Utilizing Configure-Price-Quote Technologies to Satisfy Diverse Customer Needs
By Dan Johnson
Configure-Price-Quote (CPQ) software has revolutionized how companies can develop and implement pricing strategies to sell more products, more profitably. If you’re not familiar with CPQ, it essentially enables manufacturers to streamline production processes around prices determined by market conditions, product demand, and customized customer preferences.
Configure-Price-Quote solutions, in conjunction with ERP systems, can also help companies look at the market environment and figure out when a certain discount or special pricing may be appropriate based on product features so the manufacturer can successfully balance maintaining (or gaining) marketshare with pricing to make a profit.
CPQ software typically features cloud-based hosting, interfaces for price sheets, as well as data management, analytics, and storage. Because modern manufacturing is so data-driven, robust analytics are a key element of any CPQ/ERP solution. Analytics help manufacturers not only set current prices for custom-configured products, but project future demand and price quotes as well. As configure-price-quote software becomes more common in enterprise resource planning, a variety of alternatives will present companies with different options for handling the important process of setting and resetting prices.
So how can configure-price-quote help you satisfy diverse customer demands and sell more custom-configured products? Here are six ways:
1. CPQ technology can help quickly deliver detailed product/price information based on customer preferences
To accommodate different customers' needs, you can provide multiple ways to engage with your products. For example, offer a flexible product catalog for an existing customer, guided product selection for a novice, and a “my favorites” function for a frequent buyer. This increases order speed and efficiency, and helps your customers make good choices.
2. Enables visual confirmation of orders
Sometimes a static image is all it takes, but for more complex products, an engineering drawing helps seal the deal. 2D or 3D image functionality can generate high-level models and quote drawings to support customer collaboration during the configuration and sales process. By rotating and manipulating a product that looks just as it will when engineered, a customer becomes more engaged with the order and your company’s ordering process. And, the more orders you and your channels sell, the more revenue you generate.
3. Generates accurate price quotes
Providing the correct price often proves the greatest challenge, but if you can’t give an exact, accurate figure during the quoting process, your customers cannot effectively manage their profit margins. By implementing a rules-based solution that captures detailed engineering specifications and the cost of each change to an order, you can quickly generate a detailed quote with a price that stands from decision to delivery. Providing accurate cost information can also help your customers deliver winning quotes to their own customers at a margin that works for them.
4. Helps create winning bid proposals
An Aberdeen Group report notes that CPQ deployments inspire 45% more efficiency at responding to RFPs. By implementing an automated documentation solution that’s integrated with your CRM, ERP, CAD, and other systems, you can deliver personalized, compelling quotes that get quick approvals.
5. Provides shorter order-to-delivery lead times
A make-to-order or engineer-to-order product that arrives quickly and on-schedule is a key component for satisfying customer needs. Automating the order-to-delivery process with a CPQ solution helps ensure fast production without mistakes. Not only does a manual process take longer, but it also allows more room for errors—and the delays and costs that come with them.
6. CPQ helps keeps customers happy after the sale
By proactively reminding your customers of service checks and maintaining a user-friendly portal to access past orders, you can handle maintenance, repair, and replacement issues as well as you do product manufacturing. If you make reordering as convenient as ordering your configured products, you’ll be rewarded with repeat business.
CPQ helps put the customer in customer-focused manufacturing which can provide an undeniable competitive advantage. However, there is risk involved, too. If customization gets out of hand, it can drive margins down, destroying profitability. Fortunately, modern ERP solutions working hand-in-hand with CPQ can help optimize and streamline the manufacturing process to support customization, enabling companies to keep customers happy and their margins intact.