Missing out by misunderstanding customer needs
December 17, 2020
December 17, 2020
The chemical industry’s diverse customer base insulates it from volatility in one customer industry or another, helping to stabilize revenues and increase resilience during downturns and times of crisis.
But when it comes to customer centricity, that broad customer base can have a significant downside. For many chemical companies, there is a tendency to look for increased efficiencies by offering fairly similar products and services to customers across industries. And that can mean that they are sometimes failing to meet the specific needs of specific industries and customers.
Indeed, Accenture’s Global Buyer Values Study shows that chemical companies do not always have a clear understanding of what their customer industries value and want from them. They often over- or underestimate the importance of certain product and/or service attributes, compared to what buyers actually think is important. And, the research shows that the preferences and needs of customers often differed from established beliefs about what they value. (Figure 1) These gaps point to unmet needs—and to opportunities for chemical companies to adjust their offerings to provide the things that matter most to their customers.
Figure 1: Select perception gaps between sellers and buyers (cross-industry average)
The research also found that these unmet needs vary widely by industry. For example, product and packaging customization showed the largest gap between buyer and seller perceptions in the study on average. And yet, only two industries cited it as a top underestimated need. These included transportation and machinery manufacturing, both of which have complex supply chains, just-in-time production processes and numerous input materials. In spite of those similarities, however, those two industries had different responses for the next-most important unmet needs. A similar picture emerges when considering the areas where chemical companies overestimate the importance of various attributes to their customers. (Figure 2)
Figure 2: Top 3 perception gaps between sellers and buyers for select industries
Unmet needs across buyer industries offer a fragmented picture, underscoring the importance of industry-specific customer centricity.
Chemical companies need to improve their ability to understand and meet customers’ needs particularly those that are currently going unmet. For those that do, the opportunity is great. As revealed in Part 1 of this research series, customers are ready to buy more and pay more if their needs are met.
As chemical companies look for ways to tap into this opportunity, technology will play a vital role—a fact that many sellers in the survey recognized:
66%
said that using new technologies more extensively to get customer centricity right could help them boost profits by more than 10 percent.
35%
thought new technologies could help them increase profits by more than 20 percent.
To use technology to better meet customer needs, chemical companies should:
By taking these steps, chemical companies can get a better grasp of where they may be falling short in the eyes of their customers. They may also gain a more realistic view of the effectiveness of their technology strategy. The survey results indicate that 70 percent of chemical companies consider themselves to be first or early adopters when it comes to adopting new technologies to better understand customers—yet their data struggles suggest challenges remain.
Regardless, for chemical companies that ultimately mind what matters to their customers, today’s unmet needs can turn into tomorrow’s opportunity to build loyalty, increase revenue and drive growth.
The Accenture 2020 Global Buyer Values Study for Chemicals assessed and compared the perspectives of chemical companies (sellers), their customers (buyers), retailers and end consumers. The study identified areas where seller and buyer perspectives are aligned and where they differ, and where sellers have an opportunity to do a better job of meeting buyers’ needs.
This report covers only a portion of the study’s extensive findings, which can be used to provide an in-depth understanding of a range of factors affecting customer centricity—for specific companies, as well as the industry as a whole. The next report in this series looks at what the research means for portfolio management at chemical companies.
Thank you to Accenture’s David Apel, Bruno Djapanovic, Michelle Ganchinho and Karin Walczyk for their help in executing the study and writing this report.