5 ways CPQ helps enterprises capitalize on B2B commerce changes
B2B commerce has rapidly shifted from focusing on customer expectations to growing business goals. These changes have led to big challenges but also created lucrative opportunities to thrive for those who shift strategies with these changes--which is why Configure, Price, and Quote (CPQ) software matters for enterprise businesses today. For forward-thinking organizations with complex products, complicated pricing, and manual processes, CPQ can be a meaningful change. In this blog post, we will examine the 5 biggest changes in B2B commerce and how a CPQ solution could help you solve them at your organization.
1. Solution Selling
The most common strategy for building an all-encompassing offering for B2B customers is solution selling. This is when a combination of multiple products and services are bundled to create an overarching solution. For example, this method is utilized within oil and gas organizations to provide an offering that includes all products and services required, from the design stage of a physical product to ongoing maintenance after installation. Enterprise technology is another business area that employs this model. Typical packages may include hardware, software, service, any reoccurring charges, multi-level configurations and much more based on the customer's expanding needs.
While solution selling has many positives, the challenges experienced when implementing this should not be overlooked. This includes:
- Combining subscription-based and one-time products on the same quote
- Multiple quotes can result in multiple invoices
- Customers don’t get an “easy to do business with” experience
To help simplify this process, a CPQ solution can manage different types of products and services on one quote. Line items like physical products, services, subscriptions, and different quotes that are typically disconnected can all live together within the system. A CPQ tool can also see beyond the current configuration. Product rules ensure certain solution attribute selections or account values are applied to all bundles on the quote, like design standards, voltage, and country of deployment. Additionally, one product or service can be managed with multiple price types to avoid SKU proliferation. This provides support for complex products and pricing rules.
2. Omnichannel Selling
Businesses looking to have a widespread impact may deploy omnichannel selling. This entails having multiple sales channels, such as direct sales, indirect sales, and self-service options. This selling method is often seen in agricultural equipment and software businesses among others.
For businesses that need extra assistance getting their products or services into the hands of their consumer, a middleman may be identified to bridge the gap. This means potentially losing control of your brand’s story and the possibility of a negative customer experience tied to your brand. These channels can include partner selling, self-service, and call centers.
With the help of a CPQ tool, customers can enjoy a more unified experience across different channels while businesses know the data is accurate. All channels tie back to the same system with one product master, pricing source, customer master, and rules engine. Customers will experience unification of buying as channels are connected, allowing them to start in one and finish in another. For self-service customers, the tool will allow you to guide their buying process, suggest configurations, add visualization, and make additional information available so they can make the proper selections.
3. Data Reliability
Making decisions about the future of your company is stressful enough. If your data is not accurate and up-to-date, it can make the decision process even more complicated. It’s imperative that key stakeholders have access to clean and well-processed data for decision-making.
While having clean data sounds like a simple enough task, it can be more time-consuming than expected when trying to aggregate all your information into one single source of truth. The data can include products, services, pricing, rules, account information, and templates. One of the biggest issues experienced is having data split across multiple systems or platforms with no way to communicate. Finally, data maintenance can be difficult and time-consuming.
One of the biggest wins in B2B commerce is often having a single source of truth. Certain CPQ tools run off a single data model, using the same database as Contract Lifecycle Management (CLM), billing, and order management tools. A single data platform lowers the risk of data inconsistency between quotes, contracts, and invoices. After coming to the single source of truth, it’s essential to continue to invest in data maintenance. This includes:
- Rules, pricing, naming conventions, etc.
- Similar bundle structures for consistency
- Clean up – detecting unused attributes, rules, etc.
- Applications should have tools in place to support easy maintenance
- Search capabilities (Rules, attributes, products)
- Debugging and rule-tracing capabilities
4. Large Orders
The ability to handle large quotes directly reflects your business’ performance, from how fast the quote is created, to how accurate it is. In construction and mining equipment, this is seen when there are more than 15,000 quote line items on 5% of their quotes. The Life Sciences industry may experience this with stacks of DNA Testing tube plates.
Quote sizes are increasing. When larger order requests come in, keeping performance on track can be extremely challenging. The biggest focus areas with these requests are often speed and accuracy. Both areas can suffer greatly without an easy way to quote the request. For some larger orders, this can include 1,000+ line items, and all line items must be processed for product rules, pricing, and many other attributes.
A CPQ tool helps process, measure, and manage large orders with ease to ensure your customer stays happy and informed throughout the quoting process. A solution built out for your business will allow you to configure, process, and price large orders in minutes with automated pricing rules and thousands of configurable attributes. The tool also allows multiple resources to work within the same quote simultaneously for greater collaboration.
With a CPQ tool, you will be able to:
- Process 10,000 line items in one quote
- Support multiple small bundles versus one large bundle
- Manage attributes for a larger number of products with more variations
5. Focus on Quote-to-cash
While the quote-to-cash process is essential to the health of a business, it is not the only opportunity for your business to grow and flourish. The quote-to-cash process covers the time from the first quote through collecting payment from the end customer.
Zeroing in on this one section of the larger process can give you tunnel vision. It’s important to pick up your head and look around at the other areas of the business that need to be supported, including your CRM, CPQ, Contract Lifecycle Management (CLM), and Enterprise resource planning (ERP) tools. You could also be creating more manual work and an inefficient sales cycle if these areas are not holistically connected.
At Conga, we view the revenue lifecycle as a wheel. Each spoke plays an integral role in the revenue lifecycle management process.
The biggest spokes of our wheel include:
- Propose and Quote – CPQ
- Negotiate and Execute – CRM
- Manage and Fulfill – Order Management, Billing
- Renew and Expand – CPQ, CLM
With that said, it’s essential to remember that CPQ should not be a standalone improvement. This tool helps you receive information CRM, ERP, PLM, and others. In turn, it also sends data to your ERP, OMS, and billing tools.
What if my CPQ tool isn’t working for me?
For those who already have a CPQ system in place, improvements and modifications can always be made to ensure the solution serves your current needs. We recommend bringing all the parties together in a workshop and design. On-going check-ins and maintenance are always recommended. As your business grows and changes, so do your CPQ needs. Try setting up regular biannual occurrences to meet with the team to hear what is working and what could be improved.
In today’s competitive world, having Conga CPQ can give you the competitive advantage in B2B commerce.