Chemical customers are willing and able to switch

Altogether, these findings challenge the traditional view in the industry that price is the overriding cause of customers deciding to switch. In fact, the research shows that customers may not be as price-sensitive as sellers think—and that chemical companies need to address a broader range of buyers’ needs to keep customers.

The research also found that there are large gaps between what sellers think is important to buyers and what those buyers actually value, which makes the risk of customers switching very real. Looking at the plastics and rubber industry, for example, buyers were more likely than sellers to think that having pricing information was important. They also placed a higher level of importance on being able to purchase materials that help them differentiate their own products, carbon neutrality and automation. (Figure 2)

Figure 2: Top value perception gaps for plastics and rubber industry customers

Moving from insight to action

Armed with the knowledge that many buyers are willing and able to switch materials and suppliers, chemical companies can consider the following actions:

Double down on differentiation
Sellers can differentiate product and service offerings to more closely match customer applications and adjust their pricing and service models to incentivize loyalty and long-term relationships. They can also:

• Develop a better understanding of customer preferences and provide differentiated products and services that really matter to customers—making it harder for them to leave.
• Invest in identifying those customers that are most likely to leave, making a concentrated effort to meet their needs while simply continuing current practices with those that are not deemed to be at risk.

Protect the base
Sellers can strengthen their efforts to reach the customer’s customer to create more pull and lock-in for their products. They can also:

• Take a data-driven, fact-based approach to truly understand what customers value, and then tailor their offerings and interactions accordingly.
• Consider investing in competitive intelligence about supply/demand, pricing and potential competing materials.
• Monitor the customer’s production processes and technologies to see where increased competition from other materials is likely to emerge.

Play offense, as well as defense
Sellers can connect with buyers that are potentially “on the move” in the market by identifying the main underserved needs in their customer industries and make meeting those needs the center of customer-acquisition campaigns. They can also:

• Keep a sharp eye out for competitors’ customers that may be open to changing suppliers by using analytics to identify behaviors that signal an intent to switch.
• Establish mechanisms across sales and customer service that make it possible to quickly act on opportunities to win over new buyers.

Virtually all (99 percent) chemical sellers in the survey believe that customer centricity is important, and many think they are doing a good job—with 61 percent giving themselves a ranking of 8 on a 10-point scale. But that confidence may be misplaced, as the research shows a number of significant gaps in sellers’ understanding of buyers’ needs. Those blind spots are likely to mean that customer needs are not being fully met. And in an industry where customers are quite willing and able to switch suppliers and materials, companies will need to move fast to remedy that situation and build even higher levels of customer centricity.

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 how disconnects in seller and buyer perceptions can create tremendous opportunity for 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.