The Top Success Metrics and KPIs Manufacturers Need to Know

Manufacturing has always been data-driven, even before the advent of computers. Production managers constantly monitored output, productivity, and other KPIs (key performance indicators) — but the digital transformation has taken metrics tracking to new heights.

Any automated and digitalized process generates an incredible volume of data, with the potential to reveal everything from granular inefficiencies to game-changing opportunities. With the latest generation of cloud-based software, like CPQ (configure, price, quote), performance data goes beyond production metrics to measure the performance of sales processes. But which KPIs are the most important to track, and what do they mean?

The Most Important Metrics of Success

Specialty manufacturers that offer customizable or configurable products have different measurement standards than operations that profit from sheer output and efficiency. Here are the six metrics you need to know:
The ACV is a sales metric that provides insight into the overall effectiveness of your sales strategy. Calculate it by adding the value of all active quotes over a given time frame and dividing that sum by the number of total quotes in that same period. ACV shows the impact of your sales funnel, outreach strategy, deals, and incentive programs on the value of each lead. Use this to refine your sales strategy by testing new incentives and touchpoint methodologies over a certain time period, and see how it impacts your ACV.
How effective is your sales team at retaining customers or renewing contracts? The customer churn rate holds the answer. This metric is for any manufacturer that relies on ongoing renewals, and tracks the number of customers who don’t renew or re-up contracts. You can calculate churn by identifying how many customers were lost in a given timeframe and dividing that number by the total number of customers who were active during that same period.
In the configure, price, quote process, error rate measures the number of mistakes in delivering a particular quote. Mistakes can happen at any stage of the process, such as configuring an non-viable product, or incorrectly pricing a custom order. The higher an error rate, the more problems you have in your sales process, putting your company at risk of losing revenue and reputation. An advanced CPQ solution can reduce error rate to zero.
This old-school KPI measures the time it takes from an order approval to completion of actual production. In the digital era, CPQ software and workflow automation can indirectly speed up production time with faster communication. Once a customer approves a quote and makes payment, the software can automatically add the order to the production team’s queue so there’s no time lost in relaying information.
Another metric that hails from the early days of manufacturing, the ROR measures the net gain or loss from an investment over a period of time. Digital manufacturing tools like CPQ deliver a significant ROR over time, due to their low up-front costs. What’s more, CPQ enables massive efficiency gains throughout the entire sales process. CPQ solutions are a bedrock for productive sales teams because they enable them to close more deals in less time.
As sales processes become more automated and customers expect fast responses, time to quote is becoming a more important metric. It measures how long it takes between initial configuration to delivering the final quote to the customer for consideration. The longer this takes, the greater chance there is to lose business to a competitor. You can also look at changes in this metric to see the impact of your efforts when refining your sales processes.

Anything That Can Be Measured Can Be Improved

Technology has transformed manufacturing operations, and performance metrics have only become more important as a result. Now we can quantify the efficiency of every single process, including those involved in configuring, pricing, and quoting products.
Revalize CPQ a leading cloud-based sales solutions for specialty manufacturers that enables complete visibility into your sales process. By leveraging the platform, you can improve every KPI in this article. Learn more about Revalize in our free ebook, The Ultimate Guide to CPQ. Or schedule a demo to see the platform for yourself.

4 Benefits For Manufacturers That Upgrade to CPQ Software

When looking at switching from a manual product configuration process to an automated CPQ (Configure, Price, Quote) software, some hesitancy — even pushback — is inevitable, but it’s also well worth the discomfort.

Making a major change in the way your business operates can be a scary proposition. Executives considering upgrading processes that have been in effect for years — or even decades — need to have confidence that it will be worth the disruption, not to mention the cost.

4 Benefits of CPQ

CPQ has a transformative effect on every organization’s sales process, but the benefits extend far beyond this one department. Here are the top four biggest changes you can expect from implementation:

1. Improved Product Management and Engineering
With manual configuration processes, the sales team depends on engineers to review and approve every single configuration for viability and pricing. CPQ solutions free up product managers and engineers from this process entirely, so they can spend more time making better products.

CPQ software can also help with product management and engineering by analyzing CPQ data to decide where to spend money on the research and development of new products and product improvements. By looking at which combinations of product options are popular and which are not, your engineering department can better understand what customers want and design accordingly.

Product managers can also use these data points to determine how to extend or expand the reach of the company into new regions or niches. If a product manager can see the opportunity to retool or expand a product line to reach a new market, they can widen the customer base and drive new revenue.

2. Streamlined Operations
Your company is probably already using an ERP or CRM system. The right CPQ solution can seamlessly integrate with your existing business systems and enhance their capabilities. CPQs data-tracking capabilities can help you identify your best-selling products and ensure they are properly stocked and shipped for your suppliers.

For those companies that produce their own parts and supplies in-house, this same data can be used to analyze what’s needed in advance of orders so there’s less “lag time” between the order and the actual production of the configured items.

3. Increased Finance Visibility
Your financial and accounting departments will appreciate the level of data that a CPQ solution can generate for your company. Pricing, revenue, and cash flow data will inform your finance team of exactly how the company is doing in detailed, real-time reporting.

This data can show predictive trends, such as downturns, as well as increases in sales and orders so you can know what to expect at regular intervals. This, in turn, can help your company prepare for those changes in your revenue streams.

4. Higher Marketing ROI
The last area where CPQ can help you (outside of sales) is in your marketing department. We live in the era of “big data,” and the data that comes from a CPQ system can help in a number of ways.

CPQ software allows you to use data to drive your decision-making. Today, business decisions shouldn’t be made solely on a “gut feeling.” Solutions need to be backed up with numbers, showing that an idea will work and provide a measurable return on investment.

CPQ provides insight into what’s currently selling in the market, so you can then look for opportunities in other areas. Marketing can also use sales data to spot product and market trends before your competition — positioning you to be the first company to offer a specific type of product or configuration.

Choosing the Right CPQ Software

Implementing CPQ at your company has an impact far beyond sales. Expect improvements to marketing, finance, operations, and engineering, as well as a treasure trove of data to drive new revenue. Schedule a demo of Revalize to experience the benefit of CPQ for yourself.

5 Top Features Manufacturers Should Look for In Product Configurators

Manufacturing is a highly competitive industry that’s only become more challenging during the last decade. The ongoing labor shortage has been exacerbated by the supply chain disruption that began in 2020, and a skills gap that continues to slow progress. Manufacturers need a way to stand out from competitors with special offerings to mitigate the financial impact of these industry-wide challenges.

One way to do this is through product customization options. One-size-fits-all products are easier to mass produce, but they leave substantial revenue on the table from buyers shopping for specific configurations. That’s where product configurators come in — a special class of software designed to streamline the sales process for customized parts, components, and equipment.

5 Features to Expect From a Product Configurator

The product configurator software market has exploded in recent years as customization becomes more popular. But not all platforms are created equal. Here’s what to look for as you evaluate potential solutions.

1. Clear Bill of Materials

Every custom product needs a bill of materials (BOM), no matter how simple it is. It lists the individual parts that go into creating the finished product, including unit prices and final costs. A BOM clarifies exactly what’s needed or expected from customers, engineers, and other stakeholders involved in the customization process for the most accurate price possible. A worthwhile product configurator will generate a complete BOM that can be customized further to use as you sell your product.

2. Visual Models

A powerful configurator will generate models of a customized product or customers before they make their final decision. Models reduce the need to create physical prototypes and lessen the chance of costly change orders after fulfillment. Ultimately, this is what ensures the most customer satisfaction, as well as repeat business.

3. CAD Models

Beyond the basic computer model of the product, some configurators can also integrate with CAD systems to create fully realized 3D mock-ups of the custom product. Your customer can inspect the product from any angle, with almost as much clarity as if they were holding it in their hands. A to-scale model helps customers fully approve the product before manufacturing begins, as well as gives production teams clearer guidelines to follow in their processes.

4. Safeguards

A well-built configurator allows you to program safeguards that automatically detect when a customer has product parameters you can’t deliver on. Safeguards are vitally important in the customization process and stop an impossible order from proceeding down the sales pipeline, wasting time and money. Plus, safeguards protect your credibility by helping you identify impossible customizations before they get to the production phase. Leverage this sense of authority to guide customers down a more realistic path to keep your revenue secure.

5. Easy, Professional Quote Generation

In the past, it could take days to create a quote. Many times they were hand-written or simply typed on a quote sheet. A configurator automates price calculations, allowing you to generate a quote in just a matter of minutes or hours. The configurator can automatically generate quote documents for customers based on all their input.

Compete in the Marketplace with a Robust Product Configurator

Customization can be the first step in establishing your niche in today’s competitive manufacturing market. Doing this successfully requires a powerful configurator with all of these features to ensure your customers have the best experience possible when choosing their customizable products.
Contact Revalize to schedule a demo and learn more about what our configurator and integrated SCPQ solutions can do for your company.

8 Tips for a Successful CPQ Rollout

One of the most critical aspects of any software product implementation is the launch. If the rollout goes smoothly, your company will avoid many potential problems in the weeks and months that follow. If it goes poorly, this could hinder your organizations’ digital transformation. This is especially true for Configure, Price, Quote (CPQ) software.

A successful rollout can completely transform how you quote orders, setting your company up for massive savings. The smoother it’s implemented, the faster you can start reaping the benefits. But how do you set your team up for success?

8 Tips For An Effective CPQ Launch

1. Understand Your Needs

Establish what your company needs from this software. The right CPQ software can aid everything from engineering calculations, to live visualization, and beyond. Have a meeting with the software provider, list exactly what your business does and how you’re currently generating quotes for your customers, then have them walk you through what the software can do for your company. You need to know:

2. Create Buy-In

Once you make the decision to go with a CPQ software platform, you need to get your employees on board. Show staff how this new system will streamline the existing process, helping them and the company. Emphasize the benefits for them so they can see how it will improve their day-to-day work lives and how they can become active participants in the rollout.

3. Craft Your Plan

Next, craft an implementation plan for your business. This needs to be a joint operation between you and the software provider. You’re the expert when it comes to your business, but the software company is the expert when it comes to CPQ. Create a transition team made up of your employees and theirs.

4. Anticipate Problems

The best way to solve problems is to prevent them from happening. Brainstorm issues that can occur during implementation. Solicit insight from different departments and levels of authority to create an all-encompassing list of potential challenges. The software development team knows the technical challenges they may run into, but not the issues affecting your organization.

5. Train Your Staff

It’s not enough for just the sales staff to understand how this software will work. Train all engineers and the production staff on the floor so everyone knows how this new program will impact the work they do. You want everybody ready to go for the launch of the program so the entire company works together to ensure its success. This will improve buy-in from customers as well.

6. Lean on The Software Company

If we haven’t said this enough already, it bears repeating: you should rely on your software company and their support team at all stages of implementation. These are experts who have already implemented this application with other companies. They will be well-prepared to handle any problems that occur in the implementation process.

7. Reassess

After you’ve finished the roll-out, take some time to reassess what happened. What went well? What could have gone better? The implementation team should meet again to address any concerns that were documented during the launch. In order to move forward, you need to assess where you are for later growth.

8. Celebrate Your Success

Finally, reward everyone who has been a part of this launch. A new software application is a major undertaking for a company. Take time to celebrate with all of your staff so they know their hard work is appreciated.
Successfully launching a CPQ program really takes a village — or in this case, an entire company. If you can attain this sense of unity in your staff, you’re well on your way to a smooth launch. Want to see what Revalize CPQ can do for your company? Get in touch to schedule a demo.

CPQ Best Practices for a Smooth, Successful Launch

Configure, Price, Quote (CPQ) software is one of the most beneficial tools a company can implement, but it often requires a major overhaul of business and sales processes. With so much to gain, it’s important not to get discouraged by inevitable resistance. Humans naturally resist change, both in our personal lives and at work. Whenever a company announces a major change in their internal processes, staff members can often feel stressed — even when they know the change is for the better.

With something as important as your sales processes and revenue pipelines, it’s critical to implement CPQ as effectively and efficiently as possible. That’s why you need a solid strategy for a smooth and successful launch.

3 Best Practices For a CPQ Rollout

CPQ software is a major investment for every organization. Here’s how to create a smooth transition for your employees and customers:

1. Justify the Change

The first thing you need to do is explain the need for the change to your employees. Highlighting the issues you want to overcome by implementing CPQ software will contextualize why the change is happening and give employees a goal to work toward. Taking the time to justify the new software will get employees excited about the changes to come and the benefits they’ll bring.

2. Emphasize the Positive

CPQ software will streamline the most cumbersome processes for your employees, producing more accurate configurations and quotes. That’s great news for them. It’s important to emphasize these positive new aspects to get buy-in from your staff. Focus on:

3. Address Concerns

The next best practice during the launch should be addressing the concerns of your staff and customers. Here’s how to ensure buy-in:
CPQ software is reshaping the future of manufacturing. We know launching a new system is a huge change, but it’s a change that will positively impact your company for years to come. Successful implementation strategies start with highlighting the benefits of a new system, and securing buy-in from both staff and customers. Of course, only the right solution can generate that kind of excitement.

Learn more about what a leading-edge CPQ system can do for your company by scheduling a Revalize demo.