Martin Hilti’s people spent much of their time at construction job sites, observing and interacting with customers. This helped Hilti ground his design choices, and it gave him a chance to rapidly prototype a new tool with customers to learn about the tool’s advantages and limitations. Over the following decades, the business grew one tool at a time. First the company would develop or obtain the basic design. Then it would focus intently on the detailed innovations that made the tool ideal for specific customer applications. Over time, this repeatable formula led the company into a range of tools and systems for fastening, drilling, coring, anchoring, cutting, and hanging in heavy construction applications.
The company also developed direct-to-customer sales and distribution, adding local sales and service branches, and it was the first in the industry to introduce telephone sales and service. Today, in an industry where about 75% of products are sold through indirect channels, this direct customer contact remains a differentiated strength. It is one of the reasons that Hilti is able to continue creating innovations in its tools and thereby capture significant price premiums over competitors. Says Hilti chairman (and former CEO) Pius Baschera:
We have one distinct advantage over most competitors—direct distribution. Let’s complete a very simple calculation: if each one of our 12,000 field employees visits 10 to 15 customers a day, between them they make well over 150,000 customer contacts. That’s every day. This is why we know exactly what our customers want. Our research and development doesn’t “invent” products in a vacuum, in the hope that these appeal to the market. As a rule, they translate the customer’s actual wishes—a hard enough task in itself. Incidentally, this applies not only to products, but also to services, in particular.
Imagine the compounding over five years of even relatively small improvements in tools. Not only are the tools better, but the company producing them learns more, and learns faster, than competitors. That is the history of Hilti’s repeatable success.