Monday, June 18, 2001

Keys to Online Success for Chemicals Industry

What’s in a name? When it comes to business purchasing online, the promise of a brand name is a significant force driving buyer decisions, according to a recent survey by Accenture of over 200 buyers of industrial chemicals. While price, service, and convenience are also prime considerations for buyers, according to the survey results, 17% of industrial chemicals purchasers said they were “brand seekers” when they purchased online. The survey finds that less than half of B2B customers are pleased with their online purchasing experience because of the one-size-fits-all approach of most Web sites. Accenture finds that this generic approach will no longer work because separate buyer groups have different attitudes and preferences.

To consistently bring repeat online business, chemical industry companies must blend traditional approaches to segmentation, branding, and customer services with the desire to move fast and build elaborate Web sites, according to the survey. The study identifies three key findings for online success:

- There are differences between buyers when it comes to their needs and preferences -- one size does not fit all.

- A brand’s promise, based very much on historical performance, weighs heavily in purchasing decisions.

- Customer service can make or break the sale. Service can be delivered through an efficient and informative Web experience, but customers still want to be able to access a live person to answer questions and resolve problems.

“These findings may appear obvious now, but in the rush to quickly create an online presence, companies in the chemicals industry did not always execute on all of these points," says Andrew Dvorocsik, a chemicals partner for Accenture "Today, companies are figuring out what their customers really want from the Internet, and are focusing on finding ways to increase customer loyalty and decrease costs."

Accenture found that the way to incorporate the study’s findings online is through implementing traditional marketing practices. The answers, according to the study, are the foundation of a “good old-fashioned marketing plan” -- including customer segmentation, targeting, and delivering a strong, consistent customer service experience.

Marketers need to understand their customers’ buying needs:

- Identify the customers who should purchase from you

- Focus marketing activities towards the customers you want to attract

- Use price only as a lever to drive desired customer behavior

- Provide online and live customer service

From a strategic perspective, chemical companies with successful online efforts offer multi-channel access, providing online functionality targeted at specific buyer groups. Chemical industry companies that effectively segment their customers, and deliver capabilities that meet the customer needs of their target segments will be the ones who increase customer loyalty and reduce their costs in the process.