Tough times and tough markets are here. Economic outlooks to start 2020 showed chemical markets with decent fundamentals: slow growth but no recession and a stronger 2nd half. None of those outlooks predicted COVID-19 and the impact it would have.
Here we are in the middle of Q2 and COVID-19 has dramatically impacted our lives, our markets, and the economic outlook for the rest of 2020 and into 2021: Demand for most products has declined, in some cases up to 50%. Economists are debating the shape of economic recovery: Will it be v-shaped, u-shaped, or w-shaped? Companies have furloughed and fired employees, cut their capital spend, and withdrawn their 2020 financial forecast. Business leaders everywhere are reframing their budgets and their businesses.
This is not the first down-cycle we’ve experienced. Just recall the 2014 oil price crash or the 2008/9 housing crisis and the impacts they had. In these down-cycles, some businesses thrive and others will stumble. Applying successful lessons and strategies from prior tough markets can help you win business in today’s markets.
1. Understand and respond to your customer’s current reality
Ask more questions and find out what really matters to your customer right now. Your customer’s priorities, interests and needs are likely to be different today than they were 6 months ago. Price is important, but it is only one lever. They could be interested in different delivery locations, modes of transport, product mix or payment terms.
2. Understand your business’s true priorities and imperatives
Yes, cash is king. But what does that really mean for your company? What trade-offs are you willing and able to make? It could be moving inventory to make room for new products, adjusting payment terms, shifting sourcing locations, adjusting leadtimes, or selling more or less than the agreed (contract) volumes. Find out what levers matter most.
3. Leverage your unique strengths, capabilities, and value
Harness your company’s unique value proposition. Even in commodity markets, each company brings something different to its customers. Use your customer’s current reality and their “why” to focus on the unique value you offer to them. It could be quality, timeliness, or creativity in adapting to their needs. Your team and company can deliver results differently than your competitors, so do it.
4. Serve your customers really well
It may seem obvious, but difficult times make great customer service even more important. So be responsive to emails, phone calls, questions and sample requests. Get personal and strengthen your business relationships. Meet your customer’s service needs with excellence.
5. Find new customers and reestablish relationships with former customers
It’s easy to think that your customer already has what they need from existing suppliers, but perhaps not. Companies across the chemicals value chain are facing common and unique challenges related to supply disruptions, business shutdowns, etc. Customers are seeking to diversify their supplier base, optimize supply locations, shift their product portfolio in response to unique market demands. Or maybe they have a one-time need that you can fulfill and garner goodwill for future business. Now is the time to expand and strengthen your relationships.
Apply these 5 strategies to your business to help you maintain and even win business in difficult markets. Over the coming weeks, we’ll be exploring these strategies in more depth.
Progressio Global helps chemical companies win deals and achieve profitable growth by understanding their customers’ why. Looking for help in today’s difficult markets? Let's talk about proven strategies to help your company and your team win deals faster and achieve more profits.