As part of Solutions Review’s contributing content series:a collection of articles written by our community of enterprise tech thought leaders—Bo Gyldenvang, CEO of Tacton, outlines eight ways CPQ software can help manufacturers improve their processes.
Custom manufacturing is becoming increasingly common in today’s competitive landscape as organizations develop products that meet their specific functions and needs. This will remain the case for the foreseeable future as the global custom manufacturing market is expected to continue to grow $1.35 trillion by 2031with an annual average growth rate of 4.6 percent.
With this happening, companies are increasingly turning to Configuration, Pricing, Quotation (CPQ) software, which allows them to customize products in a self-service manner while updating and, in many cases, taking into account prices in real time with possible shortcomings around the world. the supply chain. With that in mind, let’s take a look at eight of the key benefits that CPQ software offers when organizations want to create a competitive advantage through custom manufacturing.
1) It protects deal margin
A deal margin is the profit an organization makes on its products and services. Inaccurate quoting on the front cover reduces this margin. For example, suppose a customer receives an incorrect quote that does not include all the desired add-ons. In that case, the company faces a dilemma: either increase the quote and risk upsetting the customer, or absorb the loss. CPQ software prevents this with an advanced engine that takes into account all customer requests to provide accurate quotes that match individual needs (even as they change), ultimately preventing margin erosion.
2) Better sales efficiency
Forrester says the average quota attainment for B2B sales organizations is 47 percent, which means more than half of the sellers are missing their quota goals. The problem is often caused by a slow quoting process, which results in losing customers at the last minute. CPQ software addresses this by giving sales teams instant access to crucial data for accurate quotes. This also ensures consistency by making the same data accessible to all relevant staff members, essentially eliminating the common phrase, “Let me figure it out and get back to you.” The idea is to increase productivity and improve customer interactions by eliminating delays in the quoting process.
3) Improved order accuracy
Quotation errors result in customer dissatisfaction and possible brand abandonment – even two negative experiences can result 86 percent of customers change brands. While these mistakes are natural, they can also be financially damaging and cost a company significant costs. CPQ software is designed to eliminate human error from the quoting process to ensure consistent and reliable delivery of accurate quotes, improving customer satisfaction and maintaining brand reputation.
4) Improved customer satisfaction
Companies using CPQ software have experience with a 17 percent increase in lead conversion rates. This is achieved for several reasons, including more accurate (and faster) quoting, facilitating self-service purchases, a faster contracting process, 3D visualizations of orders, and a personalized ordering and service experience. Because so many consumers are willing to switch brands if their service expectations are not met, using CPQ software can play a big role in retaining customers and maximizing their satisfaction.
5) Streamlined citing
By using predefined rules and adjusting prices based on customer order choices, customers gain instant access to quotes, which ultimately helps with their purchasing decisions. This efficiency also increases overall quoting capacity, as sales teams can avoid meetings and manual data entry to determine quotes because the necessary data is readily available. CPQ software reduces the human effort required for fast and accurate quoting, freeing up staff to focus on nurturing relationships and attracting new business opportunities.
6) Faster staff training
Sales agents often leave organizations within two years of joining, while training takes time average 3.2 months. As a constraint-based engine, CPQ software automates the creation of complex customer solutions, reducing the need for extensive training. This provides an intuitive user experience and enables easy up- and cross-selling of unknown items by the sales team, ultimately improving efficiency and minimizing training needs.
7) A more consistent approach
CPQ software addresses challenges arising from sellers’ varying competencies by providing the data needed to adopt and implement best practices from the start – even for less experienced agents. Additionally, CPQ software ensures that all reps have equal access to the same data, promoting a unified approach and ensuring consistent practices across the team.
8) Accelerated ROI
While adopting new tools involves a significant investment, CPQ software makes up for it with the ability to quickly increase quoting capacity, increase conversion rates, reduce sales costs, and eliminate quoting errors. This has led to more companies investing in CPQ; 83 percent of sales professionals currently use some form of CPQ softwarewhich highlights its compelling benefits.
In manufacturing, the traditional process of creating quotes involves lengthy delays as sales teams work with different departments to determine feasibility and produce accurate quotes. Yet today’s modern customers demand and expect faster responses. CPQ software solves this by allowing sales teams to quickly generate and share sales quotes, significantly reducing wait times. Perhaps most importantly, companies that take full advantage of the benefits that CPQ software provides give themselves a much better chance of creating top-notch customer experiences, which helps with retention, brand reputation, and ultimately increased revenue.