In previous blog posts, we explored how chemical companies need to create a “Living Business”—one that can stay in step with customers and remain perpetually relevant to them. We also examined a number of Living Business key tenets that relate to the transformation of sales and marketing in the chemical industry. In this blog, the third in a series, we take a look at another of those tenets—orchestrate iconic customer experiences.
Delivering a superior customer experience has long been essential to success in several industries—and increasingly, for B2B companies. Indeed, 90 percent of B2B executives cite customer experience as a very important factor to achieving their organizations’ strategic priorities, according to Accenture research.1 But customer expectations are constantly rising, and today many companies are looking for ways to move to the next level and provide an iconic customer experience. The precise definition of an iconic experience varies by company. But in general, these experiences are personalized, anticipated, valuable to the customer and reflect a spirit of partnership with the customer.
For the most part, the iconic customer experience has not been a priority for the chemical industry, which has focused instead on improving products and assets. As a result, customer interactions are often paper-based, complex and time-consuming, creating an experience that hasn’t changed much over the last two decades. But chemical company customers are changing—and increasingly, they expect a good, and even iconic, experience. To help meet that expectation, chemical companies can focus on two areas: using digital technology to make it easy for customers to do business with them from a sales and marketing perspective, and re-thinking the traditional channels used to reach customers.
Making things easy for the customer
Today, B2B customers want transactions that involve less “friction.” That is, they want to work with companies that are easy to do business with, and offer lower-cost, faster transactions. This is not necessarily a new concept, but digital technology is making it easier to put the idea into practice and expand it into new areas.
For chemical companies, making things easy for customers will be more and more important in the coming years. For example, US chemical companies are investing some US$185 billion in new and planned capacity.2 That means more supply and more competition, along with a projected increase in exports to Asia. As such, chemical companies will need to have the kind of digitally driven sales and marketing capabilities that enable streamlined interactions and iconic experiences—which will be especially critical in Asia, where organizations like Alibaba may become an attractive platform for chemical sales.
Chemical companies can start creating iconic experiences by:
- Understanding and communicating with customers. At the start of an interaction, the company should immediately “recognize” the customer and have a 360-degree view of the customer based on external and internal data sources. Companies can use real-time “listening” and create living profiles for each customer, based on the customer’s navigation through an e-commerce site or interactions with the company’s customer service, technical service or sales representatives.
- Providing individualized and hyper-personalized treatment. Online, chemical companies can provide real-time customized pricing and delivery options based on customer characteristics, preferences and segment, matched to the chemical company’s inventory and financial requirements. Overall, companies should provide a “curated experience”—one tailored to each customer and based on real-time order data, product information and preferred service level.
- Combining technology and people. Ideally, 100 percent of routine customer interactions should be supported by automation, analytics and artificial intelligence, making it possible for the customer to have a “no touch” ordering experience. But systems should also offer human interactions, allowing customers to easily access expert know-how and opinions about products, technical service, innovations and so forth at key points in the process.
As chemical companies find ways to be more customer centric, they can apply the practices above and use digital technology to re-think their traditional direct and indirect sales and marketing channels—while monitoring emerging platform-based channels.
The digital direct channel
Digital technology makes it possible to improve the direct channel experience significantly, and reach a broader range of customers. Here, a chemical company should consider implementing its own branded digital channel that matches the company’s product portfolio, with customer needs addressed in a real-time, curated buying process. Selling online enables a better understanding of customer buying behavior, which in turn leads to improved conversion, cross-selling and loyalty. The digital direct channel also lets the direct sales force focus less on handling transactions and more on being relationship stewards, deal makers and brand ambassadors.
Some companies are putting these direct digital channel concepts into action. For example, one large chemical company was using e-commerce platforms for its specialty and commodity products, earning a significant percentage of its revenue in these areas through online/web-based channels. Over time, however, the products across these two buying channels began to overlap, causing customer confusion and pricing issues. The company found that some offerings differed only in the additional services that were included with them, and could be purchased on both websites. In addition, when larger customers and distributors needed to buy products across the broader product portfolio, they needed to use different sites, which created unnecessary complexity and took extra time.
To improve the overall customer experience, the company designed one site for both product lines that provided a guided experience, similar to the approach a B2C company would use. With the implementation of this solution, an even greater percentage of customers are now buying products through the digital channel. While this company has found success with its digital approach, the use of digital channels varies widely in the industry—and many companies have a way to go. However, as the value of the digital direct channel becomes more widely recognized, we expect to see a growing trend toward online sales.
The indirect channel
In some sectors of the chemical industry, manufacturers reach certain types of customers through indirect channels—working through channel partners such as distributors or agents—largely to help reduce cost to serve. But this approach often creates a disconnect between the manufacturer and the customer, which limits the ability to create an iconic customer experience.
With digital technology, chemical companies can pivot from simply managing channel partners to playing a key role in orchestrating an entire ecosystem of partners. They can work with those partners as an extension of their own business and gain more control over the customer experience. To make that shift, they will need to invest in customer data management, analytics and social-listening technologies to create feedback mechanisms and share data across the ecosystem—and enable the ecosystem to work in concert to deliver the right experience. These efforts are likely to pay off: By orchestrating relationships with indirect channel sales teams, one manufacturer boosted sales by almost 5 percent while reducing unproductive administrative effort.
Watch for platform selling
There are now sales and marketing platforms in use across many industries. These typically simplify and streamline the purchasing process and provide attractive economics for buyers and sellers alike. These platforms are not yet prevalent in the chemical industry, but they may be coming soon. For example, Knowde3 is a chemical industry marketing platform that aims to connect chemical producers and customers early in the buying journey. It allows chemical customers to engage with numerous companies in an efficient and easy manner, while those companies can provide customers with information on products and use analytics to better understand customer needs and behaviors. Knowde was launched as a marketing platform, but it has the potential to quickly evolve into an easy-to-use sales platform.
As these types of commercial platforms emerge, chemical companies will need to monitor them, engage in exploratory discussions with them and develop plans for taking advantage of them when the time is right. Otherwise, companies run the risk of being caught by surprise by competitors, including new industry entrants, that are ready to take advantage of this channel.
Many of the steps we’ve described here will require significant change. But the digitally driven iconic experience is already having a significant impact in many industries—and it is soon likely to do the same for the chemical industry.
In the next and final blog in this series, we will look at another tenet of the Living Business: “Strive for competitive agility.”
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1 Angelos, Jason; Phil Davis; Mark Gaylard. “Better 2 Best,” Accenture Strategy, 2017. Accessed March 1, 2018 and viewable at:https://www.accenture.com/us-en/insight-b2b-cx-anthem.
2 “Outlook: U.S. Manufacturing Turns Corner, Rides Upswing of Global Economies; Chemical Industry Growth Rate Surpasses 20-Year Average as Industry Rebounds from Historic Hurricanes,” American Chemistry Council, December 8, 2017. Accessed March 1, 2018 and viewable at: https://www.americanchemistry.com/Media/PressReleasesTranscripts/ACC-news-releases/Outlook-US-Manufacturing-Turns-Corner.html.
3 Knowde website at: https://www.knowde.com/welcome.