Chief Executive Officer (CEO), Kramp Groep B.V.
Eddie Perdok, CEO KRAMP | SparkOptimus CEO stories
Eddie Perdok, CEO of Kramp, took sales from 0 to 95% online, tripling turnover in ten years to become Europe’s largest supplier of agricultural parts. He talks to Alexandra Jankovich about how he’s now building for the future, heading off disruption from Amazon, and why to be a leader in digital, you need to think people first, digital second.
Contents:
00:54 Kramp's journey from a traditional family business to 95% of sales online - learning from pure players
04:10 Digital transformation: how Kramp took along clients and employees
05:51 Organizing activities centrally or locally? How Kramp...
About Eddie Perdok
Eddie Perdok, CEO of Kramp, has discussed the company's digital transformation, noting that since becoming CEO in 2009, turnover has approximately tripled, with 95% of the current €950 million in business conducted online. He stated that the company began its digitalization efforts after the first internet bubble around 2000, and that a significant part of its success in the last decade is due to its online proposition. Perdok said that Kramp invested nearly €15 million in IT in 2019 and added digital expertise to its executive board, management team, and supervisory board. Perdok described Kramp's approach as thinking in decades rather than quarters, emphasizing long-term position and development over short-term success. He stated that the company has built a marketplace where farmers can order everything they need, including products beyond Kramp's own parts, such as feed, seeds, and machinery. Perdok attributed the company's inclusive mindset to a founding philosophy of cooperation, and he expressed the belief that "people first, digital second" is essential, with good people being the most important factor.
Transcript (45 segments)
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Eddie Perdok0:00
That resolution is coming, it will also affect us, and we need to invest more in digitalization. Really, it's going to make the difference. Yes, then you also have to start at the highest level.
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Alexandra0:17
Introduces Eddie's background: he took over the family business in 2000, merged with Kramp, became CEO in 2009. Kramp is the largest supplier of agricultural parts in Europe, and revenue has tripled under his leadership.
Thank you, welcome, it's nice to meet you.
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Eddie Perdok0:47
The pleasure is mutual, Alexandra.
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Alexandra0:51
Great, you are a traditional family business almost 70 years old, and you started early with digital transition. Can you tell us about when you started?
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Eddie Perdok1:05
We started digitalization after the first internet bubble, around 2008. It was a technology that could help us, though we didn't expect it to take off so much. Today, 95% of our 950 million revenue comes from online business, which has been key to our growth.
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Alexandra1:40
So you've really become an online company. The first years were about experimenting until you built your first webshop in 2005.
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Eddie Perdok1:50
Yes, and about three or four years ago, we realized the technology was outdated and needed to change. We looked at players like Amazon and others to see what makes them different in digitalization and e-commerce.
We wanted to make a difference in the agricultural industry with e-commerce and digitalization. So we opened a startup in Utrecht three years ago with two employees, now grown to about 50 people including data scientists, front-end and back-end developers.
They developed a completely new e-commerce solution, introduced this year. We phased out old technology and put new tech online. It was a risky transition since 95% of revenue is online, meaning 3-4 million daily revenue at stake. If it failed, we'd have a serious problem, but it went smoothly, and we're very happy with the new technological foundation.
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Alexandra3:58
Fantastic, over 20 years from experimenting to own technology. But when you started, you had to convince customers to buy digitally instead of the old way. Business customers often want personal contact; how did you convince them?
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Eddie Perdok4:35
I remember 20 years ago, we had townhall sessions with customers in the evenings. We set up computers and explained how the webshop worked. Over time, we developed this approach, and it worked perfectly.
Also, the role of account managers changed. They used to take orders in notebooks, but now they focus on helping customers optimize their business and supply chain, as the ordering process is automated.
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Alexandra5:53
How did you adapt your way of working? You're in various European countries; what do you organize locally vs centrally?
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Eddie Perdok6:04
Good question, it's a challenge to balance. We're in 25 countries, and at headquarters, we develop some things centrally, like digitalization and the webshop technology. But we also want local responsiveness. We find a balance by giving local teams space while realizing scale advantages centrally.
For example, we don't develop the webshop separately in each country; we have one technology used everywhere. Product data is managed centrally, but quality and translation are handled locally by content specialists.
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Alexandra7:18
Besides helping your own people, did you hire new talent? How do you attract talent?
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Eddie Perdok7:25
When we started the new technology, we couldn't find such people in Achterhoek, so we opened in Utrecht to attract talent. But I think the main attraction is that we are serious and ambitious about digital.
Yes, doing such things in Utrecht shows we're serious. We also invest a lot of money, which signals importance. Personally, I visit regularly. And when you make it important and get good people, it scales quickly, and more people are interested.
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Alexandra9:01
Great, I often hear industrial sectors question if they're attractive enough for such talent, but you prove it's possible. Did you hire a Chief Digital Officer?
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Eddie Perdok9:20
Yes, about a year ago. We realized disruption was coming and needed to invest more in digitalization to make a difference. So we started at the highest level, adding a CDO to the board three years ago, and it's been a good step. We also added digital expertise to the supervisory board.
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Alexandra10:00
You've invested heavily in digital transformation, about 15 million in 2019. Often, costs come before benefits in digital transformations, which holds companies back. How did you handle that over 20 years?
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Eddie Perdok10:26
Indeed, costs come before benefits, and sometimes benefits are less than hoped. But it's in Kramp's mindset as a family business. We think in decades, not quarters, so long-term position is more important than short-term success.
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Alexandra11:10
What role has your company played in supporting this?
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Eddie Perdok11:15
Your company helped by focusing on the digital agenda, making us look outward more and understand disruption. This led us to invest in digital competencies at all levels and in Utrecht. Understanding Kramp's business and culture allows for better advice.
To stay relevant in the value chain and prevent disruption from companies like Amazon, we need more contact with farmers. So we developed a platform business model, including all stakeholders in the agricultural ecosystem, to offer a good proposition. We built a marketplace where farmers can order everything they need, not just Kramp parts.
This platform is called Mekers, launched in Denmark this year. It's a new way for Kramp to future-proof our position in the value chain.
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Alexandra13:34
You launched in Denmark with multiple partners, like John Deere. Are they participating?
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Eddie Perdok13:50
Large players like John Deere might wait or do it themselves, but we see that small and medium-sized parties lack volume and scale for such investments. So we believe we can gain traction with them by creating an inclusive business model.
Everyone in the ecosystem sees potential disruption from Amazon, so we need to innovate together. This model helps everyone, including the farmer, who gets more value.
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Alexandra14:48
Everyone keeps developing. What developments for the 'farmer of the future'?
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Eddie Perdok14:56
Precision farming is important for farmers using data for sustainable agriculture. With data from our platform, we can help farmers, so we aim to contribute constructively.
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Alexandra15:16
What service level is desired? For example, if a tractor part breaks during harvest, it needs quick replacement.
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Eddie Perdok15:32
If a farmer sees a broken part, he can scan it with our Pony Grey connection app and order. Delivery is within 12 to 24 hours from our 10 distribution centers in Europe. In the future, with Mekers, we can make dealer inventories available, potentially delivering within 15 minutes if the part is at a nearby dealer.
Transparency in the value chain helps locate parts quickly, making business simpler and more efficient for farmers.
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Alexandra17:13
What's your organizational challenge for the next five years?
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Eddie Perdok17:18
The challenge is that we've invested in technology and functionality, but many people in the organization still think traditionally. We need to further develop digital thinking in traditional roles over the next years.
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Alexandra17:45
If I'm in another industry, a family business with business customers, and I want to start or scale digital transformation, what advice do you have?
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Eddie Perdok18:05
The most important is to start with good people: people for digital. Be willing to invest a lot before seeing benefits. If you can't invest alone, seek partnerships to share costs. Also, like us, look at customer needs and see which parties to bring together to meet them.
A key reason for choosing a platform business model instead of a simple webshop is relevance. Kramp's relevance to a farmer is only 2-3%, so we need to offer everything he needs to be truly relevant. That's why we chose a platform model.
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Alexandra19:11
I see customers often only sell their own products, but offering competitive or other products is new. Did you have to get used to this mindset?
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Eddie Perdok19:27
It's in Kramp's DNA to cooperate; my father always said collaboration is better than competition. This mindset helps think more inclusively.
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Alexandra19:54
Very important. Thank you, Eddie, for sharing your lessons; others can learn from this.
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Eddie Perdok20:06
I'm happy to share, and I hope to see you again soon, perhaps in person.
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Alexandra20:16
Thank you all.