Richard Kettle – Animal Health Direct – CEO Business Marketing Interview 27

Richard talks about why being privately kiwi owned gives Animal Health Direct an edge in product innovation and speed to market against the multi-nationals, why service focused via reps and online makes the difference, and the importance of persistence in business.

Richard also shares why he’s convinced YouTube videos are the way to go for capturing attention and measuring marketing performance, how influencer endorsements in the equine marketplace helps sales and how technology has eventually convinced him of it’s benefits through automated order processing and tracking, plus Richard shares why he gives back to the community with the Polo School programme.

Animal Health Direct

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Ryan: This is the Ryan Marketing Show and you’re listening to episode 27 of 100. Today, I’m joined by Richard Kettle from Animal Health Direct, great to have you on the show Richard.

Richard: Thank you, pleasure to be here. 

Ryan: Now you’ve got quite an exciting business, you’re an animal health retailer, you cover the whole spectrum. You’ve got health products, you look after farm animals, sheep, beef, dairy, deer, equine horses as well some on the pet side. As a business owner, how do you decided where to focus seeing it’s such a broad category? 

Richard: Yeah I think, I mean the dairy is an obvious one being the importance it plays in the whole cultural scene, and we’ve expanded our product range into that market segment sort of year by year to try and be a bit of a one stop shop when it comes to carving time. We’re not up in the, what they term the restricted drug side of it, we’re more every day use type products for dairy so they’re accessible through vets and the over the counter channels, you know your rights and farmlands etcetera. Following from that we’ve always had a strong interest in equine and the company AHD’s probably well known for it’s equine presence.

Ryan: And what does AHD stand for?

Richard: Animal Health Direct Limited, and we introduced a range of equine products about two years after I started which was about 2003, 2001 we started. So we’re quite well known in that area although it’s only about twenty percent of our turn over, but we seem to be well known for equine but it’s certainly a category that we’re doing more in and wanting to grow our presence and products. Following on from that we’re venturing into sheep and beef market, again it’s an area, fly control we’ve had some activity to in with sheep, but we’ve got some new products at the moment just going through registration and that will put us more into that market. So that will expand us we hope, I’m sure it will, giving us a good coverage across all those sort of market segments.

[00:02:41] 

Ryan: And how do you decide what type of products you should be stocking for farmers? Do they give feedback to you, or, you’ve got your skin in the game and you actually know what is coming up? How does that all plan out?

Richard: Yeah, it’s a bit of both, sometimes it could be a comment a farming mate makes at duck shooting and you think oh think I’ll lock that one away, that’s a good idea. Often though, being a small privately owned company we can be pretty reactive and if you hear a conversation about a product and it’s faults, we always think, well that can be easily fixed, we just sit down with the correct manufacturing chemist and go through this and see if we can’t fix it. Nine times out of ten you can.

Ryan: Right, so you actually help then for giving insight back to the manufacturer to evolve the product.

Richard: Yeah, and it could be something simple as a product doesn’t flow as well as it should or it tastes bloody horrible and if it’s a stressed cow and you’re trying to get it down it’s throat wouldn’t it be better if it taste nice. Simple things like that, you know for the product flowing, it’s quite essential in the South Island when it gets really cold, they like to be able to pick a product up and know that they can tip it out of the container. So just things like that, some additives and as I said we do rely on manufacturing chemists then to help out to finish it off. Some of the ideas we may have that we think are simple but just aren’t that practical. Or you go down a whole different road which could require a lot of trial work and registration processes long term, and we’re probably not that focused on that at the moment, we’re just quickly bringing products to the market where we see they have a fit.

[00:04:28] 

Ryan: So that’s on the product side, how do you then balance that with the service side of the business?

Richard: Okay, service is something again being small it’s something that we try and out do our competitors with is be service focused, we have sales reps on the ground North and South Island and they have a regular core cycle with the customers. We’ve incorporated some technology so that when they place an order and that order is processed through our system they get automatically get emailed the order conformation and the tracking number for the product so it’s just things like that, that takes a bit of pressure off our end because we’re small but it gives them the information that they’d actually need and we’ve found that it’s worked really well, customers love it that they’re not ringing up saying, my order hasn’t turned up, they can go and do it themselves. So the technology, we embrace that and anything that we think that’s going to, I guess initially I was pretty stand off-ish with it and not in a hurry to spend money in that area but when you understand just what it can do for your business, and as you grow you take it on board and benefits happen pretty quick.

Ryan: And have those benefits been seen around your customers being able to purchase online and have that, almost that sales part automated so your sales rep, so that they’re more effective in the field?

Richard: Yeah, definitely and an area that we want to expand in is a follow up service, so almost like a call centre cause’s it’s very easy to set up. It’s not a huge expense in comparison to maybe a full time sales person on the road that you have to generate ex amount of dollars to justify their presence. So again it’s an area that we feel that where we sit on the market against the multi nationals it’s just an area that we can be a wee bit different in. I think that there are some trends out there towards direct purchasing with companies and I think you’ll see some changes in the ag-chem side of things first. For us we do it the traditional method which is through the veterinary wholesalers to the vets, and then to the farmlands and the Wrightsons and Ashburton training societies so those type of people. We still distribute to them.

Ryan: Yeah I think you’re right, I think in any business there’s a tendency to move direct if there’s no value in between, if there is value in between then there’s less of a compelling reason because it’s not chosen on price alone.

Richard: Yeah, and a good example of that is we do have an equine online shop, and the reason we did that was it was simple part of the marketing mix and it’s put our products in front of that teenage audience that buy our products, and they may not necessarily purchase online but they’re seeing them the whole time, and they can at least research them and funnily enough, I informed all of our distributors that this is what we’re doing. One of them complained. We don’t undercut them on our online shop, normally we’re dearer, but it’s a stress to them it’s part of the marketing mix but all of our business with our equine distributors has gown since we had an online presence.

Ryan: It’s just that general awareness, or bias towards your product because they’re known.

Richard: We don’t push it, but the options there, if something went wrong with a distribution base or it things got really tough in that market we can put a whole lot of focus onto the online shop and go that way but it’s not an intention but the tool is there to do it.

Ryan: So you’re really dabbling with the online side, with the direct marketing but not at the expense of any of your retailers to or existing channels.

Richard: Exactly, and it’s only equine products, and simply as I said because that audience is online, they’re there. not saying that dairy farmers, they’re very much online, and there’s lots of data to prove that but the traditional distribution channels we’ll stick with that type of marketing.

[00:08:47] 

Ryan: What are the big regions around New Zealand that are equine focused?

Richard: I guess once you get to Cambridge north, a lot of equine but then the South Island, Christchurch is huge too, and then there’s pockets but Hawke’s Bay’s very strong in equine. Probably more so then a lot of people think, but the numbers are definitely – we’re breaking more into the race horse market with a new product and that’s opened up a whole lot more horses we wouldn’t have normal got to. But yeah, it’s pretty well spread.

Ryan: Now you currently do a lot of the animal education side I see from both your website with your online content marketing there, you run an email newsletter for vet news and there’s in person seminars you do on all sorts of topics across the whole animal health range. What do you find works best or what do customers respond to most?

Richard: I think the videos, they’re well received. I was a bit hesitant about doing a video for the company and I think the first one was three or four years ago, and the response was really good and we’ve done another one since, so got a lot more confident in that area and they do work. I must admit since doing them myself I find that if I want to find out something, I’m looking for a video on the product or someone to talk about it. If you want to find out more.

Ryan: So what’s the video, the content that goes into those videos?

Richard: We put an effort into about the company, who we are, sort of where we come from, where we want to go and then linking the products to that. So brands that they may recognise, and then linking that back to us so you can have a product and you can brand it and push that brand or you can brand your company and try and push that and we’re in the stage of really wanting to push our company name to get out there more rather than, perhaps some of the multi nationals may put a lot of effort in behind a certain brand and market that.

Ryan: Right so you’re really going for the umbrella approach to say that if anything comes from AHD or vet services, that it’s been curated, it’s a trusted product that because you’ve selected, it’s been through your process.

Richard: Yeah, definitely. 

Ryan: Okay, interesting and what type, or give me an example of one video that’s kind of gone big, a lot of people watch it.

Richard: Probably the biggest one would be the equine, and I guess that stands for reason cause’ it goes back to what I was saying before, they’re alway sort of, they’re in that media. It’s where they’re at. 

Ryan: And you’re posting those up on Youtube, or Facebook?

Richard: Yeap, we’ve put some stuff up on Youtube, we’ve tried that. We had a go at, we wanted to capture the attention of the dairy farmers. Their partners do a lot of the calf rearing so we put videos up on Youtube and it’s successful, and it’s measurable. It’s another thing about it, the traditional media of advertising, it’s expensive and you don’t really know what you’re going to get. The response it’s not measurable, with this online stuff.

Ryan: You get to see the views straight away. It’s very transparent.

Richard: And see what they like and don’t like. 

Ryan: Is there a regular process where you are putting one up on a regular schedule or is it more around when there’s a new product or a new problem that you want to do a how-to?

Richard: No, again in the equine segment we are pretty active every fortnight now, we’re putting something up.

Ryan: That’s great.

Richard: Yeap, just to keep it going and we’re noticing our likes are growing and the favourable comments on Facebook is growing, and if you can get some people that are recognised of having some sort of influence in the market, saying something about your product out of the blue, it’s surprising how sales pick up.

Ryan: Interesting so they’re not only looking at your brand for confidence they’re looking at the influencers to talk about your brand or the products your recommending.

Richard: Definitely and equine’s very fashionable, product ranges come and go, it’s just a case of staying there and yeah riding the wave really. You come back into fashion again, and away you go.

[00:13:09] 

Ryan: So on that, how important is customer testimonials for you?

Richard: It is important and it’s an area that we probably can do more in, we have got some and they’re good but it’s certainly an area that we can do more in, and I guess a lot of that comes with confidence too. You get to a stage in your growth of the company that you really start to believe that yep, it is all happening, it’s falling into place, cause it’s not easy and sometimes you think, we’re better just to stay under the radar. We’re going okay but then you got to step out. We are at that stage, probably have been for two of three years, so we are using people more to help us promote the products, and when I say using them, it’s not a problem. There’s people that are very keen to.

Ryan: I’d imagine so.

Richard: And we get them out of the blue, you’ll get an email out of the blue saying how wonderful your product is and what it’s done for them and their animals or whatever, and they often say, please use this in your marketing.

Ryan: I guess that’s the benefit of the business you’re in is that the products that, your products are helping animals, and animals just go off on the internet. Beautiful horses or it doesn’t matter that they get shared a lot, particularly on Facebook, so that type of marketing kind of is, as long as you are giving them products, can actually work quite well for you.

Richard: Definitely.

Ryan: For example, I’m not sure if this is correct or not, I got this off your Facebook, is that, you helped treat an injured alligator recently in Napier Aquarium is that, was that you guys or?

Richard: I’m not too sure whether that was, no that may have been more vet related then to us.

Ryan: What’s one of the most unusual animals that you’ve had to treat or look after?

Richard: I guess probably, this is not unusual but products going into llamas, in fact we’ve even got a guy in the states who buys one of our equine shampoos online, cause’ he believes it’s the best products for his llamas.

Ryan: Oh wow.

Richard: And his llamas are always winning the big shows in the States.

Ryan: So you ship internationally as well as exporting or that’s an exception?

Richard: We do export, we have a new bedding material for horse stables and calfing pens, and we’ve been exporting that up into Singapore and we’re about to go into some more companies in Asia where it’s quite an issue, bedding. And Australia, and we send our equine products to Australia, Great Britain, Noumea, and a few other sort of places but we haven’t got a serious sort of distribution for the equine set up off shore. So most of it is online.

[00:15:57] 

Ryan: And where do you see the growth for AHD and vet services in the next twelve, twenty-four months?

Richard: For us, we’ll have some growth in the sheep and beef market, we’re finding we’re having a, despite the down term, we’re having a very good year in the dairy market and I think a lot of that is to do with the choice that the farmers are looking and we’ve always been competitive. Our products are unknown but quite often they’ll stick with what they’ve always done, but we’re finding this year they’re looking bit more outside of what they’ve normally done and looking at price so, we can go to a farmers calving evening for example and it’s the first time I’ve actually seen them come in with a list and pricing comparisons, and they’re looking.

Ryan: Is that right so they’re almost, their educated before they get there? 

Richard: Yeap.

Ryan: Does that change the type of question they’re asking of you?

Richard: Not really, they’re pretty well made up their mind, if the advertised price they’ve seen it at is correct, they’ll buy, but then you’re dealing with a funny piece cause’ they will drive twenty-five minutes down the road to save five cents too so.

Ryan: So also on that, the commercial side, I guess this is a wider question for Hawke’s Bay where your situated now, there’s a big project that may or may not go ahead with the Ruataniwha dam, from a purely commercial stand point, what would that mean for a business like yours, if it goes ahead?

Richard: Look I think for the Hawke’s Bay region, for us it would certainly grow our business, there would be more live stock and not necessarily all dairy either, I think people have got their head around that now. It could be, there will be support crops for feeding, stock and I think the traditional fattening that Hawke’s Bay used to be good at when it rained, there will be a lot of that, I think it’s a fantastic option for the region, and really it’s a no brainer. It’s got to go ahead.

Ryan: And is that what you’re hearing from some of your customers as well, from the farms? 

Richard: Yeah, from my farming mates and customers, definitely, and I guess we’re all pretty simple people, when you look up at the ranges and see it raining you just ask yourself why aren’t we capturing that? Why is it going out to sea? And following on from that you can only have healthier rivers if you can put a constant flow through there, to what we’ve been seeing over the last ten, fifteen, twenty years. 

Ryan: So I guess on that, on the, you know you’ve been around for what now, fifteen..?

Richard: Fifteen years.

Ryan: Fifteen years, knowing what you know now about the business you’re in, what advice would you give to someone wanting to get started in the practice now?

Richard: If you want to get into the animal health practice industry, persistence. There’s a lot of competition and there’s a lot of tradition too, in the market. You’ve got to have a point of difference, whether it be your product or your service, or just how you want to go about the business but, yeah I’m a great believer in the six P’s and persistence. 

Ryan: Persistence important right, but you’ve got to have motivation but discipline’s got to follow that.

Richard: There’s a lot of knocks, you’re going to get a lot of knocks and you just don’t take them personally. If you’ve got some sort of problem with it, whatever that person said you wait until you get in your car and then you let them know then. You just got to keep going back. 

Ryan: Now one last question before we finish up, your very much a proud supporter of the next generation, and with sponsorship funds for local young people, what are some of the most rewarding projects you’ve funded to date?

Richard: I guess seeing, we’re funding and helping a young up and coming show jumper, Brayden Aarts, he’s got some good skills. Really good ability, and the right sort of drive for a young kid that often you don’t see, and it’s very rewarding to see him succeed and we hope that we can be part of his journey if he goes right to the top, it’ll be fantastic to be starting with him and seeing him go all the way. Maybe perhaps being an olympian or whatever one day, show jumping and have that association. We’re involved also in a local project with Flaxmere Youths and that’s really rewarding, it’s great to be able to do something in the community.

Ryan: What’s the project your involved with there?

Richard: That’s involved with running a polo school program with, Flaxmere College is now involved in it, and it’s great, these are the things that these kids will never have access to before and it’s great opportunity for them and it’s really rewarding just the challenges it offers them and the changes you see in them.

Ryan: Well that’s some fantastic information, it sounds like you’re running a very successful business which, is at a junction now you want to put your head above the parapet and really grow publicly as well as the work you’ve done today privately, is there anything else you want to share that you’re quite proud of that’s happened so far?

Richard: Well I mean I guess like what everyone says, it’s when you are it’s great to be Kiwi owned, and there’s a lot of changes going on in the industry with multi nationals merging or take overs or disappearing, and that again creates opportunities and we probably haven’t played that song hard enough about being Kiwi owned but it does have some power, and people do recognise it and yeah a lot of the farmers will say, we like that and it helps make that decision for them. 

Ryan: Fantastic, well thank you very much for your time today, Richard, and best of luck in the future.

Richard: Cheers, thank you.