Human Factors in Dynamic Pricing of Chemical Suppliers Management
Human factors in dynamic pricing of chemical suppliers management
To successfully implement dynamic pricing, the entire organization needs to change, from top management to front-line sales. Top management needs to understand and support the use of analytics. Sales management needs to learn how to use new insights to better guide their sales representatives and hold them accountable, while front-line sales teams need to learn how to use new capabilities.
Most of the business of chemical suppliers is around long-term repeat orders, because their products usually enter the manufacturing process as part of the extended value chain. As a result, sales teams often maintain a long-term relationship with their customers, fostering a close and friendly relationship, and the new world that dynamic pricing makes possible may feel quite different.
Successful dynamic pricing implementers strive to provide intensive support to front-line salespeople to build trust in the new approach and understand how to use the new analysis based system. As with all new tools and methods introduced, the key to success is to ensure that salespeople experience the benefits of new innovations.
By organizing a series of training courses at all levels of the organization, the most effective chemical suppliers design and deploy different forms, contents and intervention types for each level to meet the challenge of changing thinking mode and behavior. This can include, but is not limited to, top management meetings on how to be an effective change leader.
For business management, this includes one-to-one guidance to help everyone solve their personal development needs, such as how to give feedback, how to solve difficult problems, and how to find the right balance between supervision and micro management.
For field sales staff, this can include training in learning sessions, followed by field sales calls under supervision. An example of technology that can be learned: some successful salespeople attach importance to contacting the technical department of their customers, so that they can understand the product specification details that the customer organization attaches great importance to, and make their products different. In this way, they can tell the purchasing department why their products are valuable and irreplaceable when discussing price increases.
This kind of method has been proved to be able to achieve the learning required for successful deployment of dynamic pricing in a few months. However, it is also important to adjust the pace of change: we have observed that successful companies do not change their tried and tested way of doing business in a few weeks, but take a measured approach and set how many goals they want to achieve in a year.
With the power of advanced analysis and digital technology, chemical suppliers can raise their pricing to a new level of efficiency and improve their profitability. But the benefits can be broader. We’ve observed that companies that really accept dynamic pricing and build new features to run fast see the value they create through these analysis based approaches. Inspired by this success, these chemical suppliers continue to expand their capabilities, continue to learn and move forward, and then begin to link their efforts in the area of pricing with a broader digital strategy.