HOUSTON (ICIS)--New technology and tools to analyse data are helping chemical companies speed up the multi-decade evolution of the sector from one focused on products to one focused on customers.
Years ago, chemical companies would focus investments and attention on products and expect their efforts to boost profits, said Sucheta Govil, chief commercial officer and member of the managing board at Covestro.
She made her comments during the Accenture Briefing on Customer Centricity, a virtual panel that the consultancy held during the annual meeting of the American Chemistry Council (ACC).
Those times have passed. Barriers to enter markets have fallen, she said. It has become more important to quickly bring a product to market.
Focusing strictly on a product is no longer sufficient. Chemical companies are realising that they have to focus on all of the ways customers interact with their product, from how they first learn about it, to how they purchase it, to how they use it.
For Dow, it is focusing on the problems its customers seek to solve and the outcomes they wish to achieve, said Dan Futter, Dow chief commercial officer. Dow's role is to help its customers in every step of that process.
This shift from product-focused to customer-focused has not been an easy transition.
For the chemical industry, there has always been an obvious link between products and bottom lines, Futter said. That made it easier to justify investments that focused on products, he said.
The link between customers and income was fuzzier and less apparent, Futter said. That made it more difficult to justify investments that focused on customers.
This is where technology can play a role.
Companies are now able to generate much more data about their customers, and they have the software to analyse that data to produce insight.
Chemical companies can use the data to create much stronger correlations between customers and returns on investment, Futter said.
Dow itself has conducted this kind of analysis between actions from the company, responses from its customers and effects on its bottom line.
"There is an obvious and direct correlation between experiences that customers say they have with us being better and worse and financial outcomes we ultimately experience being better or worse," Futter said.
The industry has acknowledged that it has room to improve on its data collection.
In a chemical industry survey conducted by Accenture, only 25% of the respondents said that they had the right data, said Vijay Sarathy. managing director, North America chemicals practice lead at Accenture.
The benefits from technology go beyond analysing customers. Data management and artificial intelligence can help companies make decisions quicker and achieve goals faster, Govil said. It can also cut back on the expensive and time-consuming experimentation that companies had to pursue to achieve similar outcomes in the past.
For customers, digital technology can allow them to do a lot things themselves that, in the past, were done by companies, Futter said. Many customers prefer to take it upon themselves to order products, track their delivery and download datasheets on materials.
The key for chemical companies is to determine what things customers want to do themselves and what things they want on help from the companies, Futter said. The distinction between these two should be as intuitive and natural as possible.
It should be just as easy for a customer to download a safety datasheet as it is to contact a company representative about an exceptionally technical question.
Companies can take some simple steps to see how focused they are on their customers, said Gene Cornfield, managing director, global experience transformation lead, Accenture.
Chemical companies can ask themselves to define their main business, he said. For companies that sell directly to consumers, the answer can defy expectations.
Casper, a company that sells mattresses, does not say it is in the mattress business, Cornfield said. Instead, Casper says it is in the better sleep business.
One response is product-focused. The other is customer-focused.
L'Oreal does not define itself as a cosmetics company, Cornfield said. It is a self-confidence company because that is the outcome its customers want to achieve.
Cornfield extends this exercise in perspective to the ways companies measure themselves. Many companies that say they are centred on customers use metrics that are actually centred on themselves.
They measure growth, sales and other metrics that are centred on the company and not on the experiences of itheir customers, he said. By measuring outcomes that are important to the customer, chemical companies can achieve outcomes that benefit their business.
INSIGHT by Al Greenwood