A Focus on Chemicals

In this edition, Godfrey account planner Jim Everhart shares his thoughts on trends and opportunities within the specialty chemicals market. With more than 20 years’ experience at Godfrey and nearly 30 in B2B marketing, he has worked with numerous clients in the chemical industry throughout his career. As Godfrey’s insight lead for the past four years, Jim has conducted hundreds of interviews with chemical suppliers and their customers to learn about the industry from every perspective.

Q. How would you describe the state of the chemical industry today?

A. Industry margins are historically low. The result is an increased emphasis on yield and productivity. So there’s always a focus on continuous process control improvements for consistency, predictability and operational efficiency. But don’t rule out technology breakthroughs—the audience is looking for them, too, although they are generally conservative in adopting new ways because of the costs and risks involved.

As a whole, the chemical industry doesn’t have much opportunity for growth in the traditional sense. Demand tends to stay consistent, as does the pool of prospective customers. But there are some new opportunities. If you’re one of the big chemical players, you can find and market new applications for your existing products. And if you’re a specialty chemical company, you’ll have opportunities to effectively communicate to your potential customers the value and benefits of your products versus what they are currently using.

One new area of focus for chemical companies is in the eco-friendly space. As industries worldwide are pressured to increase energy efficiency, new applications for your products in advanced materials, such as lightweight plastics used in fuel-efficient cars and films used in solar cells, could present themselves.

The other opportunity for growth is through mergers or acquisitions, which is common since the cost of building new manufacturing facilities is often cost-prohibitive.

Q. What are the biggest factors impacting this industry?

A. I see two big ones. The first is the new supplies of natural gas, which shake to their foundations the existing pricing structures for petrochemical-based products. Specifically, the U.S. is moving from being a high-cost producer to among the lowest-cost producers globally.

Second, the aging of the process and plant engineer audience means that we can anticipate a high amount of turnover among the B2B chemical companies’ customer base. So while a manufacturer may not lose the company as a customer, it will have new customer contacts with different levels of experience, different life experiences, different ways of collecting and processing information, and different ways of thinking about their careers.

As a result of these two factors, marketers in the chemical industry need to be in a relationship-building mode for the coming decade, dealing with new competitors, increasing price pressures and changing customer contacts.

Q. How can marketers differentiate themselves?

A. Surprisingly, in addition to building your company’s reputation (or brand) and increasing product awareness, we see a great opportunity in understanding and appealing to your audience’s emotional side. It may seem counterintuitive to emphasize emotions in such a scientifically based market, but that’s exactly what you might want to do to make an impact.

Decision-makers in the chemicals industry are highly educated and knowledgeable, but they’re also stressed and overworked. They want suppliers they can trust. Some of that comes with building a memorable brand and forging audience connections. A lot comes from repeated proof. Show your audience that you have a secure supply chain, proper chemical documentation and consistent quality. Tell them about how you have helped other customers achieve their goals—or let your customers tell the story. Get to know more about your audience so you can make your outbound communications and your content more relevant and more compelling to them.