Manufacturing Today - November/December 2017 - 14

COLUMN BY | STEFAN GUERTZGEN

Traditional Approach

Digital Economy

tech moves beyond operations to
transform sales and marketing
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The chemical industry is at a crossroads. Faced with market
unpredictability, increased regulations and products that
are quickly moving toward commoditization, it is becoming
increasingly difficult to maintain reasonable margins. Most
chemical manufacturers have responded by reducing costs
with operational efficiencies. One area that is often overlooked, however, is sales and marketing. Fortunately, new
technology and data analytics are offering surprising models for selling products and related services. With these new
strategies, chemical companies are finding it is possible to
preserve margins while adding new revenue streams.
14

manufacturing-today.com NOVEMBER/DECEMBER 2017

New Approaches

B UY AMERICAN

The old-school approach still works
well when there are strong margins
and customers see value in both the
customized products and the support services. However, when customers make purchasing decisions
based on the lowest price and feel
they no longer need support, chemical manufacturers must find new
ways to add value. Below are three
examples of new sales approaches
made possible by the digital economy that could bolster revenue:
> Offer Multiple Service Levels -
Chemical companies could offer
multiple service levels at different
price points based on customer need. For example, chemical
companies could start by including only essential services with
their standard products. To lower
costs, technology could be used to
automate and standardize business processes such as delivery
and payment terms. However, in
addition to basic services, chemical companies also offer additional layers of services, if a customer
wants to upgrade and pay for it.
Data analytics can help provide
direction as to which level of service would be most appealing to
which customers. From an IT
perspective this requires custom-

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In the past, chemical companies developed specialty products that met
individual customer requirements.
To help justify the high purchase
prices of these custom solutions,
chemical companies included free,
comprehensive support services. By
following a "same level of service to
all" approach, some chemical companies ended up hurting their own profitability and devaluing the services.


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Table of Contents for the Digital Edition of Manufacturing Today - November/December 2017

Table of Contents
Manufacturing Today - November/December 2017 - Cover1
Manufacturing Today - November/December 2017 - Cover2
Manufacturing Today - November/December 2017 - 1
Manufacturing Today - November/December 2017 - Table of Contents
Manufacturing Today - November/December 2017 - 3
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Manufacturing Today - November/December 2017 - Cover3
Manufacturing Today - November/December 2017 - Cover4
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