Our client — global leader and specialty materials supplier Eastman Chemical Company — was determined to increase organic growth by improving value creation and value capture among its global key accounts. This project was initiated to inform and enrich their growth strategies; helping to prioritize opportunities to accelerate profitable growth with global key accounts.
Eastman’s objectives for the engagement were to:
- Understand the value they provided to customers and the impact of their products and services on customer profitability
- Optimize their current value proposition versus competition
- Develop a prioritized list of customer-driven growth opportunities and associated insights to inform investment decisions
- Strengthen relationships with key customer executives
The engagement provided Eastman with detailed visibility into their customer’s perspective on the value that they help to generate, the current status of their relationship, how they compared to competitors and specific actions to take for a mutually beneficial partnership in the future.
Check out our conversation with Heather, Eastman’s Global Commercial Director.
Understand & Measure
In order to establish a well-defined foundation and prioritize strategic growth opportunities and challenges, the Luminas team kicked off the project by understanding the current-state perspective through interviews with key Eastman executives. This dialogue confirmed their objectives, provided insight into the leaders’ assessment on the status of their existing business and identified the perceived challenges and opportunities facing the company. From there, having identified a global glass manufacturer as the global key account to review, we conducted working sessions with key multi-functional members of the customer account team. Together, we worked to understand Eastman’s growth strategy with the account and quantify their perspective of the value delivered to the customer through products and services, and across three regions of their business – North America, Asia Pacific and EMEA (Europe, Middle East and Africa). The team at Eastman had just established their first ever long-term agreement with the account and while on a growth trajectory, the team estimated a differential value of 10% was delivered to the customer versus the primary competitor. Here’s what this means: for every dollar the customer spent with Eastman, they received an additional 10 cents in value that they could not get from the next best alternative, or Eastman’s primary competitor.
The first stage in helping our client to develop a foundation for sustainable, strategic growth was to identify their internal perspective regarding which of their products, services and capabilities were differential and positively impacting their existing customer relationship, and to confirm internal alignment on the perceived value their customer received.
“As we considered evaluating relationships with existing customers, some members of our team were hesitant,” said Anne-Mieke Duyck, Sales Director, Advanced Materials Interlayers, Automotive at Eastman. “However, validating our company’s differential value proposition – with our customer – proved to be truly transformative. We’ve since incorporated the Luminas Customer Value Xcelerator® methodology as a standard practice to guide customer strategy and planning — we continue to realize results from the investment after four years of implementation.”
With this in-house preparation and evaluation complete, Eastman was equipped with an informed internal perspective of their customer value proposition. Next, we carried out four customer stakeholder interviews with representatives from across the predetermined customer regions where Eastman’s products and services were used in their operations. These facilitated sessions uncovered the customer’s perspective of the differential value received from Eastman. To Eastman’s surprise, much of the value they believed was realized by the customer, was not differential relative to competition. They learned that the differential value was, instead, distinct across the regions, as each region had discrete priorities and value drivers.
The customer validation interviews produced customer insight and competitive intelligence which exposed that the differential value was limited and that important steps needed to be taken to move the partnership forward. In fact, some of the drivers of differential value that Eastman had identified, were considered by the customer as “expected” or “table stakes.” Most importantly, the validation interviews functioned as the catalyst to create a roadmap that would ensure timely execution toward meeting all baseline expectations and, over time, to surpassing expectations through the delivery of differential value.
Despite the sobering findings, the investment Eastman made into gaining an authentic and fact-based understanding of their relationship with the client was a worthwhile one.
Eastman discovered that the opportunities to deliver differential value to this important customer varied by region – while supply and logistics presented the prospect for growth in EMEA, technical services and products proved to have potential in North America; and, Asia Pacific revealed significant opportunities in the areas of supply, logistics and products.
In addition, the customer responded by identifying another 13 market-specific, high-priority opportunities that were previously unknown to Eastman yet presented the prospect for the team to deliver measurable value.
It was only after Eastman demonstrated their genuine intent to cultivate a winning relationship with the customer, designed to produce organic growth and profitability for both companies, that a true collaboration was formed.
Eastman recognized the importance of maintaining a steady and open line of communication and collaboration with members of the customer’s organization who were the primary beneficiaries of value – their leadership team. As a result, the two organizations became well-positioned to maintain strategic alignment for the long term. Eastman gained visibility to the differential value they bring to their customer and the opportunity to consistently confirm their customer value proposition in order to address potential market, customer and competitive shifts.
Eastman adopted the disciplined business practice — and continues to cultivate the internal capabilities — of evaluating and measuring their customer value proposition. One area where this new discipline has made a real impact in the organization is the global key account team’s annual planning.
“Luminas’ time with our team was instrumental in shaping the mindset in how we sell value to our customers and in gaining commitment on collaboration for future programs. Our customers genuinely appreciated the approach that we took with the Customer Value Xcelerator,” Heather Singler, Eastman Global Commercial Director, Advanced Interlayers.
Results & Recommendations
Since the initial engagement, Eastman has leveraged quantifiable insights to turn a deficiency into profitable growth and
- achieved double-digit margin growth
- secured a second long-term agreement with the account as a result of the value realized during the execution of the first long term agreement, and
- At the end of the first 3-year agreement, the account validated 20% differential value
Validated customer value insights help organizations to identify and prioritize the key business decisions most relevant for their growth; and enable them to make those decisions more confidently. Based on the insights that were gained through CVX®, Eastman identified as their top two priorities, Customer Engagement and Differential Value Proposition (each defined in the Growth Driver Illuminator™). The team was equipped with the internal capabilities to increase customer collaboration and work together to create additional high value services. Furthermore, they applied the new insights to continuously improve their customer value proposition through deliberate selection of products, services and organizational capabilities that provide truly differential value to the customer. Specifically, as a matter of routine, Eastman has adopted the long-term practice of calculating and communicating the differential value delivered during annual customer reviews.
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.
For more information on how Luminas helps leading brands make more confident business decisions email firstname.lastname@example.org or click here.
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“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.”