Sales-Ready Leads for Chemical Suppliers
As a veteran of the chemical industry, I’m struck by how slow the uptake of digital commerce has been. We’ve worn the label of laggard for decades and, while many attempts have been made over the last 30+ years, adoption of digital commerce technologies and processes have failed to grow into any significance. Most of the multibillion-dollar firms I worked with (including our customers and suppliers) never approached conducting even 10% of their business via digital commerce.
And there’s lots of waste. A Bain study found only ~2% of chemical firms believed they priced properly and less than 5% were rigorous in managing price dynamics. Deloitte has been bullish recently on how the industry is finding new ways to digitally transform, but I see familiar product-driven approaches even with newer well-funded digital platforms. It seems the industry is still in a “we’ll see” mindset, with chemical suppliers who are currently successful using traditional lead generation and sales methods are missing out on significant business opportunity and threatening their future as a viable, competitive player.
"Digital transformation in chemicals is presenting immense, largely unexplored new potential to not only increase efficiencies but to help companies design novel products and processes."
-- Achieving the Next Frontier of Chemicals Excellence, Deloitte, 2019
McKinsey recently published an article that has caused me to think anew about this topic and specifically how we’ve positioned our venture here at ChemVM. I believe there is indeed new light coming in the tunnel, and our industry will more rapidly adopt digital commerce and continue to improve our post-pandemic business environment.
Customers Want Digital Experiences, Threaten the Status Quo
In their article How chemical players can win in the transition to digital platforms, McKinsey surveys show chemical customers’ impressive willingness to adopt digital processes “…if efficient and value adding platforms” are available. For instance, one survey shows 55% of European buyers of petrochemical products would be willing to adopt digital channels; this was even higher - 82% - for specialty chemicals. There are rewards and risks of course: having your products and commercial (and perhaps proprietary) information sitting right alongside your competitors isn’t necessarily attractive. However, if you can reach more potential customers and create services valued specifically by those customers, this strategy is a winner.
In the report, the authors describe how new digital platforms are threatening industry incumbents. These are not just the “digital superstars” like Amazon but new start-ups that are creating digital platforms and setting up direct customer relationships. These players directly challenge chemical-industry incumbents with lower costs and a promise of superior customer experiences.
A Digital Shake-Up is Coming
These digital platforms will ultimately shake out at a new industry equilibrium, and customer service levels and efficiencies, that will be much higher than today’s experiences, more closely matching consumer expectations. The McKinsey report calls these platforms “most suitable” for standard products for a highly fragmented customer base and “least suitable” for tailored development applications for specific customers. They also opine that perhaps rather than a single winning platform, industry- or chemistry-specific platforms may emerge.
For chemical companies, this means you need to strategize your specific plan of attack, how you deploy your product portfolios and engage the superstars and digital platform startups. Moreover, you must determine how to take advantage of digital processes to win in the “least suitable” space of tailored applications that earn the highest earnings and greatly increase capital returns of your relatively low utilization equipment investments.
In our research, chemical service providers realize about a ~5% win rate for highly tailored chemical solutions, while their average equipment capacity utilization is less than 50%. This decades-old approach to commerce is expensive, time consuming and delivers weak business performance.
ChemVM Digital Platform Delivers Sales-Ready Leads to Chemical Service Providers
Combining today’s powerful machine learning and digital technology with our deep industry expertise, ChemVM has built an online lead-generating platform for chemical service providers. Like AirBnB and Uber, our algorithm connects you directly to customers who need exactly the chemical services you provide. Our goal is to be a service provider to chemical service providers, helping you efficiently generate high-quality leads, speed your sales process and connect you directly with customers matched to your service portfolios. No more hoping there’s a 5% chance of match – we want our suppliers to realize much greater equipment utilization, capital returns and margins.
And like AirBnB and Uber, customers using ChemVM are directly matched to service providers with the capabilities they need for their tailored chemical applications, driving a new expectation in service level for both customers and chemical service providers. That’s how digital transformation is driven higher and higher.
There’s no reason our industry has to continue to wear the laggard label – don’t be left behind!
Chemical Suppliers and Customers Get Started Here
Chemical procurement and supply chain leaders, chemical process engineers, entrepreneurs and other buyers needing a private label product made, market testing, production outsourcing, or formulation and process engineering support can get started by entering their project at chemvm.com/customers.