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Digitalization & its Impact on Customer-facing Functions: FEICA Interviews SpecialChem CEO Christophe Cabarry

SpecialChem – May 21, 2018

Christophe Cabarry (Founder and CEO of SpecialChem) FEICA is delighted to welcome Christophe Cabarry, Founder and CEO of SpecialChem to its 2018 Conference and EXPO in Riga!

FEICA CONNECT spoke with Christophe to get a preview of some of the key concepts he will discuss at the show.

He will share his insights into the impact of the digitalization of customer-facing functions in the chemical industry in general and their relevance for the adhesive and sealant industry in particular.

This complements the presentation at last year’s Conference by SpecialChem on how digitalization can speed up and improve R&D and innovation in our industry.


Let’s hear from Christophe:


CONNECT: Christophe, could you give us an outline of the areas you will discuss?


Christophe Cabarry (CC): I’m going to focus on the impact of digitalization on customer-facing functions such as sales and marketing, which is one of the most interesting and challenging areas to digitalize. I’ll be looking at how these functions interact with the digital world. I won’t be talking about digitalization itself, or digitalization in the supply chain or other functions such as finance. But what I discuss will be relevant for the Conference audience; raw materials suppliers as well as adhesive and sealant manufacturers.


CONNECT: What’s the current status of digitalization in the B2B world?


CC: There has been a definite acceleration in digitalization in B2B over the last 18 months. Most companies we have talked to are investing in digitalizing their business. It’s hard to say precisely what has prompted this acceleration, but I suspect that pressure to change from business partners in other, already digitalized sectors has played a role. Digitalization really is influencing every sector of the economy.

You Need to be Digitally Active to be Contacted


CONNECT: Could you explain this pressure in more detail?


CC: Most importantly, the customers of B2B companies are digitalizing. This creates pressure on B2B businesses to follow suit. For example, adhesive and sealant companies often sell to engineers. The way engineers work has changed. Research shows that more than 78% of engineers spend in excess of three hours each week on purchase-related internet searches. 61% visit more than 6 websites each week in these searches. They now prefer digital channels. 53% don’t go to trade shows, but 67% do attend webinars1.

Also, the way they buy has changed. Engineers normally work on three to five projects at any one time. These typically pass through phases that include exploration, analysis/screening, testing, and approval. The big change here is that engineers are undertaking the exploration and analysis/screening phases themselves using digital channels.


You need to be present on the “digital path” of engineers


Previously, this would have been done together with suppliers. Now, the first contact with adhesive and sealant companies will be digital, not personal. So, you need to be present on the “digital path” of engineers (i.e. the digital channels they frequent) to have a chance of being contacted after the exploration and analysis/screening phases.

A large salesforce on the road trying to visit all prospects may no longer be required, but you will require a digital presence. In-bound marketing and a salesforce that can be “reached into” as well as reaches out are important.

When you get that first personal contact from a prospect, you can assume that about 70% of their research has been done and that they will only be contacting two, three, or maybe four potential suppliers.

Contacts are Initiated by Customers

Contacts are initiated by customers; they choose the moment and their preferred channel. Previously, there were a limited number of channels, for example: the salesforce, tradeshows, and conferences. Now, there are many more, including websites, social media, email newsletters, and platforms such as SpecialChem, etc. The challenge of B2B companies is to create the appropriate channels, use them regularly, and make them consistent in terms of message and efficiency.


Digitalization brings with it a range of organizational challenges; Previously, life was simple!


Now we can reach into and out of an organization in numerous ways. The change management process to achieve this transformation is crucial. Most change programs fail because of poor communication and the failure to involve those affected in creating their new futures.

We need to have the right people with the right culture. Of course, we also need the right tools and the right processes for key activities such as lead qualification and content creation.

The challenges this transformation can bring can be particularly tough for salespeople. Prior to digitalization, they “owned” the customer and were the only route into the organization.

At FEICA 2018, I will provide some examples of companies
that have successfully overcome these challenges


Now prospects can choose their channel. So, salespeople need to accept that they will lose some power as a result. However, they can gain useful intelligence on their customers from the “digital footprint” they leave on the company’s digital channels, such as activity on the website, clicks on the email newsletter, etc.


CONNECT: What are the practical implications of this for our members?


CC: In the new digital world, the sales organization will need to be different. There is an opportunity to be more efficient and more effective as you position yourself to sell in the digital world. I will provide some examples of this.

In addition, a McKinsey study on digitalization in the chemicals industry (Demystifying digital marketing and sales in the chemical industry)2 estimated that it could boost EBITDA (earnings before interest, taxes, depreciation, and amortization) by $105 - 205 billion/year. This would be achieved by reducing costs and improving the margin and would involve redesigning the salesforce and be improving management of the process. I will share some results from the study and examine how these benefits could be achieved.

Furthermore, as SpecialChem explained during last year’s conference, digitalization can also affect R&D and innovation by opening up the pipeline to the external world through the “porous stage-gate process”.

Digitalization Affects R&D and Innovation


CONNECT: Should our members adopt a “wait and see” attitude or should they take action now?


CC: In my view, it is time to act. The McKinsey study estimates that there will be a huge shift in market share in the chemicals market, with leaders in the digitalization of marketing gaining some $45 – 65 billion share from the laggards. Some chemicals companies are actively seeking and prototyping new business models. I’ll be examining several of these models at FEICA 2018. I hope my presentation will give delegates at the Conference plenty to think about!

Get the full story at Christophe’s presentation at FEICA2018 in Riga!

FEICA 2018




References

  1. IHS Engineer-ing360 survey, 2015, Digital Media Use in the Industrial Sector
  2. https://www.mckinsey.com

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