KYC 28 | Grow Your Business

 

Business growth is unattainable if you don’t engage with the very people that drive it: the customers. Kristy Knichel is a 24-year veteran of the transportation and logistics industry who understands that listening to your customers is the number one way to grow your business. She is the CEO of Knichel Logistics, a WBENC-Certified Business Enterprise (national certification for women-owned businesses) with serious growth goals in the next three to five years. In this episode, she joins Betsy Westhafer and Tony Bodoh to share some customer engagement strategies that can drive your business to the next level. Kristy’s ability to roll up her sleeves during times of turmoil (such as the pandemic) has led to stronger engagement in Knichel’s workforce and within her customer base. Join her in this conversation to learn how she did that and more!

Watch the episode here:

Listen to the podcast here:

About Kristy Knichel

KYC 28 | Grow Your BusinessKristy Knichel, a lifelong Pittsburgh native, is a second-generation logistics executive. Since taking over as president of her company, Knichel Logistics, in 2007, Kristy has been the driving force behind their yearly growth and reputation as one of the top service providers within the IMC community.

Kristy’s proudest accomplishments are winning the inaugural Distinguished Woman in Logistics Award from the Women in Trucking Association and her appointment as the Intermodal Logistics Conference Chair on the TIA Board of Directors.

Today Kristy’s focus is on expanding Knichel Logistics footprint via strategic development and continuing to offer her team members the opportunity for growth and self-improvement. Kristy currently resides in Grove City, Pennsylvania with her husband Jason and her son Brayden. She is an avid Steelers fan and enjoys spending time with family and friends on camping trips.

The #1 Way To Grow Your Business With Kristy Knichel

CEO Of Knichel Logistics Shares Customer Engagement Strategies

Welcome to the REALLY Know Your Customer podcast.  My name is Tony Bodoh and I am the CEO of Bodoh International’s and the co-author of the best-selling book  ProphetAbility.  

This is Betsy Westhafer.  I am the CEO of The Congruity Group.  We are a consulting firm that helps clients with Customer Advisory Boards and I am also the co-author of the number one best-seller, ProphetAbility, along with Tony.  How are you, Tony?

I am doing great. I am looking forward to this interview.

We covered a lot of great ground when we talked to Kristy Knichel of Knichel Logistics. She’s an extraordinary leader and that came out in the interview. If you are reading this and are a leader, this is one you don’t want to miss. She has some great insights, particularly as it relates to coming through the challenges that we have faced during the pandemic. I found that she is a CEO who understands what it means to really know your customer.

She talked about how important it is to listen to your customer and continually ask what is it we can do to help our customers grow. She’s creative. They are doing well but she’s not content just to sit back on that. They are always looking for innovative ways to help serve their customers. She gives some of those examples in this interview. By virtue of being someone who leads by listening, she does that with her team too, which I found extraordinary. She works to understand, “What are the challenges my team is having? How can I support that as well?” She’s not afraid to roll up her sleeves and dig in to be locked in arms with her team.

To give you a little background, Kristy is the CEO of Knichel Logistics. It’s a company that her father started and she has been there right from the start. She worked with the company for as long as it has been going. She has been in the logistics industry for over 24 years. In 2020, of all years, she was named Influential Woman in Trucking. That was a pretty significant title to be given, especially for a woman in the industry that’s always been predominantly male-oriented and driven by men.

The company itself is a small family company. It started small with a few clients and they have grown into a logistics powerhouse over the years. As you go through this, you will learn that their goal is to be a $250 million company in the next 3-5 years and they are on track to do that. They have been growing at a massive pace. To be able to watch that growth and learn about Kristy’s path that she took and how they go about that has been phenomenal. I’m glad we get to interview Kristy on the show.

Let’s get to it, Tony.

Kristy, it’s great to have you here. How are you?

I’m doing great. Thank you so much for having me.

We have already given our audience a little bit of background into you and your position in your company. Can you fill in the blanks a little bit and tell us about your career path over the years?

I had come right out of college. I was going to buy a pizza shop. I didn’t finish college. I asked my dad about buying this pizza shop, “What do you think about that?” He thought that wasn’t a great idea at the age of nineteen because I wasn’t going to make a lot of money. He then said, “Why don’t you come work for me?” I didn’t know what he did completely. I started to work for him when I was nineteen, back in 1997. I came in at the bottom being an intermodal dispatcher and worked my way up through the company doing sales, pricing, HR, claims, traveling, our truckload brokerage, LTL. Every piece within my organization has been touched by me. I became the owner of the business in 2009. Now I am the majority owner. We are a woman-owned certified company and I’m the President and CEO.

On this show, we focus on customers. Tell us about your typical customer and the relationship that you look to build with your customers.

We have customers of all shapes and sizes, from a small customer up to a large customer. Our general is your small mid-size type customer. We do ship a variety of different products or commodities but we do a lot of food products. We like to give our customers special attention and be that different carrier out there for them, especially the smaller mid-sized customers that I feel need it. We also have the larger ones too that I explained that we can also pivot and be more flexible with than maybe some of our larger competitors. We would like to be able to make sure the customer can get somebody on the phone with us and talk to a human when they need us and be able to give them solutions or talk through all the issues that are going on in the industry in particular.

Speaking of issues, what are some of the typical problems that you are able to solve for your customers?

Solutions for their transportation needs. If they were not getting their freight picked up in a certain area due to a provider that maybe can’t haul it or maybe the pricing went up, situations like that where we can look at other options for them and give them numerous different ways to ship it potentially. We had a customer years ago that couldn’t move a product from Texas to Florida via trucks because the pricing was high. We were able to come up with a barge option to ship from Texas over to Florida, offload it, transload it and it was a cheaper option but it was a solution that you might not think about doing.

KYC 28 | Grow Your Business

Grow Your Business: Probably the biggest challenge for any company in this pandemic is the communication between everyone when we used to sit next to each other in the office, and you can hear and see what’s going on.

 

It sounds like you work to be the creative partner for your customers, always be innovating and looking for ways to do things differently in their best interest. Is that something you have woven into your culture intentionally? Talk to us a little bit about the customer-facing culture of your company.

We started the company with customers that my father had previous to opening the business. Years later, we still have a lot of these same customers that have been on board with us. We have grown with these customers and grown into other modes of shipping. Due to their needs, it’s made the company open up these other modes of shipping like the LTL and truckload side to service those customers. In the same token, we have also had employees that have been with us since the inception of the company as well that have been here fifteen plus years.

I have a woman that started back when I did probably a year after I started. She has been here for over 23 years. We have a good bit of people here about 15 and 8 to 12 years range as well. That goes hand in hand with taking care of the customers. You have those same people that have been here for a long time dealing with the same customers. They have grown with the business. They understand it. That was extremely important about our business, taking care of our people then takes care of our customers so they stay, especially in a business where there is high turnover with employees and we don’t have that within our company. It has been a blessing. At the end of the day, it’s all taking care of the customer.

Talk us through some of the areas of growth that you have seen. The company has changed since you have come on board. You are growing in particular areas that may not be expected because your company is different than most of the other transportation companies out there.

We are heavy focused on the intermodal. Eighty percent of our revenue is shipping on the rail side of things. That is what we did initially when we opened the business. As we started to grow, we brought in some salespeople. We were able to then go out to those customers and offer LTL services because it was a need. We knew we had to continue to grow. They had truck business. We were able to open up a truck division as well and start to grow that for those same customer bases and then bring on additional customers as well.

LTL down the road more from when we opened up years ago, we partnered with a company called BlueGrace Logistics for a strategic reason. They were about a $450 million company with an LTL spend. We were able to use their pricing direct with carriers. There was a fee involved but it made us so much more competitive. We were able to grow that business probably ten times the size that it was now. That has helped the company significantly grow.

On top of that, we also have an agent program that we probably rolled out a few years ago. We have had some throughout the years like sales agents that bring in opportunities and our staff then operates it. We have some operating offices. We have roughly 30 agents on the books. A big piece to our growth strategy even going forward is to continue to grow that out and make that even a bigger piece of the pie here at Knichel. Another thing we did back in 2012 is we bought a local truck brokerage company to also bring on their revenue to help beef that area up. Those are the biggest things that we have grown here at Knichel since our inception. We also have plans to continue to grow down the road and expand upon that.

When you are listening to your customers, how do you know it’s time for you to start looking at growing a new division or new part of your company?

At the end of the day, it’s all about the customer. Click To Tweet

When you are entrenched with a customer doing so much business with them and they want to give you more business doing something that we don’t do, that’s something I want to be able to do because I don’t want them to take the business somewhere else to a company that can. That is a big piece of us making those decisions. I also feel many companies out there do offer all those different things. We do have strategic partners that we use internationally because we don’t do that or air freight, for example.

Down the road, I want to be able to have that piece as our own so we are like that one-stop-shop and be able to offer those services. We probably could get a lot more business for international from our customer base. We are listening to our customers having those conversations and if they are wanting us to do it and I want to be able to have those services to grow the company, that is going to make us do that going forward.

We know that the pandemic has been a tough time, particularly with the supply chain. Talk to us about how you have been able to weather all of the challenges that the pandemic brought and where things stand as we start to emerge from this. Walk us through what that’s looked like for you.

Initially it looked like maybe it wasn’t something that was going to be too long of an issue to now it’s been a year that our people have been working from home. The first thing was getting everybody working from home and then being able to have connectivity, better ways to have conversations with everybody working from home and not being in the office. Adding technology to it, whether it’s the Zoom, additional meetings, especially to stay in touch with the customers and try to be as proactive as possible with all the different issues that have come up.

Some of the challenges we thought were maybe going to go away and it wasn’t going to be as difficult going into this year but then the weather hit. When the weather hit, it pretty much shut the rails down for a few days. In some cases, it could take 1 or 2 months to even recoup or get things moving again. That was especially challenging for our team. The constant rescheduling of appointments, whether it’s picking up, delivering, freight not being there on time at all. Training our people to try to be in front of the customers knowing that they are not going to want to hear what you have to say but we are giving you the information and trying to do the best that we can with it.

I had to take an approach where I started making a list and calling customers myself direct and making sure that I’m here. I’m working on these issues. I contact the rails. I’m in contact with them on a daily basis also our carriers. I’m talking to owners at specific carriers that we are using and making sure that everybody is on the same page and that we are all communicating the best we can. Probably the biggest challenge for any company in this situation is the communication between everyone when we used to sit next to each other in the office and you can hear and see what’s going on. That has been a challenge for us but it has got a lot better.

We are talking about coming back to work in May 2021 and starting a slow process of getting the people back in. From the operation side, we do think there has stuff that is being missed that when they are here more as a team, it’s going to be better overall for our customers. That is something that we see that is going to be a benefit to everybody. The challenges that we have seen in 2020 are unlike anything I have ever experienced in this business. It taught us all to make sure we reach out to my network and the people I know, me making some phone calls and doing those talks do help.

It took a while too for our customers to understand, “Is this just your company or is it this company?” No matter what end it was coming from or other competitors of ours, they were all having issues in different areas. Some can help better in other areas than others can. We all have niches in different areas where we might have more inbound or outbound to help certain customers. If we were not having those conversations with them, you don’t know what you can do to help them even more. By having the conversations with the customers, they were appreciative that I did reach out. I understood the situation because they were dealing with it from all ends.

KYC 28 | Grow Your Business

Grow Your Business: The most important thing is making sure we take care of those customers first. Anything that we can do extra coming out of those specific markets would be after the fact.

 

The good thing about it is we are communicating a lot more than we ever have. You are getting conversation from potential customers that maybe wouldn’t have talked to you because they didn’t need you a couple of years ago. At least building new relationships, tightening the relationships that we do have and then trying to find solutions, whatever that might be, shipping different modes, and finding different ways to get the job done.

One of the things that I have observed is, as hard as this time has been, there have been some good things that have come from it. The idea that you have to proactively communicate with your customers and whether or not it’s part of your job description was a good thing to come out of this chaos that was thrust upon us.

With the sales team, there are a lot of issues for them. Especially if you were coming out of California, the market is bad. You can’t even onboard new business. The railroad is making all kinds of changes there as well. To tell a sales guy that lives out in California, “You can’t sell outbound California now because of the situation.” It makes it difficult. In the same token, there are a ton of customers calling in and there are a ton of potential customers that maybe we can’t even help now but start building those relationships. Maybe down the road when things change, at least you have that relationship because that is the most important thing.

Years ago, most of these people wouldn’t even pick up the phone or answer because they didn’t need to talk to anybody else. You never know. They might have other businesses in other areas of the country. We are struggling in certain specific areas like LA and Chicago. In the same token, we were picking up business in other areas too. The biggest struggle for me is not being able to help our incumbent customers that we have had for a long time as much as we could. To me, the most important thing is making sure we take care of those customers first. Anything that we can do extra coming out of those specific markets would be after the fact.

Coming out of the pandemic, as we approach the end of it, who knows exactly how long it will be, what do you see are some of the strengths that your company has developed in this process? You mentioned proactive communication is up. What do you think you want to take with you that your customers have responded well to into the post-pandemic era?

The proactive communication and letting them know what was going on in the industry even. For example, when you can’t get capacity for a customer that we were supposedly able to through a door-to-door product. I thought we were going to pick up their shipments and then we were told we couldn’t pick them up and then explaining to the customer, “This is what’s going on in Chicago. This is what’s going on with the rails. This is what causes this situation.”

A lot of companies like myself aren’t necessarily putting that information out there consistently. It’s not that the carrier doesn’t have a box and can’t do it. This is an issue that is going to be 2 to 3 months long because the contractor at the ramp isn’t doing the job and they are replacing the contractor. It’s letting them know what is going on industry-wide and specific markets, especially where they are shipping out. A lot of these customers don’t even understand that. They expect things to move and be okay.

Educating the customers as much as we can, giving them options and truly being that resource for them to, “What else can we do? Can we ship it in a boxcar? You can get four shipments for the price of three in there if we can get that moving. If you can wait a month for your product to get there.” Different ways to interact. I have my team working with a consultant to hone in on the customer service skills for them, picking up that phone and trying to talk more than email because that has been another struggle we had and trying to force that. I do think being in front of the customers, being on the phone with them, educating them has been huge for us.

The hardest thing for many of us is thinking we had to know it all when there is no way that we’re going to. Click To Tweet

Do you find that the customers are embracing that education and that it helps the overall relationship because they do see that, “This is a global problem? I have this one partner who is trying to help me navigate the whole thing.” How does that evolve in terms of deepening those relationships?

It does for a good bit of them, probably not everyone. The fact that we are sharing information that they can then go to their bosses and talk about why they were having these issues because sometimes it’s like, “Get it done.” They don’t understand why it’s not getting done. That is huge. Throwing data at them, for example, one of our largest customers that we have had since the company has been around and prior, they are out of LA, we were having issues getting enough equipment for them. Part of that is the rail was not having as much capacity they could give us. If we didn’t have it ourselves, we couldn’t pick it up. Explaining to them the main contact, “Here is the data for each of your locations.” She was getting phone calls saying, “We weren’t picking up freight for certain customers.” When I sent her what we were doing it was like, “Now I see.”

She went back and asked me after we addressed the issue and we were able to get more capacity for them, she wanted another sheet that showed the improvement by location. We ended up sending that on and she was thrilled to be able to share that with her team to say, “I want to manage it here. I want to use Knichel. We had a couple of weeks that were not great but that was also when the UP shut down for three days. It was beyond our control and something that’s going to take a while to recoup from but we did have a significant improvement several weeks later.” That stuff helps her and her management team and it makes us look good because we finally address the issue.

We interviewed Joe Lynch at the beginning of the pandemic. He was talking about how a lot of the trucking companies he has consulted for are like, “Send me a report.” They don’t have that personal relationship to understand what the data means. What I understand from you is it’s not about sending data. It’s about putting the narrative around that. What does it mean to you once they understand that they can request, “I need to know even more.” I love the fact that you can show improvement, “We may have had a bad few weeks here but now we are showing improvement.” That type of communication is essential.

In a number of the interviews we have done, the CEOs say the same thing again and again. It’s about showing improvement, especially in the time of the pandemic. I know you are delivering on a large scale. You are working with boxcars and that. In your world, how has it affected you that retail stores have been closed for so long? It’s like, “The retail experience is now the box that lands on my doorstep.” How has that affected what you were doing?

The UPS, Amazon, FedEx, during this whole pandemic, eCommerce went booming. It was already coming but it was then fast forward. Those are the customers’ premium services. They were getting a lot of the capacity that was out there, paying that premium price to get that equipment. That affected us in the way of not being able to get the capacity that we might have been able to because of how many people were shipping to their homes or the eCommerce situation in general. I don’t think it has taken anything away from us as far as shipping. We do a lot of to DCs and warehouses.

Even though there are not those stores everywhere for certain companies, you are still shipping products to warehouses where they are going to be held in different markets and areas for when someone does order that. It’s then going to come out of that warehouse and ship to that residence. It hasn’t affected us in a way that most people would think, shutting down stores. We didn’t do a lot of retail, per se, like clothing and that type of stuff. People are still buying that stuff. It’s going to a different warehouse or holding facility instead of an actual store itself.

Those are the two ways that affected our business because eCommerce is going to continue to grow and get even bigger. There is still going to be space for us there. Many years from now I don’t know how that is going to look. Walmart has its own fleet on the rail. Amazon already has their boxes. They are trying to buy every piece of it, whether it’s the barge, ship, or plane. At some point, I don’t know if they will need additional companies to help them get all their stuff delivered or not. We keep an eye on that and see how that goes. There is going to be a lot of demand there and a lot of need for all the different shipping that we still do.

KYC 28 | Grow Your Business

Grow Your Business: You grow your business by letting smarter people continue to do the things you can’t do.

 

We had the opportunity to chat with you prior to this and something that you said got our attention and that was about surrounding yourself with people that are smarter than you. Talk to us a little bit about what you meant by that.

I had hired Jon Krsytek, our current COO. He has been here for many years. He started in the pricing department, moved up into intermodal and then was running all of the operations. I remember when I wanted to promote him to COO, I believe he was 34 years old. My dad thought I was crazy because he was young. He had a college degree and I didn’t. I said to my dad, “I don’t care what age he is. He is the smartest guy I have ever met. He knows a lot more stuff than I do. He is a data guy and I’m not.” He has been my best hire here. The hardest thing for me was thinking I had to know it all. There is no way that I’m going to know at all.

That’s probably been my single most important thing was hiring the smarter people in. We have a couple more here as well. Ashley, my marketing girl, she also is like a second hand to me. She’s smart and fast when she helps me with a lot of my stuff that we put out there. She has been another huge benefit to me as well. There are things that I want to do but sometimes Jon’s like, “Let’s look at it this way.” I’m like, “You are right. I never would have even thought about that.” It’s bringing a different perspective that I can’t even think about. We make a good team together. That is how you grow your business. You let the smarter people continue to do the things you can’t do and I’m okay with that.

What’s on the horizon for Knichel?

We have a lot on the horizon here. I’m constantly looking at upgrading technology and what new technology is out there to scale the business, to continue to grow the business. I love giving people jobs but sometimes there are things that can be done technology-wise that make the job a lot faster. That is something that we are continuously looking into. We are looking into building out and growing our agent program, which we have done some things already but we are going to be doing full force. We are changing and growing out our truck brokerage. That needs to grow at a faster rate.

We hired a senior director of operations that started in September 2020. He’s a big part of that, working with our team, trying to put everything together, what we need to do and continue to piece things together. I have a plan to eventually hit $250 million in the next 3-5 years. I’m positive that we can do that. Even if we throw in possibly acquiring some other businesses at some point for the strategic ones I talked about, whether it was freight forwarding, international, airfreight, and those types of things. I wouldn’t want to recreate that wheel but that was another option that’s in our plan that we were discussing. We have big plans to continue to grow. We are doing a lot of stuff and keeping busy. I’m excited about it.

A couple of things that come to mind here is this idea of where you are growing. You have been listening to your customer. You know what they want. That is what drives the acquisition and the growth of the different brokers and partners that you were bringing to the mix. If you were to summarize it, what would you say is the most important thing in this whole element of really knowing your customer has been for your company?

Listening to them. What are your pain points? What can we do to help them grow? We talked to a customer while trying to get on as a customer and finding out that maybe they don’t know a whole lot about the transportation side of things. Taking that and educating them, listening and giving them options are the best things. I tell my people, “Let them talk. Fill in when you can but you have got to hear what they have to say.” We do take that back and we continue to grow. There are a lot of companies out there that are happy where they are at. I could say I’m happy where I’m at but I want to continue to do more and keep going after whatever we can.

The single most important thing for business growth is hiring the smarter people. Click To Tweet

One of the things we like to do on this show is to give our guests an opportunity to share about a nonprofit organization, an organization that you might be volunteering with or that is a partner to your organization. Is there anybody you want to give a shout-out to with regard to that?

A big one that I have supported for a long time is called the Hines Ward Positive Athlete in Pittsburgh. It is supporting kids in high school and the lower grade school positivity in sports no matter if you are the best or not the best. Keeping that positivity there and we give away a Title IX scholarship every year, which I also give to my high school as well which is the inclusion of women in sports and being fair and equal. That is a big one for us.

Another is Dress For Success in Pittsburgh. It’s helping women for business. Another one is Strong Women Strong Girls and that is women out there trying to mentor young girls and being involved in that. I do a lot of mentoring with a lot of women in different ways. Always giving back my knowledge and trying to help because I felt like I didn’t get a whole lot other than learning from my dad and some other people along the way. I want to give back as much as I can.

Being in the role you are in and leading this growing company, it takes a lot of time and effort to do that well. To take that time out and carve it out to mentor these young women, hats off to you for that. That is an example that we can all learn from.

Thank you.

What she told us there at the end about listening to the customers is what is sitting with me. I can’t wait to do our wrap-up with this and talk about some of the takeaways I’ve got.

Thank you for your time, Kristy. This has been a great conversation. I know our audience is going to get a lot of great nuggets of information to take from this. Best of luck moving forward as we come into brighter days for the country.

Thank you so much. I appreciate it.

Betsy, I love this interview with Kristy. The thing that stands out is she was going to the end of the interview and she talked about the key thing is listening to the customer. She had this particular phrase, “How can we help them grow?” If there was anything that we have heard consistently from CEOs, the successful companies out there, especially in the last year or so, are the companies that have been listening to their customers and asking that question, “How can we help you grow?” They are focused on the other company even if it’s not specifically in an area that they are experts in but they know if they help the company grow, they are going to grow.

She’s such an example of a CEO who is engaged not just at the high level but when push comes to shove, rolling her sleeves up, making phone calls at the level that she needs to be at the time and supporting her team, educating her team on how to be out in front of the clients. From a leadership standpoint, it speaks volumes about the way Kristy runs her company and how much of the way she shows up every day is a direct result of the success that they are achieving.

She’s got her finger on the pulse of both the customer and the employees. In this pandemic, she has been on the floor with her customers and employees. She recognized that they needed some extra training so they brought in this consultant to train them on certain customer service skills and getting on the phone. For me, when you see a company in a recession, in a pandemic like this, willing to invest in training, that is a good sign. Those are the companies, statistics show, that are going to grow after the recession or the situation is over and the crisis ends. They have leapfrogged their abilities in the past. Their competitors who didn’t invest in the same types of things are not going to keep up.

The one comment she made about, “We are content where we are but we want to keep going.” It’s not about, “We are doing okay. Let’s keep doing what we are doing.” It’s, “We are doing but what else can we do and how can we be better for our customers? How can we grow this company?” Looking at strategic partnerships to be able to do that so they are not recreating the wheel. She is a phenomenal leader. I do follow her on LinkedIn. They have won an extraordinary amount of awards recently. It’s exciting. It’s a company that our readers are going to want to follow.

It may not be the industry you are in but it’s a place to look and to pay attention to because you can learn so much from Kristy.

Thank you, everyone, for reading. We look forward to seeing you next time.

Important Links: