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Traditional manual quoting methods lead to errors, delays, and lost revenue opportunities. This is where Configure, Price, Quote (CPQ) solutions come into play.
This blog defines how CPQ streamlines your complex quote-to-order process to increase profits.
Understanding the Challenges of Manual Quoting
The world of manufacturing is a high-pressure environment. It involves complex solutions, fluctuating material costs, intricate pricing models and strict rules. Outdated tools and manual processes can quickly turn this situation into a production line for errors.
Before delving into the benefits of CPQ, it’s important to consider the challenges of relying on a manual quoting process.
- Time-Consuming: Manual and paper-driven processes bog down the sales process, adding days, even weeks to the journey. This makes customers feel neglected, which can cost you the opportunity.
- Error-Prone: Manufacturing products, particularly custom-built ones, require a dizzying array of configurable options. Human error is inevitable, and mistakes can lead to costly errors, production delays, and frustrated customers.
- Lack of Consistency: Manually quoting complex configurations while factoring in raw material costs, production intricacies and customer-specific discounts can result in inconsistent pricing. Making it difficult to maintain pricing integrity and margins.
- Limited Visibility: It's a challenge to track quote status, identify bottlenecks, and analyze performance without first compiling information from a variety of different systems. And there is often little visibility into partner or supplier activities.
How CPQ Revolutionizes Manufacturing Quoting
CPQ quoting software is designed to address these challenges. By automating and streamlining the complex quote-to-order process, CPQ transforms the way manufacturers operate, leading to increased efficiency, accuracy and profitability.
Here’s how CPQ can transform your large, complex manufacturing business.
Automated Product and Pricing Configuration
- Guided Selling: User-friendly interfaces guide large, complex module, pre-built and custom design configurations. This eliminates errors and saves significant time.
- Automated Pricing: CPQ automatically calculates the accurate price based on product configurations, discounts, and promotions. And includes estimated sales tax and pricing explanations.
- Real-time Validation: CPQ systems validate configurations against predefined rules, preventing errors. Built-in compliance and risk checks ensure quotes comply with regulations.
Efficient Quote Generation
- Quick Quote Generation: Generate professional-looking quotes in minutes, not hours. Create quote amendments in just a couple of minutes. Increase your capacity to grow sales.
- Template-Based Quoting: Create standardized quote templates, complete with layout and formatting. Easily customize for specific customer, product, or opportunity needs.
- Real-time Updates: Keep quotes up-to-date with the latest product and pricing information. Plus, the expertise needed to answer questions, tackle objections, and assuage doubts.
Improved Sales Team Productivity
- Empower Sales Teams: Sales reps far and wide, from the UK to the US, create accurate quotes themselves instead of waiting for the backend office to produce them.
- Increase Sales Opportunities: CPQ automatically identifies relevant upselling, cross-selling and bundling suggestions based on the buyer, past purchases, and the specific opportunity.
- Faster Approvals: Role-based, multi-step, and parallel workflow progresses through a series of predefined steps. This protects from under-quoting while keeping the opportunity moving forward.
- Greater Visibility: See the big picture quickly. Track performance, identify selling trends, and monitor partner and supplier pipelines and involvement.
- Smart Integrations: CRM integration automates manual tasks, reduces data duplication, and improves data accuracy. ERP integration accelerates accurate order processing and payments.
Reduced Costs
- Reduce Revisions: Avoid quoting based on incorrect facts and the time-consuming “back and forth” with experts. Eliminate expert dependencies and quote revisions that cause delays and frustrate customers.
- Reduce Manual Effort: Eliminate repetitive, manual data entry and document compilation. Free up sales to work on more opportunities.
- Reduce Training Costs: Onboard new staff faster. CPQ guides them through the process, eliminating the need to learn and remember complex configurations. This saves significant time for selling.
Enhanced Customer Experience
- Faster Response Time: Your organizational expertise is baked into your CPQ system. Instantly remove one of the biggest constraints to quoting - accessing expertise and information.
- Personalized Quoting: Quickly tailor quotes to individual customer needs and improve satisfaction and drive decision-making.
- Self-Service: Increase purchasing availability when and where your buyers choose to engage. CPQ includes secure customer and partner self-service portals that enforce your business rules.
Boost Revenue
- Increase Conversion Rate: CPQ software improves sales cycle efficiency and reduces operational costs. By eliminating manual processes, you can increase conversion rates for a lower cost per sale.
- Optimize Opportunities: CPQ automatically suggests variations and options sales reps may be unfamiliar with. Encourage the offering of additional services to increase potential deal size.
- Protect Profitability: By eliminating errors and over-discounting, CPQ prevents sales teams from making deals set below margins. Business rules act like pricing guardrails, protecting your profitability.
- Increase Capacity: Faster quoting means your team can handle more client opportunities. Even less experienced staff can manage intricate quotes, freeing up your top talent.
How to Select the Right CPQ Software
In this demanding field, closing deals requires more than just a product brochure, a spreadsheet, and a silver tongue. That is why you are considering CPQ to support your growth strategy.
Choosing the right CPQ solution is crucial for maximizing its benefits. By considering the following factors, you can determine the best option for your business.
- Complex Configuration: Ensure the CPQ can handle your large, complex product configurations and pricing models without losing performance. Look for bundling and Bill of Materials (BOM) generation, and the ability to adjust pricing and discounts on individual line items.
- Dynamic Pricing: Look for options like cost-plus, margin-based, and one-time pricing. Look for automated labor estimates, discounts, rebates, and regulations, as well as easy handling of multi-currency and adjustments.
- Integration Capabilities: Look for seamless integrations with a variety of industry leading solutions, such as Microsoft Dynamics 365, Salesforce, and Hubspot. Look for examples of ERP integration.
- Scalability: Look for a CPQ that will grow with you. Look for ease of management, including incorporating increased product complexity, volume, and user numbers without slowing down. And controlling user settings and administering rules and permissions without IT.
- User-Friendliness: An friendly interface is essential for adoption and productivity. Look for easy-to-use software that is easy to navigate and is designed to complete tasks with minimal effort or frustration.
Reduce Time to Quote by 50%
The right CPQ solution can mean the difference between conquering the manufacturing landscape or succumbing to its complexities.
Here’s what the industry research reports:
- 20% increase in sales productivity (Aberdeen Group)
- 40% reduction in errors (Forrester)
- 8.2 times higher margins (Constellation Research)
How does XaitCPQ help today's manufacturers reduce costs and boost profitability?
“XaitCPQ has enabled us to reduce the time taken to prepare accurate quotations by more than 50%, and virtually eliminate errors on entry of configured products to our ERP system.”
Paul Tilbury, Senior Project Manager at Eurotherm
“This mitigates any technical error on a configuration. We can rest assured that quotes include everything that should be included. So when it goes into production, they know that this configuration is correct, for that particular region or country’s specific requirements.”
Tony Serratore, Head of IT at Penlon
As the manufacturing industry continues to evolve, CPQ solutions will remain essential tools for businesses seeking to stay competitive. Don't let manual processes and inaccurate quotes hinder your manufacturing revenue.
