BASF is a global chemical company composed of eleven (11) divisions which are organized across six business segments — chemicals, materials, industrial solutions, surface technologies, nutrition & care and agricultural solutions — to meet the unique needs of customers within nearly every sector, and in almost every country.
The Chemical Intermediates division of BASF, whose core customers are served with commodity and specialty chemicals, was seeking to enhance its growth strategy, bolster its market position and increase share of wallet with its customers. With these goals in mind, Luminas was engaged to support BASF in the development of a growth strategy for their customers. The engagement was designed to accomplish the following:
- Understand value delivered to customers through products, services and other capabilities — specifically gaining insight into the impact each of these has on customer profitability.
- Identify, prioritize and optimize customer-driven opportunities to accelerate profitable growth.
- Develop a prioritized list of growth strategies for customers and the market.
- Recommend actions that will both increase and capture value with customers.
Ultimately, Luminas with its Customer Value Xcelerator (CVX®) offering, delivered valuable insights to support the optimization of a customer-validated value proposition, develop an informed set of potential investment opportunities and further cultivate win-win profitable relationships.
Together, we concentrated the CVX® engagement on customers within the Chemical Intermediates division.
Understand & Measure
Luminas began the project by helping the BASF account teams develop their perspective of the differential value currently being delivered to their customers. This included collecting data and gathering qualitative information from team members who articulated their viewpoint on the ways in which they believe BASF uniquely contributes value to their customers. After organizing the data collected, Luminas facilitated a working session with a cross-functional group of leaders and customer support representatives including executives, product management, sales, account management and business directors. This working session helped the teams gain an aligned perspective on the BASF products, services and capabilities that provided differential customer value. The process produced an integrated hypothesis of the differential value that BASF believed it was delivering to each customer.
During this internal review of BASF’s products and services, the account teams agreed that BASF delivered differential value to its customers through several areas, including: product support, supply chain, and product access. However, this deep-dive analysis also created an awareness among the BASF account and leadership team that the mix of differential value drivers appeared to vary between the customers.
Once BASF achieved this internal consensus, Luminas — with selected members of the BASF team in attendance —facilitated validation interviews with senior leaders and other beneficiaries of value among their customers. These discussions were designed to educate and illuminate the BASF team on the accuracy of their internal hypothesis. On the surface, the customer responses revealed the areas where BASF estimated they were delivering value were correct. In diving deeper, they discovered that while some similarities existed among customers, there were other areas in which exponentially more value was being realized by customers. The customer agreed with the areas identified as providing differential value to them, however; the total quantified differential value identified from the internal perspective reduced by approximately 40% in the customers’ validation. The customers validated product access as the most significant contributor to differential value, which differed from the BASF team’s perspective. This insight was valuable and helped shape the enhanced customer growth strategy.
The customer value validation exercise was enlightening. It created the opportunity for meaningful dialogue and provided BASF with practical customer insights and competitive intelligence that enabled them to better understand the prospects for growth among each customer, and prioritize future strategies and potential investments.
“By utilizing Luminas and their process, we were able to confirm our value generation hypothesis. This led to the refinement of customized customer offerings to help meet their needs today and in the future.”
-- Kevin Anderson, Vice President, Business Management Amines, Acetylenics, and Carbonyl Derivatives, Chemical Intermediates, North America
Equipped with both qualitative and quantitative data from the customer validation interviews, Luminas compared the BASF internal perspective of differential value to the customer-validated calculations. This assessment helped identify key insights and actions that played an essential role in developing a customized, mutually-beneficial strategy to accelerate growth.
In the end, the customers shared a detailed and prioritized list of future growth opportunities and recommended that BASF consider other services, business initiatives and capabilities that could contribute greater value in the future. They suggested priority actions based on current industry conditions that could expand access to more products and quickly help drive sales growth:
- Invest in product access and supply chain enhancements
- Provide continued support and collaboration on sustainability initiatives
- Expand digital capabilities
“Luminas brought an outside view to BASF that ensured we are listening to our customers, rather than BASF providing what we believed our customers wanted.”
-- Erika Peterman, Senior Vice President, Chemical Intermediates, North America.
Results and Recommendations
Based on the CVX® findings, Luminas provided BASF with a unique set of prioritized strategic and tactical recommendations supported by key insights. The key areas of recommended focus included: Customer Engagement;
Differential Value Proposition; and Customer Planning. The Luminas team facilitated a planning workshop with customer account teams to support implementation of the recommendations to impact to business growth.
Luminas also proposed a set of additional considerations to accelerate organic growth. These include:
- Continue collaboration on account strategy and planning to increase alignment on the customers’ KPIs
- Increase access to product management and support to help drive additional sales
- Deliver value-added services that are “win-win,” in the spirit of long-term partnership
In summary, validated customer insights help organizations make more confident decisions to create and capture additional customer value. Luminas leveraged the detailed information provided by BASF’s customers to help the company recognize the potential benefit of enhanced customer collaboration and taking an outside-in approach to customer relationships. This method captured a more accurate perspective of the customer’s growth drivers and pain points, along with opportunities to cultivate true customer partnerships.
CVX supports the development of growth strategies and plans for key accounts, market segments and new products — providing specific actions based on validated customer insight and competitive intelligence captured through the process.
Continue Keep doing what’s delivering differential value today.
Fix Adjust the offerings that are eroding customer value today.
Enhance Make improvements that can deliver even more differential value.
Expedite Introduce current offerings that provide immediate impact to the customer.
Create Develop and implement the highest priority and mutually profitable new offerings.
Your organization can begin improving its winning score with customers by taking the following steps:
- Develop the key strategic growth questions that shape the organization’s organic growth.
- Identify the priority market segments, major customers and new products/services that are most critical to your organization’s organic growth.
- Select a group of customers to engage in an initial introduction of CVX.
- Engage your leadership to complete the Growth Driver Illuminator™️ to identify the current key growth decisions and develop decision-making confidence.
- Select a cross-functional internal team and begin developing your perspective on the differential value provided for the selected customers — we’re here to help.
To request more information on how Luminas helps leading brands make more confident business decisions click here.
“Luminas has had a definite impact on the way our sales team thinks about how to sell value. We wouldn’t be where we are today if we hadn’t gone through the process with them and gained such meaningful insights.”
“The whole team was engaged in the work with Luminas, it was impressive. As a result, we discovered areas where we can grow, become more nimble and think strategically about our business. We are now better prepared to partner with our customers and manage through big changes.
“Our customers were very appreciative that we took the time to ask the right questions about what is important to their business. Luminas helped us to create a more customer centric organization and to focus on what they value.”
“We saw the Luminas team as our partners, they were humble and cared about our business. Our customers found immense value in having conversations with us; the process showed our customers that we were interested in their feedback and wanted to hear their insights.”