Pricing & Sales in the Chemical Industry

For long-term success in the market, it is essential not only to understand the direct sales markets, but to establish a detailed understanding of the entire value chain. Only in this way is it possible to make value-creating portfolio decisions and to understand and quantify the added value of one's own products at the subsequent stages. This, in turn, is a decisive prerequisite for professional pricing and successful action in sales. In addition, the consequences of the Coronavirus pandemic must be evaluated. In particular, this raises the question of the extent to which supply chains will be set up more regionally again in the future and, conversely, what this means for the orientation of the company's own customer service.

A clear understanding of customer needs and the customer journey is of the utmost importance to successfully hold one's own in the market. This is accompanied by the need to consistently align all market-side processes with customer requirements (customer centricity). In order to be able to respond to customer requirements in the best possible way, the implementation of customer segmentation including corresponding standard strategies for sales and pricing measures is very important. Modern customer segmentation should go beyond a pure volume view (such as ABC by revenue) and take account of the needs of customers. These are likely to become even more differentiated in the future (price versus innovation and sustainability).

The development of a multi-channel strategy is essential for successful adaptation to changing customer needs. In this context, a wide variety of questions must be answered. These include, among others: What goals are to be achieved with the individual channels? Which customers should be served with which channels? Which product ranges are to be distributed via which channels? How will the success of the individual channels be measured in the future? In this context, it is important to clarify the role of the individual channels, considering the different phases of the customer journey.

Another important building block is the consistent digitization of sales. Here, it is important to systematically identify starting points for the digitization of processes along the entire sales process. This applies to all core areas of the sales process such as Business Development, Contact Management, Offer management and Aftersales Management. The next step is to identify and implement suitable digital tools on the basis of structured requirements (Digitization Sales). Here, the spectrum ranges from lead tracking software to chat bots, CPQ solutions to CRM and BI tools.

In the chemical industry, pricing is still about successfully exploiting the added value of the company's own products and establishing systematic and performance-oriented customer price differentiation. Target price systems, supplemented by dynamic pricing components, are ideal for this purpose. To this end, the relevant price drivers at product, market, customer and order level must be identified and mapped in a pricing calculator. As a supplement to this approach, peer pricing methods have proven their worth, helping to increase transparency and continuously improve price quality in the sense of internal benchmarking. Once a pricing model has been successfully developed and calibrated, it should be implemented sustainably using pricing or CPQ software. In addition to pure product pricing, it is also very important to price all additional services. The first and decisive step here is a change in awareness. In order to price additional services, they must first be systematically identified. Only then is it possible to communicate the added value of one's own services to one's own customers in a comprehensible way. With regard to pricing for customers, a differentiated approach is recommended, taking into account the customer segment and service type.

To achieve ambitious growth targets, it is necessary to grow with both new and existing customers. Modern sales tools and clear processes (e.g., for generating and processing hunting lists) are necessary for this to succeed. In addition, the use of up-to-date analytics including artificial intelligence is necessary. Particularly in the area of cross-selling and up-selling, corresponding associative analyses can create great added value. All measures must be supported by intelligent incentive systems for sales employees. These should map the multi-layered goals in sales as simply as possible and with a direct connection between performance and remuneration.