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 Chuck Schaeffer How Manufacturing CPQ Software Simplifies Complex Selling

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Manufacturers of complex products face some of the most challenging selling of any industry. Generating accurate quotes and taking orders for technical, highly configurable or products with multiple options, which are often governed by operational constraints, compound configuration rules and razor thin margins, can delay sales cycles and frustrate both sales people and customers.

Compounding the challenge is a manufacturing trend whereby standardized products are on the decline. To better compete in a global economy manufacturers are increasingly becoming more agile and adopting more customer-oriented practices such as configure-to-demand and make-to-order. They're also responding to increased customer demands with more product offerings, more options and more variations.

But as you can imagine, introducing more business agility while selling complex products and services through both direct and indirect channels and to increasingly more sophisticated buyers is making an already challenging selling process even tougher. Fortunately, improved technology is stepping up to meet these challenges.

Manufacturing Benefiting from New CPQ Technology

Configure Price Quote (CPQ) software solutions have been around for decades. But for most manufacturers they’ve been costly, overly technical and inflexible. And for most sales people, they've been difficult to use.

Fortunately, the consumerization of IT has not just reached CRM systems but also many of the add-on productivity applications found in CRM ecosystems. Highly graphical and easy to use CPQ applications are now commonly embedded within CRM software apps in a way that they inherit the same navigation and look & feel, so that sales pros can quickly learn these apps while working within the CRM environment where they already spend their time.

These applications are becoming even more indispensable for companies where product, pricing and promotion changes and additions are more fluid than ever. Even better, putting the engineering expertise into the hands of sales staff empowers them to shorten quote and order cycle times while improving acceleration and accuracy. A dream come true for sales staff.

Taking it a step further, manufacturers can facilitate the extended enterprise by enabling CPQ automation with business partners and indirect sales channels. This is most commonly done using Extranet portals, but can also take place on partner networks or mobile devices such as tablets.

Top CPQ Software Benefits

From my experience, here are some of the most strategic benefits of CPQ software.

  • Configure-Price-Quote software enables sales staff to deliver accurate product recommendations, custom configurations and pricing at the point of sale. This eliminates the cycle whereby sales people take customer requests back to a product expert at the office in order to get product details and pricing.
  • The software significantly decreases time frames for sales people to produce more accurate opportunities, quotes and orders. This of course also decreases sales cycle durations.
  • More accurate sale orders also reduces the volume of credit memos, RMAs and returned products.
  • The technology can institutionalize corporate knowledge in a way that complex product and selling information can be shared and reused by others. This is particularly helpful with indirect sales channels such as OEMs, dealers and indirect sales reps.
  • These apps can aid a change in sales person perception by the customer; by advancing the sales person's role from a go-between resource to a professional that can add value in getting the complex product the customer needs.
  • The technology also empowers the manufacturer to introduce more frequent product updates, bundles or kits, promotions and pricing changes. It then also aids downstream processes such as BOM explosions and routings for the shop floor.
  • It increases the breadth of products sold by the manufacturer. This often stems from sales people no longer only pushing the products for which they had the personal knowledge to easily sell.
  • CPQ software can even contribute to streamlined selling processes which then facilitate new product rollouts or product expansions, geographical market extensions and new market entries.

CPQ Review Recommendations

Here’s some thoughts to consider when reviewing Configure-Price-Quote applications.

  • For field sales forces, make sure the mobile CPQ solution works well on tablet devices. When field sales staff can involve customers with a visual, build-it-on-the-fly configurator they not only produce an accurate quote, they engage the customer in an interactive sales experience that aids winning the sale opportunity.
  • For call centers or contact centers, review automated up-sell techniques, accompanying screen sharing technology that works with the CPQ software and integration with downstream fulfillment or ERP systems. CPQ solutions can empower call center agents to create quotes, take complex orders or proactively reach out to sell extended maintenance plans, warranty renewals or product upgrades. In fact, when including these types of sales processes along with other CPQ (or CRM) functions such as up-sell, cross-sell and next best offer (NBO) technology, companies can finally achieve the elusive goal of transitioning the call center from a cost center to a profit center.
  • Ease of use is a critical success factor for CPQ solutions. Many sales people will avoid or reject complex configurators that require extensive training, don't function as prescribed or incur what they believe to be too many confusing messages. This challenge is exacerbated with indirect channels such as agents, dealers and distributors that may not receive or voluntarily invest in software training.
  • Don't be tempted to review CPQ software in the absence of a more holistic technology strategy. CPQ software with tight integration to your ERP or CRM software will improve the user experience (via similar navigation and reduced learning curves) and lower IT costs.
  • Constraint-based sales order entry configurators often succeed or fail based on the flexibility of the rules engine. When reviewing CPQ software, don't get enamored with the generic demo use cases. Instead, insist upon seeing your own products, with your own business rules and exception conditions, and invest some extra time to really understand the capabilities and constraints of the rules engine.

Summary

Empowering sales professionals with CPQ technology that helps them be more responsive to customers while also demonstrating product expertise improves sales credibility and goes a long way in meeting or exceeding client expectations. Using this same technology to simplify complex quotes and take orders more quickly, while at the same time improve accuracy and reduce the number of quote revisions, serves the strategic sales goals of decreasing sales cycle durations and increasing sales win rates. End

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Comments (6) — Comments for this page are closed —

Guest Chris Nichols
  What CPQ software products do you recommend that have good integration with CRM software?
  Chuck Chuck Schaeffer
    I wouldn't recommend any CPQ software solution without understanding your objectives, but I will share some CPQ applications that I've reviewed or implemented and have strong positive reputations in the marketplace. Experlogix and Cincom Acquire are strong solutions with tight integration to Microsoft CRM. Apttus, BigMachines and CallidusCloud have solutions that integrate with Salesforce.com.
  Guest tech411
    Since BigMachines has been acquired by Oracle I would be very cautious about using that product with SFDC. Going forward I expect Big Machines to really only be well suited for Oracle CRM and ERP.
  Guest Jamie Sionson
    Oracle Siebel also does configuration/CPQ, however, I think the Big Machines acquisition will accelerate the sunsetting of Siebel for CPQ.

Guest Sherman Kohl
  We made the move to Callidus Cloud CPQ. In addition to the CPQ benefits, we have seen increased CRM software adoption. The sales people now creates quotes in one-fifth the time, and don't have to return to home base as often and chase down the product experts.

Guest Sam Dvreck
  Industrial manufacturers would like nothing more than to simplify their products. Unfortunately, customers are no longer interested in vanilla or dumbed down solutions. Innovative start-ups are using cloud technology with offshore assembly or manufacturing to give customers what they want, when they want at an attractive price. I think your point that manufacturers can respond (and have to respond) with CPQ and similar technology is a good one.

 

 

 

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Using CPQ software to simplify complex quotes and take orders more quickly, while at the same time improve accuracy and reduce the number of quote revisions, serves the strategic sales goals of decreasing sales cycle durations and increasing sales win rates.

 

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