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Case Study: BASF Launched A Digital Sales Platform To Drive Customer Engagement & Sales Efficiency

Jerrold Wang, MBA, Analyst & Xiao Zhong, Ph.D., Analyst
November 25, 2020

INTRODUCTION

Through a partnership with Agilis Chemicals, a digital sales platform (DSP) provider, BASF recently launched a DSP for its OPPANOL polyisobutene product family. Through the new platform, BASF's U.S. customers can select specific product grades recommended based on their targeted applications, place and track orders, and make payments. Moreover, this DSP allows customers to directly interact with the BASF team for specific requests, such as asking for product samples and getting technical support. According to BASF, the DSP will serve customers from six major segments, including food, automotive, construction, electronics, sports and leisure, and lubricants.

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USE CASE AND BUSINESS IMPACT

This DSP has at least three major benefits for BASF and is an important step toward sales process digitalization. First, it broadens the company's bandwidth to interact with customers of all sizes by reducing the need for direct interaction. Second, the platform lowers operational costs by minimizing human labor expenses, given that many transactions (initial purchase and repurchase) can happen without phone calls or even emails. Finally, it offers BASF's customers higher transparency on their transactions. Despite these benefits, it is early and therefore unclear how much impact the DSP will have on OPPANOL's revenue and profit. In addition, the nature of the partnership with Agilis Chemicals is not clear, which may cause data security concerns for some of the OPPANOL customers.

#LUXTAKE

The sales process of chemicals is often opaque and time-consuming, which drives the need for an alternative that can make marketing, sales, and distribution more efficient. As we discussed in a previous report, DSPs improve chemical companies' customer touch point in four major steps of the customer journey: the purchase decision, order placement, exchange of goods, and post-sale support.

Over the past 18 months, there has been an increasing amount of DSP adoption by companies like BASF, Covestro, Evonik, and Lanxess. However, much of the activity has come from companies joining third-party platforms. Working with a third party is a good option to start with, as external groups may bring advantages that are supply chain-, geography-, or even culture-specific. However, chemical companies should think about how and when to launch their own DSPs in select business units that have enough demand and a high cost of sales. Otherwise, they could lose some competitive advantage to those who leverage DSPs' transaction speed, customer data, and network effect.

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