Three buyers, three scorecards, one price

Why the question was worth asking

The customer segment in question carries a large part of the supplier book, so any change in how those customers source has a direct effect on it. The supplier market above them has consolidated hard over the last fifteen to twenty years and now holds four or five large players, with the client second by share at roughly 16 per cent. Consolidation on the supply side is usually the point at which buyers start engineering their own alternatives.

The end market underneath is not uniformly growing either. On the demand outlook reviewed, tissue and packaging grow slowly and the graphic segment declines at about 3.4 per cent a year. Those are projections running to 2030, not observed results, and they matter because they shape which customers have money to spend on service.

Four hypotheses were fixed before any fieldwork started, which is the only honest way to run a study like this. Two of them turned out to be wrong.

What the customers actually said

Multi sourcing is deliberate and it is not going away. Every profile allocates orders to both large and small suppliers, specifically to keep a fallback alive if the main partner cannot deliver on time. That hypothesis held.

Transparent split pricing between product and service, which the client had assumed customers wanted, came back polarised. Buyers do not want the line items separated. They want to negotiate one chemical price with the service inside it. Asked to estimate what the service portion was worth, they answered anywhere from 1 to 30 per cent of the total price, which is a way of saying nobody knows.

Nobody would trade delivery accuracy for a lower price. That hypothesis was false outright, in every profile, with no dissent.

And sustainability does not beat price. It is a threshold. Once the minimum requirement is cleared, price decides. The client holds a third party sustainability rating more than twice the level its customers require of it, and has never used that gap commercially.

The three scorecards

The finding that reframed the account is simple to state and awkward to act on. The three people who decide together are measured on incompatible things. The profit and loss owner is measured in euros a year. Production is measured in tons a year. Sourcing is measured in year on year euro savings.

A proposal that raises output helps production and is invisible to sourcing. A proposal that costs more and delivers a better outcome helps the profit and loss owner and directly damages the sourcing scorecard. The same pitch, sent into the same account, lands or dies depending on which of the three opens it.

It also explains why outcome based selling keeps stalling in this segment. The buying organisation is not built to buy an outcome. The managers doing the buying are measured on category cost savings, and no amount of value argument changes what they are measured on.

Where they said they would pay

Safety was the one place buyers volunteered a premium without being led to it. Production teams were candid that they do not fully understand the chemical risks they carry, and would buy external safety audits and training on that basis. Sourcing would not pay above the minimum requirement, which is exactly what its scorecard predicts.

The client already provides safety training on product handling, equipment use and logistics, free of charge. It is the clearest example in the study of value being delivered and not charged for.

The second opening is expertise. Customers can build the application knowledge internally and would rather not, and chemical cost runs at one to two per cent of their total process cost, so a price increase justified on outcome is small against the base it sits on. That is an argument for value based pricing, and it is offered here as an argument, not as a measured effect.

What the client was left holding

Two sales approaches to test rather than one to adopt. An up sell route that targets each profile on what it is measured on, starting with training and audits where the willingness to pay was explicit. And an outcome based route, with the work honest that these customer organisations do not currently reward buying that way, so the recommendation was to pilot it on small identified use cases rather than to launch it.

Plus a service packaging structure that splits mandatory from add on, so there is something separable to charge for. Today the contracts do not name services as a line item at all, which is why customers have no clear idea what they are getting.

No saving, no value captured and no opportunity size is claimed from this work, because there is none in it. What it produced was a map of who to talk to about what, inside an account where one message had been going to three different scorecards.