Disrupting a present offer usually risks cannibalization, so leaders must cautiously assess shifts in value pools before making their proceedings.
FREMONT, CA: Technology is crucial in building a digital commercial mainstay, but a digital transformation is a business focus, not an IT project, and has to be managed as one. Such a transformation includes adopting new skills, mindsets, tools, and processes and learning how to use them in all parts of the business. Leaders must also move quickly.
New growth
New organic growth starts when companies consider how digitization could impact all parts of the value chain, from raw materials to end customers. To learn the potential, the best companies establish cross-functional teams with staff from marketing and sales, R&D, product development, and downstream-market experts. This cross-section of talent is necessary to recognize promising opportunities across the business, work out how to capture them, and translate the findings into fresh products or services or fresh value propositions for extant ones.
Securing any possibilities still needs a close knowledge of the requirements of end users, so the best teams interview and watch them learn how they act with a product or technology and what elegances and innovations they would like to see. For example, new opportunities created by digital developments, like 3-D printing, have motivated materials companies to introduce innovative products. Examples involve new classes of polymers with the structural stability to substitute metal plates and prosthetics in bone surgery. Nevertheless, colored polylactic acid satisfies customers' aesthetic requirements, on the other hand.
Disrupting a present offer usually risks cannibalization, so leaders must cautiously assess shifts in value pools before making their proceedings.
Better access to customers
Multichannel businesses continuously surpass their single-channel peers. Still, few chemical companies have accepted online sales channels; most still serve customers primarily with their direct sales forces and distribution associates. Our recent research on B2B customer decision journeys displays that customers of chemicals, energy, and other materials industries proceed to see personal interplay as important for some intentions, like identifying suppliers or researching new products. 80% of the buyers find it useful to speak to someone personally when they get a fully new product or service. Still, the number dramatically changes on other occasions; only 15% of buyers find this helpful when they order the same product or service they obtained the last time. As the market's digital maturity rises, digital approaches are increasingly necessary to complement personal interaction.
Data-driven decision making
Even in an age of big data, so many choices are still made by senior leaders dependent on gut feeling. Commercial teams, from top management to field staff, can drastically improve their decision-making if they employ advanced analytic engines to search data and unearth perceptions that can aid companies in growing and expanding their margins.
Seeking to improve the sales force's productivity, one chief chemical distributor utilized a machine-learning application to determine how collaborating with product experts impacted sales. Collecting and mining gigabytes of metadata from phone records, calendar records, email traffic, and the like uncovered that its top-quartile product adepts increased sales by 6%, whereas its bottom-quartile experts had zero influence. Moreover, the company identified that its high-impact product experts had networks of salespeople three to four times bigger than their other product proficients and participated in four times as many monthly calls and 12 times as many meetings. Along with these details, it developed targeted initiatives to improve connectivity and raise sales growth.
One specialty-chemical company abandoned its yearly inflation-based across-the-board price increases and applied dynamic peer-based pricing to all possible combinations of products and customers to better margins. It adopted up to 150,000 product and customer price points in each country, considering as many as eight distinct price drivers for all customers and their risk profiles. The outcomes were dramatic: realized price increases rose from 1% to 3 to 5%. The greatest challenge was not calculating the new price points; state-of-the-art advanced analytic engines looked out of that in a few days. What took time was guaranteeing that all, from top management to battlefront salespeople, bought into the new method, comprehended what to do, trusting the findings, and acted on them.
An excellent customer experience
Digital presents companies with ways to delight customers by easing and streamlining their customer journeys at each step, from offering instant quotes through dynamic deal scoring at the supplier-choosing stage to surveillance equipment remotely and providing preventive-maintenance recommendations at the service stage. Employing digital technology, chemical companies can move from improving customer touchpoints to remodeling whole customer journeys to diminish churn, increase win rates, and cut service costs.
One of the world's greatest logistics companies researched sales and service problems with its customers to identify the top 20 pain points, which incorporated poor sales-response times, confined real-time tracking data, and inadequate access to customer service. It then reshaped and automated error-prone manual processes to address 16 of the 20 while bringing together vital data in an easy-to-use digital interface that enabled customer-facing personnel to allow seamless customer journeys. Customer fulfillment soared. Selling, general, and administrative costs are awaited to fall by 20 to 30% initially and by as much as 60% once digitization is complete.
