pipes, which have a diameter of up to 5000mm. However, almost nobody knows the Krah machine that produces these pipes. In this case, the awareness of the Krah pipes and the Krah brand are used to sell the machines through them. We as Krah GmbH do not earn a cent on the actual pipe as the end product, but only on the pipe producing machine and the technology. Although we only build, develop and sell the machines, the end product pipe is still an indispensable part of the company concept.
Since we have excellent capabilities in the areas of development and design, almost the entire value chain can be represented within the company. We assume a social responsibility for the region and for the country in which our company is located - for the Westerwald, for Germany, and for Europe.
With an average training quota of 10%, young people are trained here in more than 10 trades.
The numerous trainees are offered a wide range of work areas, thus generating extensive knowledge within the company. Even in difficult times, our main goal is to retain and fairly compensate all employees. This is rewarded with a very low turnover of employees. Our employees are all part of the company family and the most important element for the sustainable success of our company.
There is also a great responsibility for the production facilities and therefore for the customers. Nowadays, the word responsibility is a very rarely seen word in most established company goals. Rather, only values such as growth, climate targets, ESG, and the like appear there. Yet the value of responsibility replaces almost all other values and is the most significant value of Krah GmbH. We are active in some international standardization committees and thus ensure through its influence that the standards and the produced pipe system harmonize.
The Krah machine is a capital asset that can be used to produce an entire system. This includes, among others, pipes, fittings, and manholes. The pipe systems are mostly used in public infrastructure projects.
Unique selling points
Crucial to the success of our Krah system are the following sales requirements, which must be in place:
- Customer loyalty
- Krah community
For decades, Krah stands for quality “Made in Germany” and thus for high-quality products. Krah pipes are a term in the infrastructure sector that stands for quality and durability. Therefore, it is often the case that many of the customers integrate the name Krah into their company and/or call their pipes Krah pipes. The resulting awareness, as well as the branding of the Krah brand, greatly improves sales opportunities.
However, not only the quality of the products is crucial, but also the intangible value is important to build trust and strong customer loyalty. To this end, we invite our customers to a community meeting every one to two years, where many of them come together in different countries - always at the location of a Krah pipe producer - to give technical presentations, exchange ideas and make contacts.
For us, the social interaction and sense of community at numerous events, in addition to the transfer of knowledge, is a big part of why customers enjoy being part of the community. Ideally, this takes over the marketing of the products by passing on positive testimonials and recommendations among themselves, as well as to potential new customers. Our team can use these meetings and the resulting discussions and presentations to optimize its research and development by taking problems, new ideas and improvements from the customers and then processing them within the company. The community meetings, along with trade show events and company open days, are a big part of the corporate identity that makes our company special. For technical details and other important tools that potential customers need, an in-house magazine is published at regular intervals. This offers our customers the opportunity to satisfy their own customers with regard to corresponding needs. By providing their own magazine, customers, consultants and designers are targeted. Direct customers are thus provided with a convenient way of passing on the information they require about Krah GmbH. They benefit from this by, at best, gaining a new customer without having to become active themselves. Consequently, this results in a win-win situation for the customers and for our company itself.
It is also important for sales success that the Krah machine is understood as a production product. Because ultimately it is the production technology alone that is sold, and not the end product pipe.
How does Krah sell the production technology?
Since the machine is the only product that is actually sold on paper, all sales are focused on maximizing machine sales. While you may hear a lot about Krah pipes, this only serves to help customers sell the pipes and thus increase their attractiveness as a machine supplier. Expansion investments, spare parts, etc., are also sold this way.
The purchase must therefore pay off for the customer in the end. By means of the profitability calculation for the end product included in the business plan, the customer checks the profitability of the machine investment. In this process, we support him with our many years of experience and expertise in order to realize the machine purchase. In this area, we also cooperate with consulting companies and local representatives to obtain information.
Sales are to be optimized via as many profitable sales channels as possible. However, due to the complexity of the machine acquisition and the resulting need for explanation to interested potential buyers, there is currently no serious alternative to personal direct sales. To supplement this, social media platforms are available as communication channels, but for the most part these also focus on pipes for customer support.
In order to realize the sale of a machine, in addition to delivering a profitable machine, the essential task for us is to allay any fears our customers may have regarding a possible bad investment. A so-called “technical fear” is especially prevalent in developing countries. It describes the fear that the machine could not be used and operated properly, due to a lack of skilled personnel, because of local (education) deficiencies. In order to overcome this fear, we like to invest in companies for a limited period of time or establish new joint ventures in order to be able to ensure the proper operation of the machine through local expertise.
These participations are expressly not intended to generate profit or other financial opportunities, but are exclusively confidence-building measures to eliminate technical and commercial fears.
Another fear that drives potential customers is fear of the market. Here, too, we can counteract through participations. The decisive profitable competence of Krah GmbH consists above all in the worldwide excellent contacts to customers, designers and consultants in the pipe industry. In order to take the fear of the market away from the customers, they are given an exclusivity for the production for a geographically and temporally limited market. As a rule, this is done free of charge and serves primarily to retain and support customers.
After-Sales = Pre-Sales
The last important point of a company concept is the after-sales issue. In our company, this does not exist, because here after-sales is synonymous with pre-sales and can therefore be understood as sales. Acquired customers are connected with existing customers through their inclusion in our Krah community. Together with these, a real multiplier effect is created when contact is made with potential new customers. New prospects are brought to existing customers to get first-hand information about production. After all, there is hardly any better advertising than an honest recommendation from convinced customers. Optimally, direct customers thus sell the machine to further potential customers.
In addition to the fears already mentioned and the membership in the Krah community, the close connection with the Krah Group also simplifies the spare parts business, making the purchase of a Krah machine more attractive. Through a minority shareholding in the customer’s company, we gain an insight into the economic figures and can thus better verify business plans in the future and thus learn through best practice.
Since many customers voluntarily use the name Krah for the pipe system or even for the company itself, thereby massively increasing the level of awareness, the company can market itself much better without having to become active for it itself. The added value of strong branding is particularly evident here.
In summary, it can be said that our company clearly focuses on the customer and the product. To remain successful, creative sales systems must be applied that set the company apart from others. These are not always immediately understood because they are a somewhat unconventional, but that is our unique selling point. After all, a mechanical engineering company producing in Germany is now no longer able to survive on the basis of a good product alone and has to find other ways of doing things.
It is to be hoped that Germany will continue to be a location for industry and that the country will take responsibility and establish the framework conditions for companies like us.
With this corporate concept, it will hopefully now be clear to everyone how the Krah company sells its machines via the end product pipe. Even though it is a special concept, it seems to work very well and we are happy about every single person in our Krah community who goes this way with us. We would like to thank everyone who attended the community meeting in Malaysia for a great, fun and educational time and hope you have fond memories of this time. For us, this community is one of the most important points of our corporate concept to make our concept work and be accepted. We are therefore all the more pleased to have such a great community and cordially invite all interested members to become a part of it. For those who were not there, and for those who would like to look back at them, we have published all the presentations in this issue.
We are a strong community, so be a part of it, preferably an active one! Enjoy reading!