CPQ for Manufacturing

How CPQ for Manufacturing Simplifies Complex Selling

Manufacturers of complex products face some of the most challenging selling of any industry. Products which are governed by operational constraints, compound configuration rules and razor thin margins leave no room for error.

But generating accurate quotes and taking orders for technical, highly configurable or products with multiple options can delay sales cycles and frustrate both sales people and customers. Lengthy contract reviews exacerbate the problem.

Compounding the challenge is an industrial 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 are 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 more sophisticated buyers is making an already challenging selling process even tougher. Fortunately, improved technology is stepping up to meet these challenges.

A New Era of CPQ for Manufacturing Technology

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

Fortunately, the consumerization of IT has not just reached manufacturing CRM systems but also many of the add-on productivity applications found in CRM ecosystems.

Highly graphical and easy to use C-P-Q applications are now commonly embedded within CRM software apps in a way that they inherit the same navigation and look & feel. That helps sales pros 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 sellers is a manufacturing sales best practice that 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, companies can facilitate the extended enterprise by enabling C-P-Q 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.

CPQ for Manufacturing Benefits

From over two decades of client experience, here are some of the most strategic benefits of Configure-Price-Quote software.

  • This type of application 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 reduce 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 channels such as OEMs, dealers and indirect sales reps.
  • These apps can aid a change in sales person perception by the customer. It advances 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 industrial company 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.
  • Configure Price Quote 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 for Manufacturing Industry

CPQ for Manufacturing Recommendations

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

  • For field sales forces, make sure the mobile C-P-Q 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. C-P-Q 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 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 the most critical success factor for these 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 C-P-Q software in the absence of a more holistic technology strategy. The application must have tight integration with your ERP or CRM system to 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. Then invest some extra time to really understand the capabilities and constraints of the rules engine.

The Point is This

Empowering sales professionals with Configure Price Quote 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.