How YouTube helped jolt sales for Blaine coatings manufacturer

Scott Haasl grew up on the factory floor, where he learned a lot about solvents but very little about social media.

In recent years, social media has taught the 51-year-old CEO of Plasti Dip International a lot. It's helped create new markets for what had become a somewhat tired product, transforming the company his late father founded in 1972.

Plasti Dip, based in Blaine, makes a rubberized protective coating in a can used by do-it-yourselfers to dip their tool handles to make them easier to hold.

The company had been a modest financial performer, but in 2009-10 it saw sales spike an unprecedented 30 percent. Aerosol cans of Plasti Dip started to outsell the traditional dip cans. Sales jumped another 16 percent in 2011, to $8.3 million.

"The horse was starting to run out from under us," Haasl recalled. "Guys were running into Home Depot and hardware stores and throwing every $7 can they could find in their cart."

Who startled the horse? Customers who were creating new uses for Plasti Dip and touting them in YouTube videos and Facebook posts.

"We saw people just start to paint chrome car wheels and emblems with Plasti Dip," said Dan Ruege, Plasti Dip's marketing vice president. "Another guy painted black stripes on his red Corvette. And he YouTubed it."

"Once this concept got started on the various social platforms, there was no turning back," Ruege said.

The product's evolution from hardware staple to fashion statement was thanks to users like Joe Plesher, a car buff from Florida.

Plesher bought a can of Plasti Dip in 2010 thinking it was spray paint that he could use to paint the wheels of his car black.

"I realized that I could peel it. I played around with that wheel. Then I went on a two-week binge, experimenting and spraying and peeling everything on that car," Plesher recalled. "I called Plasti Dip management to tell them how it could be sprayed on cars and how big this could be. And I wanted to work with them.

"They said, 'If you think this can work, build a business plan for yourself and a website.' I started [www.dipyourcar.com] and we did a couple YouTube videos to show people how to do it themselves. It went viral. And they gave me a distributorship in 2011. It's been a busy three years."

"This is my version of winning the lottery," Plesher said of his distributorship. "We're on pace to do $20 million in business this year. I'm working for myself and supporting my employees and family."

Plasti Dip fans extend beyond car owners to interior decorators. Just this month, a digital magazine called "Apartment Therapy" featured holiday decorating ideas using Plasti Dip, including treating pine cones and dipping wine goblets.

The product line morphed from a half-dozen colors in 2008 to 34 today, including "burple" and "chameleon." The company's Blaine plant has increased production from about 1,500 gallons daily to 8,000 during that time. Employment in Blaine has more than doubled to 40-plus workers over five years. Sales continue to increase, hitting $35.7 million last year.

Growth hasn't been easy; the company that barely survived lean years nearly choked on the unanticipated surge in sales.

"I saw a liquidity crisis coming in May 2012," Chief Financial Officer Bill Malchow recalled. The company didn't have sufficient cash for the increased supplies and equipment needed to meet the explosion in demand.

The sales growth and enhanced cash flow that followed allowed Plasti Dip to emerge debt-free by 2013.

The role that the Blaine workforce played was not lost on management. Wages range from $13 to $25 an hour for most workers, plus benefits, profit-sharing and a 401(k).

Founder Robert Haasl, who died in 1998, shared the wealth in profitable years with the workers through an employee profit-sharing plan. Two years ago, Scott Haasl started the increasingly rare traditional defined-benefit pension plan.

"And we serve free pizza lunches the first Monday of every month," he added.

The company has also retooled its marketing, turning to an outside firm for help.

Kruskopf put together a website called "DipheadsUnite.com" for the handyman, automotive and craft markets that features new uses developed by customers.

"They are a great client," Kruskopf said of Plasti Dip. "Unassuming, fun and willing to take some risks. We didn't do anything fancy."

Meanwhile, competition has heated up. Rust-Oleum, Sherwin-Williams unit Dupli-Color and others have introduced similar products.

Plasti Dip expects sales to grow another 7 percent this year, to $38 million. The more moderate growth means Haasl, a guy who survived lean years as well as the recent boom, now has more time to think and plan.

"We're going from reactive to proactive," Haasl said earlier this month. "We're about to reinvent the categories we invented. We're not just catching up anymore."