Offering products and services that customers value most is crucial for business success. Therefore, Clariant strives to understand customer needs along the entire value chain, develop solutions that address those needs, and capture the value created for profitable growth.
Due to overcapacity, increasing commoditization in petrochemical and chemical markets, and current macroeconomic trends, pricing pressure in the chemicals sector is high, especially in Asia. As a result, businesses that focus on specialty chemicals are diverging further from commodity chemicals providers. In order to capture the most benefit from the attractiveness of the specialty chemicals business, Clariant must pay as much attention to cost and supply chain competitiveness as it does to profitable growth. In addition, as sustainability is becoming an increasingly important buying criteria, it is integral to Clariant’s business strategy. The Portfolio Value Program (PVP) screens the product portfolio for sustainability performance on 36 criteria considering the entire full lifecycle. Clariant awards products that show an excellent sustainability profile based on the PVP criteria with its EcoTain® label.
Digitization will also continue to impact the commercial process for the foreseeable future. For example, multi-channel sales possibilities, advanced sales analytics, and new service models all provide opportunities to increase revenues. In November 2016, Clariant established the corporate initiative Digital4Clariant to explore these new avenues of growth. In a first step, a cross-functional team with people from all Business Units has been formed that now develops a digital roadmap and sets up a project pipeline.
In recent years, Clariant has transformed itself from a mainly product-driven towards a customer-centric company. To deepen customer centricity Clariant launched the Clariant Commercial Excellence initiative in 2011. The initiative focuses on people, skills, and culture while supporting the Business Units in developing actionable commercial growth plans. The initiative also emphasizes continuous improvement of commercial strategies, customer engagement, and sales operations through ongoing dialog with existing customers, new prospects, and additional partners along the value chain. In this regard, Clariant conducted approximately 500 face-to-face interviews with customers in 2016.
An in-depth understanding of true customer needs is a prerequisite for developing compelling value propositions. By appreciating the customer’s »job to be done«, Clariant can offer solutions that improve processes, save time, and optimize overall costs. For example, flame retardant customers asked for features such as low viscosity and consistent quality. Clariant not only met these direct requests, but was also able to capture the actual need beneath the surface: a desire for synchronized supply chains and reduced application costs. Constant and consistent customer dialog was key to this success.
As part of the Commercial Excellence Initiative, Clariant runs biannual customer satisfaction surveys. The surveys show that Clariant’s reputation as an »innovative solution provider« has increased steadily over the last few years. In 2016, Clariant received feedback from 2 693 customer contacts (compared to 1 430 in the previous survey) showing strong innovation performance improvements regarding both satisfaction and competitive performance. Of all survey participants, 65% consider Clariant an innovative solution provider, 91% intend to continue business with Clariant (prior survey: 79%), and 81% plan to intensify the business relationship. The net promoter score increased from 29% to 37% in 2016. All of these indicators represent performance above industry benchmark.
The feedback received through the surveys provides valuable »outside-in« information that is used to increase operational, commercial, and innovation performance. For example, based on survey feedback, the Executive Committee incorporated on-time, in-full (OTIF) customer delivery targets into Clariant’s performance review meetings for all relevant staff, including Business Unit heads.
»Once we made the customer need the start of our action rather than the output of our process, we could create real value and true customer loyalty.«
Stephan Lynen Head of Business Unit Additives
Once customers’ needs are well understood, insights are either fed back into the Idea to Market phase if Clariant does not have a suitable current offering, or are forwarded to Marketing Excellence professionals who articulate to existing and potential customers the value created with existing offerings. In this regard the Clariant value calculator is a helpful tool to demonstrate and visualize the monetary benefits of using Clariant solutions compared to the next best alternative. Evaluating sustainability aspects and the resulting benefits for customers is also an essential part of Clariant’s value-based pricing approach. Since 2012, approximately 2 000 customer-facing employees were trained in value-based pricing. By carving out the savings or revenue upside in terms of total costs of ownership at a mutually beneficial price point, Clariant can transform value created for customers into profitable growth.
In 2016, Clariant conducted 22 Marketing Excellence projects across all Business Units. All projects targeted capability enhancements that could drive execution throughout the commercial organization in order to deliver on the Business Unit strategies. In the Business Unit Masterbatches in Belgium and the Netherlands, for example, identifying growth pockets and building an action plan in attractive market segments of the food and beverage packaging industry resulted in a sales growth of 31% compared to the previous year. Overall, growth benefits from Marketing Excellence initiatives in terms of additional margin accounted for more than CHF 10 million in 2016. In 2017, Clariant plans to conduct more than 30 dedicated Marketing Excellence projects across all Business Units to further develop organizational capabilities and enhance drivers for growth.
Harald Dialer Head of Clariant Excellence»Stringently and sustainably cultivating commercial skills is indispensable for customer centricity and further building our commercial DNA. Close collaboration across business functions is crucial for this.«
In the Market to Customer phase customer needs are transformed into additional sales potential.
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Additional margin in CHF m from Marketing Excellence Initiatives
Customers want to continue doing business
Customers plan to intensify the business relationship
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Clariant solutions are designed to create additional value – for the customers and for Clariant. Take the example of AmoMax® 10, a highly efficient catalyst to produce fertilizers with less energy compared to conventional solutions.
Reducing energy consumption is not only good for the environment, it also saves costs. Clariant is able to quantify this and other benefits to the customers, supporting mutually beneficial agreements at a price point that allows both the customer and Clariant to capture significant value from the collaboration.
With catalysts, reactions occur faster and require less activation energy than without them. Catalyst improvements are paramount for the energy intensive ammonia industry. Clariant offers the superior catalyst AmoMax® 10 for ammonia synthesis:
The Clariant Value Calculator is an analytical tool based on Clariant Commercial Excellence methodologies. Tailored to the specific circumstances of the intended application, the calculator quantifies the monetary benefits the customer experiences when using Clariant solutions such as AmoMax® 10.
The overall total value creation adds up to approx. USD 2.49 million over the life time of the catalyst.
