While new product development and advanced technologies have been the standard approach to achieve a competitive edge, leading firms realize that innovation now stems from creating a differentiated customer experience. Customers who receive additional value through new solution offerings that include insights into product quality and performance and who are provided with extended services outside of the standard sale are more likely to remain loyal.
As chemicals and specialty materials manufacturers develop go-to-market strategies that focus on providing customer value, commercial models must adapt. Deploying overlay roles to sell applications, expanding the use of e-commerce platforms for all customer levels and strengthening distributor relationships to provide connected logistics are three emerging trends that high performers are employing to successfully innovate the customer experience.
Alexander Group’s Manufacturing & Distribution Industry Trends research indicates that leading manufacturers are driving 40% of sales from selling new and innovative applications. Application sales generate greater opportunities for chemicals and specialty materials manufacturers to expand their footprint within existing accounts, which provides customer “stickiness”, while driving incremental margin. However, a traditional account executive may not have the skills to effectively communicate the value proposition of these solutions. While they may have the strong account relationships, they don’t necessarily have the technical expertise. Manufacturers are more commonly deploying overlay specialists with the remit of specifically selling new solutions/applications into both new and existing accounts. These overlay roles are armed with the value messaging and ROI to support the sale. They can also leverage the relationships that the existing account owner has built to help both uncover and close new opportunities. To best allocate specialist resources, chemicals and specialty materials manufacturers are segmenting clients and prospects to ensure they target the right buyers to capture ROI.
Fueled by evolving customer demand, direct-to-customer selling and accelerated by COVID-19, manufacturers are increasingly investing in e-commerce platforms. Alexander Group’s research shows that only 20% of manufacturers leverage an e-commerce self-service channel; however, it is becoming increasingly important. The e-commerce channel is no longer thought of as a way to reach lower tier customers–customers that traditionally fall into the higher tiers are also engaging and purchasing digitally. Ensuring that product can be ordered and fulfilled quickly is no longer a value-add benefit. It is a necessity to compete in today’s evolving landscape.
As buyers are moving to digital means to interact and purchase products and services, the demand for connected logistics between manufacturers and distributors is more critical than ever. Manufacturers are taking steps to both strengthen and rationalize their partner relationships and overall programs. Are distributors providing the necessary customer purchasing behavior insights and data to help manufacturers develop the offerings and applications that buyers desire? Similarly to how customers are segmented into tiers, partners need to also be tiered by the value they bring to manufacturers and the benefits they receive. Partners that fall into the top tier should garner the most attention by the manufacturer and receive the most generous benefits. Differentiating partner incentives, training and support by tier will ensure that the ROI of the partner program is realized.
Developing an innovative customer experience is key to remain competitive in today’s environment. From technical specialists, ease of ordering through e-commerce platforms and developing stronger partner relationships, successful chemicals and specialty materials manufacturers are investing in new strategies and techniques to go outside the standard “product box” to drive growth and ROI.
For more information on how Alexander Group can help you develop your path to provide differentiated customer value, please visit our chemicals and specialty materials webpage and contact a manufacturing practice lead.