Product customization is one of the best ways for manufacturers to stand out to customers in this highly competitive market, but introducing configurability and product variations can make the sales process incredibly time consuming. Customer specifications not only add complexity to every order, but the variability in materials, features, and options makes it difficult to pin down prices, especially with so much supply chain volatility. Fortunately, the industry already has a solution: configure, price, quote (CPQ) software.
But what can CPQ do for you and what should you look for in a solution? In this blog, we’ll cover everything you need to know about this technology and how it can benefit your sales team, streamline processes, and increase profits.
The manufacturing industry is trending toward mass customization. The most forward-thinking manufacturers can make tailored products quickly and efficiently. This is really only possible with an advanced CPQ solution.
With a CPQ configurator, customers can decide what their product should look like and plug those details in. The CPQ system can automatically tell them if this is possible with their current capabilities and generate a quote. You and your customers no longer have to wait days to see if the order request is viable.
If you offer your products in standard configurations with little variability, pricing might be relatively straightforward. But, if customers are coming to you with their specifications, you still need to be able to arrive at an accurate price as quickly as you can — even if you’ve never completed an order with that configuration before.
The automation capabilities of a CPQ solution truly shine in pricing. The software accurately establishes pricing based on production costs, optional features, or any combination of those elements. This precision is achieved through a pre-generated rule set in CPQ software, automatically determining the price for an order. Each pricing rule can apply without manual intervention, removing human errors from the process.
You can add approval workflows, discount structures, preferred customer pricing, and variable price books to maximize revenue and continue personalizing the buying journey.
Time is one of your most valuable resources, yet many manufacturers still waste time taking orders manually without the assistance of CPQ software. Take this example of a typical quoting process:
You manage a small, independently owned manufacturer of specialty delivery vehicles. A sales rep receives a call from a company looking to order 10 trucks for their fleet. Your rep goes through all available options with the customer, explaining your capabilities.
Then, the rep contacts the manufacturing floor and talks to the engineers and machinists to assemble a bill of materials (BOM). It is only at this point that your team can assess whether they can fulfill the customer’s requested specifications.
Of course, as this process takes place, someone has to record all information, identify necessary customizations, and apply those pricing rules to the quote. Following these steps, it might take days to generate a quote.
It’s tough to wait for a major order that can make or break your company’s bottom line — and each day that passes is another day your potential customer could switch to a competitor. Even after you deliver the quote, the customer could return to update their specifications or alter the product mix, forcing you to start the quoting process again.
CPQ doesn’t just transform the sales process — it can help your team overcome major challenges and issues. Let’s reconsider the scenario at the beginning of this article in an environment where CPQ software is already at work:
Upon receiving a call from a company looking to purchase 10 trucks for its fleet, you leverage CPQ software to guide your customer through available options with precise, up-to-date information. Since you have all product variations and customization choices, you might even be able to upsell to configurations they didn’t know they wanted.
Your CPQ software knows all the rules for configuring your trucks, eliminating guesswork. As they select options, the price is updated in real-time while an interactive 3D model of the product reflects changes, showing the customer how their selections will look to ensure it meets their requirements.
Upon completing the configuration, you effortlessly generate a quote at the click of a button and promptly email it to the customer. Discounting rules allow sales reps to offer discounts within boundaries established by management, or they can forward more competitive pricing terms to managers for approval. You can do all of this in hours or even minutes.
Once the order is secured, the order details, including detailed BOMs, can be sent automatically from your CPQ to integrated manufacturing applications, like ERPs and CRMs, without any data re-entry or manual intervention.
Customers get a more satisfying and engaging experience when buying from a company that uses CPQ software. Since CPQ software makes the process faster and easier, customers don’t have to wait for a quote. They will feel more confident and positive about the buying process, so they can commit to their order right away and get it into production quickly.
CPQ software can also be a problem-solving tool for your clients. Since each customization option is there to explore already, they may find another, more apt solution to their needs that they weren’t aware of before.
Using 3D and 2D visualizations lets you show the customer what their finished product will look like. Some manufacturers even use CAD automation to provide fully configured drawings and 3D renderings of products. When customers can see their desires reflected through visualizations throughout quoting, they’re more likely to buy and order from you in the future.
After implementing CPQ software, you’ll see a new level of speed and efficiency throughout the quoting process. Your reps can quickly close sales and move on to the next order, improving productivity. You can also bring new sales team members on board faster without extensive training.
Along with an increase in sales volume, you will see larger orders come through more regularly. With a full understanding of costs and margins for each component, CPQ software helps your sales team upgrade and upsell orders. The whole experience is more streamlined, leading to fewer errors and a better outcome for the customer.
Consolidating all product information into a single source of knowledge helps you better organize and store data. By formalizing the rules for configuration with CPQ software, you can enable your dealers and distributors to more freely quote products, knowing their configurations and prices will be accurate. You can even give your customers direct access by allowing them to configure products and make purchases without needing to go through a salesperson.
For manufacturers accustomed to manual processes, CPQ software stands as a crucial upgrade. With quoting software, you can quickly generate accurate prices and quotes, without spending days getting feedback from different departments. You can eliminate mistakes that might have cost you a sale in the past.
But the biggest incentive to adopt an automated CPQ solution is its capacity to accelerate, simplify, and enhance the efficiency of your sales process, ultimately fostering business growth. Revalize is a versatile software company that offers various CPQ solutions tailored to the needs of custom manufacturers in virtually every industry and niche.
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Chances are you’ve heard about CPQ (Configure, Price, Quote) solutions as a game-changer for many manufacturers. But some organizations are still on the fence about whether they need to make the switch.