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Posts tagged ‘CPQ’

How To Make Complex CPQ Selling Simple With Visual Configurators

Bottom Line: Realizing visual configurators’ full potential starts by enabling engineering, production, and sales to become real-time collaborators in creating new products.

2D, 3D, Augmented Reality (AR), Mixed Reality (MR), and Virtual Reality (VR) visual configurators are proliferating across the Configure, Price, and Quote (CPQ) landscape today. Manufacturing marketing teams say they are the most effective lead generation technology they have, responsible for 40%+ growth in Marketing Qualified Leads (MQLs) this year alone. Sales VPs and Chief Revenue Officers (CROs) are seeing from 9% to 30% improvements in deal close rates and over 90% increases in quote accuracy. Visual configurators deliver shock-and-awe to prospects and drive more leads and deals.

Product Models Need To Scale, Driving Greater Collaboration

The good test of any product configurator is whether it can scale from assemble-to-order (ATO) to Engineer-To-Order (ETO) while enabling real-time collaboration between engineering, production, and sales. A given products’ many attributes and options defined by engineering in their PLM system need to be consistent with manufacturing’s work instructions and Bill of Materials (BOM) in their ERP system. And the visual configurator sales & marketing is using needs to reflect, in real-time, what engineering defined in PLM and what manufacturing’s ERP system can build. Product models serve as the master data that enables real-time collaboration between engineering, manufacturing, and sales.

Visual configurators need to push beyond the veneer of delivering shock-and-awe and enable real-time collaboration between PLM, ERP, and CRM & CPQ systems to achieve their full potential. Visual configuration providers need to pursue the goal of enabling engineering, manufacturing, and sales to be collaborators in creating accurate products and challenge themselves to deliver the following:

  • Improve sales performance while increasing margin per deal by providing only the options that are the most buildable at the lowest cost.
  • Eliminate disconnects between what engineering designed and what manufacturing can produce leads to more sales at higher gross margins.
  • Close product configuration gaps and improving fulfillment speed and product quality, creating greater customer loyalty and follow-on sales.
  • Automatically propagate product and design changes across all functional areas to accelerate new products to market while improving product quality.
  • Real-time fine-tuning of new product features to the model level that specific customers want becomes possible when engineering, manufacturing, and sales are collaborating in real-time.
  • Update work instructions and BOMs in real-time based on changes customers make in product visualizations.
  • Improve the balance of revenue across configurable products to sell higher-margin models based on real-time collaboration between PLM, ERP, CRM, and CPQ systems.
  • See in real-time how changes in product design, Bill of Materials (BOM), and delivery dates impact the financial performance of a manufacturer.

Predicting Visual Configuration’s Future

Shortening cycle times from product concept to completed product is the secret to succeeding with visual configuration. And when each manufacturing cycle time has its cadence or speed depending on how little or much a customer wants a product customized, visual configurators need to flex and deliver what customers want when.

Companies defining the future of visual configuration today include CDSDERWID, and SAP Visual Enterprise. These three companies are defining the future of visual configuration by enabling real-time integration between PLM, ERP, CRM, and CPQ systems.  I recently spoke with John Major, CEO of CDS to get his insights into what’s driving visual configuration’s success today.  “What we’re seeing in the marketplace now are two things. One is the clients want to understand how our visual configuration solution is going to fit into their change management as it’s rooted in PLM, because to any manufacturer, PLM reigns supreme,” he said. He continued, “The second is about staffing. When you’re a manufacturing company, and you buy a visual configurator toolkit that requires you to create your app, a few things happen. You need to staff up a software team to now run that toolkit and write development. So your long-term cost is fairly significant versus a company that can deliver an entire solution at scale.” 

CDS is partnering with eLogic, who is regarded as the leading system integration partner in CPQ and product configuration and is considered a global leader in delivering business solutions for manufacturers across SAP configuration technologies and Microsoft Dynamics 365, Power Platform & Azure. Together they are delivering next-generation visual configuration solutions for their shared clients. Examples of the work they are doing are shown below:

  • Real-time model updates keep engineering, manufacturing, and sales in sync. When customers are designing a new product in a CPQ session, the model is updated in real-time and saved, so engineering, manufacturing, and sales can see how their changes affect the product. An example of this is shown below:

  • When the product is configured “to scale,” 2D proposal drawings are automatically generated, and the product model is updated in real-time, making augmented reality visualizations possible. 3D models are also made available in a variety of CAD formats. Additionally, an Augmented Reality model is created that can be placed in any virtual environment. What’s noteworthy is that while the model’s appearance is changing, all relevant changes to the work instructions and BOM are happening in real-time using the SAP Visual Enterprise

  • When product models are the catalyst enabling real-time collaboration between engineering, manufacturing, and sales, selling into the aftermarket becomes profitable. Aftermarket selling has a complexity all its own. Taking on the challenge of shortening cycle times from product concept to completed products in the market is what’s needed today. The example below shows a piece of equipment selected in CPQ, then rotated, zoomed in, and exploded to see the internal components. Internal parts can now be selected, quoted, ordered and delivered for replacement.

Conclusion

Visual configurators are capable of so much more than they are delivering today. It’s time to graduate beyond the shock-and-awe stage, which has been very successful in driving leads, generating MQLs, and closing deals. It’s time to get down to the hard work of making all those impressive models buildable at scale and profitable. And that comes by doubling down efforts at shortening cycle times from product concept to completed product. That’s the true north of this market and the secret to succeeding. Getting engineering, manufacturing, and sales collaborating using product models as a single source of truth is the best place to start.

How To Improve Your CPQ Pricing Strategies

Manufacturers can get more than their fair share of channel sales and margins by improving price management for every dealer, distributor, and reseller they sell-through. It’s possible to expand earnings by 50% on slight increases in volume when pricing is consistent channel-wide. McKinsey’s latest research on the topic, Pricing: Distributors’ Most Powerful Value-Creation Lever, shows how the highest performing distributors use pricing to create value. For manufacturers competing for more sales through distributors, they share with competitors, improving their channel partners’ margins is the single best strategy to win more sales and long-term loyalty.

  • A 1% price increase yields a 22% increase in Earnings before Interest & Taxes (EBITDA) margins for distribution-based businesses.
  • It would take a 7.5% reduction in fixed costs to achieve the same 22% increase in EBITDA that a 1% increase in pricing achieves.
  • A distribution-based business would need to increase volume by 5.9% while holding operating expenses flat to achieve the same impact as a 1% price increase.
  • Channel partners are more loyal to margin than manufacturers, which is why price management needs urgent attention on CPQ roadmaps.

CPQ Strategies Need To Deliver More Margin Back To The Channel

The typical manufacturer who has over $100M in sales generates 40% or more of their sales through indirect channels. The channel partners they recruit and sell through are also reselling 12 other competitive products on average. Which factors most influence a distributor or channel partner’s decision to steer a sale to one manufacturer versus another?  The following are the steps manufacturers can take now to improve price management and drive more channel sales:

  • Upgrade the pricing module in CPQ to deliver more than configurable price lists to include pricing waterfalls, automated approval levels for pricing requests, and discounts. Distributors drive more deals to manufacturers whose CPQ systems are designed to give them greater freedom in tailoring pricing to every customer and selling situation they have. Automating approval levels using machine learning-based supervised algorithms that serve as pricing guardrails on every quote a channel partner creates is proving effective at delivering a 1% price increase which drives margin back to resellers. The more a manufacturer can make margins flow back to its channel partners, the faster the channel partners can grow. The following graphic from McKinsey’s latest pricing research illustrates why.

  • Distributors will drive more deals to manufacturers who automate pricing approvals, guiding their sales teams to the largest and most profitable deals first. One of the best ways to compete and win more deals through channel partners is to achieve the ambitious goal of delivering pricing approval within seconds on a 24/7 basis. Pricing needs to provide guardrails that guide channel sales reps to the largest, most profitable, and most ready-to-buy new and aftermarket sales opportunities. Manufacturers capturing more channel sales are relying on machine learning-based pricing systems that optimize price approvals while recommending only those new and aftermarket deals that will drive a 1% or greater price increase. Machine learning is making solid contributions to automating pricing approvals. It’s proving most effective when it is balanced with the flexibility of responding to subjective competitive situations where pricing on specific products need discounts to win deals in aggregate. The following workflows from Deloitte explain how this is being accomplished today:

  • Helping distributors solve sales compensation problems by improving price management drives more deals in the short-term and keep distributors in business long-term. Distributors start out building their sales comp plans on volume and growth alone. The problem is comp plans reward revenue growth at the expense of profits. That’s making it harder every year for distributors to stay in business. Manufacturers delivering new pricing management and optimization apps in their CPQ platforms need to provide real-time guidance on margin potential by the deal, pricing waterfall logic that includes margins, contract pricing overrides for margins and more if they are going to help their distributors stay in business.

Conclusion – Pricing Is the Engine Powering CPQ’s Market Growth Today

Manufacturers who excel at growing indirect product and services revenue through channels realize that every one of their channel partners is more loyal to pricing and margins than any specific vendor they resell. Providing a CPQ application or platform they can personalize, and automate workflows is just the beginning. The bottom line is that manufacturers need to put more intensity into improving pricing today if they’re going to hold onto the distributors they have and attract new ones.

Pricing is the primary catalyst driving the CPQ market’s growth as well. According to Gartner, the CPQ grew 36% in 2017, reaching $1.084B with the majority of growth attributable to cloud-based solutions. It’s no wonder CPQ is considered one of the hottest CRM technologies for the foreseeable future, projected to grow at a 25% Compound Annual Growth Rate (CAGR) through 2020. Supervised machine learning algorithms capable of providing guardrails in real-time for every potential deal a reseller sales representative has is what’s needed to protect a distributor’s margins. Winning more deals with channel partners starts by respecting how vital margins are to their success and improving pricing management as part of a broader CPQ strategy that delivers results.

Sources:

Configure, Price, and Quote (CPQ) Capabilities: Why the right CPQ capability is key to transitioning to a flexible consumption model, 8 pp., PDF, no opt-in, Deloitte, 2019.

Pricing: Distributors’ Most Powerful Value-Creation Lever, McKinsey & Company, September 2019.

What Needs To Be On Your CPQ Channel Roadmap In 2019

Bottom Line:  Adding new features to your CPQ channel selling platform directly benefits your resellers and channel partners, driving greater revenue, channel loyalty, and expansion into new markets.

Personalization Is Key To CPQ Succeeding In Channels

Sustaining and strengthening relationships across all indirect selling channels succeeds when dealers, multi-tier distributors, resellers, intermediaries, and service providers each can personalize the CPQ applications and platforms they use. Larger dealers, distributors, and resellers are adept at personalizing CPQ selling portals by the various roles in their organization. Personalization combined with a highly intuitive, configurable interface improves CPQ applications’ ease of use, enabling channel partners to get more done. The more intuitive and easy a CPQ application is to use, the more channel partners rely on it to place orders. When distributors are representing, on average, 12 different manufacturers,  the one with the most intuitive, easily used CPQ system often gets the majority of sales.

Another aspect of personalization is defining levels of resellers. When many organizations first launch their CPQ channel selling strategies, one of the first requests they have is to organize all channel partners into performance categories. Differentiating channel partners on sales performance, customer satisfaction, and aftermarket revenue then gamifying how every one of them can move up a level is proving to be very effective at increasing channel sales. Competing with one another to be the top reseller for the manufacturing and service companies lifts an entire channel network to higher performance.

Every dealer, multi-tier distributor, reseller, intermediary, and service provider also has a unique way of selling that works best for their business. Another must-have feature on any CPQ channel roadmap is greater workflow flexibility to support increasingly complex, IoT- and AI-enabled configurable products. Smart, connected products are the future of manufacturing and channel sales. Capgemini estimates that the size of the connected products market will be $519B to $685B by 2020. Workflows like the one shown below of an internal sales rep using a multichannel CPQ system to order a customized product are due for a refresh to support even greater flexibility for more channels and greater product options.


Most Valuable Features For A CPQ Channel Roadmap In 2019

There’s a direct link between how effective a CPQ platform is across multi-tier distribution networks and the productivity of sales teams using them. 83% of sales teams are using CPQ apps today based on Accenture Interactive’s recent study, Empowering Your Sales Force: It’s Not Just Automation, It’s Personal (8 pp., PDF, no opt-in). There’s ample evidence that the more effective a CPQ platform is at equipping dealers, multi-tier distributors, resellers, intermediaries, and service providers, the greater the sales they achieve. The 2019 B2B Buyers Survey Report, by DemandGen in collaboration with DemandBase, found that B2B buyers are more likely to purchase from sales representatives who demonstrate a stronger knowledge of the solution area and the business landscape (65%) compared to competitors. B2B buyers also give high praise for sales teams who can provide quotes quickly and respond to their inquiries promptly (63%), in addition to providing higher-quality content (61%). Each of these benefits is derived from a CPQ platform that can scale across every phase of the selling lifecycle.

The following are the key features needed on CPQ channel roadmaps in 2019 to stay competitive and scale sales and revenue on pace with market growth:

  • Greater personalization for each type of partner portal supported by real-time integration to CRM and ERP systems, designed to scale for sales team turnover across multi-tier distribution networks. Channel partners’ sales teams tend to churn quickly, and it’s best to design in intuitive, easily configured portals by sales role to help new hires get up to speed fast. Channel sales associates are typically the fastest-churning area of any selling business. With greater personalization comes the need for greater integration to provide the data needed to enable partner portals to have a greater depth of functionality. The following graphic from Deloitte’s recent study, Configure, Price, and Quote (CPQ) Capabilities illustrates this point:

  • Support for multi-tier pricing, price management, price optimization, price enforcement, and special workflows, including Special Pricing Requests (SPR). Baseline CPQ platforms support price management and have successfully transitioned multi-tier distribution networks off of Microsoft Excel spreadsheets to a single pricing model that scales across all products and channels. Consider adopting advanced pricing logic to support SPRs so sales operations teams don’t have to do this process manually. In manufacturers who have transitioned from manual to automated SPR approvals, average deal sizes have increased over 60%, and productivity jumped over 76% according to a recent Gartner survey.
  • Augment advanced product configuration tools by making them more intuitive and easier to use to sell the more advanced products in your catalog. It’s time to push the boundaries of CPQ channel selling systems to sell more complex products and drive greater revenue and margins. Forward-thinking manufacturers are taking a virtual design and 3D-based design approach to accomplish this. Enabling channel partners to take larger orders for more complex products is paying off.
  • Upgrade guided selling strategies to be more than catalog-based selection systems, mining customer data using machine learning to see which products they have the greatest propensity to buy when. It’s time to migrate off of the guided selling systems that are selecting products from catalogs that may deliver the best gross margins or have a traditionally high attach rate with the product the customer is buying. Machine learning is making it possible to provide greater accuracy and precision to recommendations than ever before.
  • Improve the usability of sales promotions, rebates, and most importantly, Market Development Funds (MDF). It’s amazing how much time manufacturers are spending manually handling MDF claims today. It’s time to automate this area of the CPQ channel roadmap and save thousands of hours and dollars a year while enabling resellers to get reimbursed faster or get the funds they need to grow their businesses.
  • Contract management is a must-have for CPQ channel roadmaps today. Integrating a cloud-based contract management system into a CPQ platform is vital for taking one more step towards an end-to-end quote-to-cash workflow being in place. Real-time integration to contract management can save days of waiting for contract approvals, all leading to more closed deals and faster, more lucrative sales cycles.
  • Manufacturers can realize greater revenue potential through their channels by combining machine learning insights to find those aftermarket customers most ready to buy while accelerating sales closing cycles with CPQ. Manufacturers want to make sure they are getting their fair share of the aftermarket. Using a machine learning-based application, they can help their resellers increase average deal sizes by knowing which products and services to offer when. They’ll also know when to present upsell and cross-sell offers into an account at a specific point in time when they will be most likely to lead to additional sales, all based on machine learning-based insights. Combining machine learning-based insights to guide resellers to the most valuable and highest probability customer accounts ready to buy with an intuitive CPQ system increases sales efficiency leading to higher revenues.

Conclusion

Now that the solutions exist for resellers to simplify CPQ selling strategies, it’s up to each manufacturer to decide how competitive they want their channel partner roadmap to be. Any given manufacturer’s quoting and configuration tools today are competing with 11 others on average for a reseller’s time, it is clear that roadmaps need a refresh to stay competitive. Suggested options include offering greater personalization, multi-tier pricing and a more thorough approach to price management, advanced product configuration support, revamped guided selling strategies and improved usability of sales promotions, rebates, and Market Development Funds (MDF). Manufacturers need to prioritize each of these features relative to their product- and revenue-specific goals by channel. A fascinating company who has deep expertise in designing, implementing, and scaling analytics, service, sales, IoT, and CPQ solutions for manufacturers is eLogic. The company’s mission is to enable manufacturers to achieve the highest value customer engagement and product & service lifecycle performance. eLogic is regarded as the leading system integration partner in CPQ and product configuration and is considered a global leader in delivering business solutions for manufacturers across SAP configuration technologies and Microsoft Dynamics 365, Power Platform & Azure.

CPQ Needs To Scale And Support Smarter, More Connected Products

  • For smart, connected product strategies to succeed they require a product lifecycle view of configurations, best attained by integrating PLM, CAD, CRM, and ERP systems.
  • Capgemini estimates that the size of the connected products market will be $519B to $685B by 2020.
  • In 2018, $985B will be spent on IoT-enabled smart consumer devices, soaring to $1.49B in 2020, attaining a 23.1% compound annual growth rate (CAGR) according to Statista.
  • Industrial manufacturers will spend on average $121M a year on smart, connected products according to Statista.

Succeeding with a smart, connected product strategy is requiring manufacturers to accelerate their IoT & software development expertise faster than they expected. By 2020, 50% of manufacturers will generate the majority of their revenues from smart, connected products according to Capgemini’s recent study. Manufacturers see 2019 as the breakout year for smart, connected products and the new revenue opportunities they provide.

Industrial Internet of Things (IIoT) platforms has the potential of providing a single, unified data model across an entire manufacturing operation, giving manufacturers a single unified view of product configurations across their lifecycles. Producing smart, connected products at scale also requires a system capable of presenting a unified view of configurations in the linguistics each department can understand. Engineering, production, marketing, sales, and service all need a unique view of product configurations to keep producing new products. Leaders in this field include Configit and their Configuration Lifecycle Management approach to CPQ and product configuration.

Please see McKinsey’s article IIoT platforms: The technology stack as a value driver in industrial equipment and machinery which explores how the Industrial Internet of things (IIoT) is redefining industrial equipment and machinery manufacturing. The following graphic from the McKinsey explains why smart, connected product strategies are accelerating across all industries. Please click on the graphic to expand it for easier reading.

CPQ Needs To Scale Further To Sell Smart, Connected Products

Smart, connected products are redefining the principles of product design, manufacturing, sales, marketing, and service. CPQ systems need to grow beyond their current limitations by capitalizing on these new principles while scaling to support new business models that are services and subscription-based.

The following are the key areas where CPQ systems are innovating today, making progress towards enabling the custom configuration of smart, connected products:

  • For smart, connected product strategies to succeed they require a product lifecycle view of configurations, best attained by integrating PLM, CAD, CRM, and ERP systems. Smart, connected product strategies require real-time integration between front-end and back-end systems to optimize production performance. And they also require advanced visualization that provides prospects with an accurate, 3D-rendered view that can be accurately translated to a Bill of Materials (BOM) and into production. The following graphic is based on conversations with Configit customers, illustrating how they are combining PLM, CAD, CRM and ERP systems to support smart, connected products related to automotive manufacturing. Please click on the graphic to expand it for easier reading.

  • CPQ and product configuration systems need to reflect the products they’re specifying are part of a broader ecosystem, not stand-alone. The essence of smart, connected products is their contributions to broader, more complex networks and ecosystems. CPQ systems need to flex and support much greater system interoperability of products than they do today. Additional design principles include designing in connected service options, evergreen or long-term focus on the product-as-a-platform and designed in support for entirely new pricing models.
  • Smart, connected products need CPQ systems to reduce physical complexity while scaling device intelligence through cross-sells, up-sells and upgrades. Minimizing the physical options to allow for greater scale and support for device intelligence-based ones are needed in CPQ systems today. For many CPQ providers, that’s going to require different data models and taxonomies of product definitions. Smart, connected products will be modified after purchase as well, evolving to customers’ unique requirements.
  • After-sales service for smart, connected products will redefine pricing and profit models for the better in 2019, and CPQ needs to keep up to make it happen. Giving products the ability to send back their usage rates and patterns, reliability and performance data along with their current condition opens up lucrative pricing and services models. CPQ applications need to be able to provide quotes for remote diagnostics, price breaks on subscriptions for sharing data, product-as-a-service and subscription-based options for additional services. Many CPQ systems will need to be updated to support entirely new services-driven business models manufacturers are quickly adopting today.

Which CRM Applications Matter Most In 2018

 

According to recent research by Gartner,

  • Marketing analytics continues to be hot for marketing leaders, who now see it as a key business requirement and a source of competitive differentiation
  • Artificial intelligence (AI) and predictive technologies are of high interest across all four CRM functional areas, and mobile remains in the top 10 in marketing, sales and customer service.
  • It’s in customer service where AI is receiving the highest investments in real use cases rather than proofs of concept (POCs) and experimentation.
  • Sales and customer service are the functional areas where machine learning and deep neural network (DNN) technology is advancing rapidly.

These and many other fascinating insights are from Gartner’s What’s Hot in CRM Applications in 2018 by Ed Thompson, Adam Sarner, Tad Travis, Guneet Bharaj, Sandy Shen and Olive Huang, published on August 14, 2018. Gartner clients can access the study here  (10 pp., PDF, client access reqd.).

Gartner continually tracks and analyzes the areas their clients have the most interest in and relies on that data to complete their yearly analysis of CRM’s hottest areas. Inquiry topics initiated by clients are an excellent leading indicator of relative interest and potential demand for specific technology solutions. Gartner organizes CRM technologies into the four category areas of Marketing, Sales, Customer Service, and Digital Commerce.

The following graphic from the report illustrates the top CRM applications priorities in Marketing, Sales, Customer Service, and Digital Commerce.

Key insights from the study include the following:

  • Marketing analytics continues to be hot for marketing leaders, who now see it as a key business requirement and a source of competitive differentiation. In my opinion and based on discussions with CMOs, interest in marketing analytics is soaring as they are all looking to quantify their team’s contribution to lead generation, pipeline growth, and revenue. I see analytics- and data-driven clarity as the new normal. I believe that knowing how to quantify marketing contributions and performance requires CMOs and their teams to stay on top of the latest marketing, mobile marketing, and predictive customer analytics apps and technologies constantly. The metrics marketers choose today define who they will be tomorrow and in the future.
  • Artificial intelligence (AI) and predictive technologies are of high interest across all four CRM functional areas, and mobile remains in the top 10 in marketing, sales and customer service. It’s been my experience that AI and machine learning are revolutionizing selling by guiding sales cycles, optimizing pricing and enabling CPQ to define and deliver smart, connected products. I’m also seeing CMOs and their teams gain value from Salesforce Einstein and comparable intelligent agents that exemplify the future of AI-enabled selling. CMOs are saying that Einstein can scale across every phase of customer relationships. Based on my previous consulting in CPQ and pricing, it’s good to see decades-old core technologies underlying Price Optimization and Management are getting a much-needed refresh with state-of-the-art AI and machine learning algorithms, which is one of the factors driving their popularity today. Using Salesforce Einstein and comparable AI-powered apps I see sales teams get real-time guidance on the most profitable products to sell, the optimal price to charge, and which deal terms have the highest probability of closing deals. And across manufacturers on a global scale sales teams are now taking a strategic view of Configure, Price, Quote (CPQ) as encompassing integration to ERP, CRM, PLM, CAD and price optimization systems. I’ve seen global manufacturers take a strategic view of integration and grow far faster than competitors. In my opinion, CPQ is one of the core technologies forward-thinking manufacturers are relying on to launch their next generation of smart, connected products.
  • It’s in customer service where AI is receiving the highest investments in real use cases rather than proofs of concept (POCs) and experimentation. It’s fascinating to visit with CMOs and see the pilots and full production implementations of AI being used to streamline customer service. One CMO remarked how effective AI is at providing greater contextual intelligence and suggested recommendations to customers based on their previous buying and services histories. It’s interesting to watch how CMOs are attempting to integrate AI and its associated technologies including ChatBots to their contribution to Net Promoter Scores (NPS). Every senior management team running a marketing organization today has strong opinions on NPS. They all agree that greater insights gained from predictive analytics and AI will help to clarify the true value of NPS as it relates to Customer Lifetime Value (CLV) and other key metrics of customer profitability.
  • Sales and customer service are the functional areas where machine learning and deep neural network (DNN) technology is advancing rapidly.  It’s my observation that machine learning’s potential to revolutionize sales is still nascent with many high-growth use cases completely unexplored. In speaking with the Vice President of Sales for a medical products manufacturer recently, she said her biggest challenge is hiring sales representatives who will have longer than a 19-month tenure with the company, which is their average today.  Imagine, she said, knowing the ideal attributes and strengths of their top performers and using machine learning and AI to find the best possible new sales hires. She and I discussed the spectrum of companies taking on this challenge, with Eightfold being one of the leaders in applying AI and machine learning to talent management challenges.

Source: Gartner by Ed Thompson, Adam Sarner, Tad Travis, Guneet Bharaj,  Sandy Shen and Olive Huang, published on August 14, 2018.

Five Ways CPQ Is Revolutionizing Selling Today

CPQ, Salesforce CPQ, enosiX SAP to Salesforce Integration Configure-Price-Quote (CPQ) continues to be one of the hottest enterprise apps today, fueled by the relentless need all companies have to increase sales while delivering customized orders profitably and accurately. Here are a few of the many results CPQ strategies are delivering today:

  • Companies relying on CPQ are growing profit margins at a 57% greater rate year-over-year compared to non-adopters.
  • 89% improvement in turning Special Pricing Requests (SPRs) into sales by automating them using a cloud-based CPQ system.
  • 67% reduction in reworked orders at a leading specialty vehicle manufacturer due to quotes reflecting exactly what customers wanted to buy.
  • 23% improvement in upsell and cross-sell revenue by having the CPQ system intelligently recommend the optimal product or service that has the highest probability of purchase and best possible gross margin.
  • CPQ strategies excel when they are designed to reach challenging selling, pricing, revenue and operational performance goals versus automating existing selling workflows.

Another factor fueling CPQs’ rapid growth is how quickly results of a pilot can be measured and used for launching a successful company-wide launch.  Pilots often concentrate on quote creation time, quoting accuracy, sales cycle reduction, automating Special Pricing Requests (SPRs), up-sells and cross-sells, perfect order performance, margin improvements and best of all, winning new customers. These are the baseline metrics many companies use to measure their CPQ performance. Throughout 2017 these metrics across industries are accelerating. There is a revolution going on in selling today.

5 Ways CPQ Is Revolutionizing Selling Today

Cloud- and SaaS-based CPQ solutions are quicker to implement, easier to customize to customers’ requirements, and available 24/7 on any Internet-enabled device, anytime. Many are designed to integrate into Salesforce, further accelerating adoption seamlessly.  The following five factors are the primary catalysts revolutionizing selling today:

  1. Designing in excellent user experiences (UX) is the new normal for CPQ apps – CPQ vendors are competing with the quality of user experiences they deliver in 2017, moving beyond packing every feature possible into app releases. This is having a corresponding impact on adoption, increasing the number of sales representatives and entire teams who can get up and running fast with a new CPQ app. The net result is reduced sales cycles, growing pipelines, and more sales reps actively using CPQ apps to increase their selling effectiveness.
  2. Integrating with legacy CRM, ERP and pricing systems in real-time are using service-oriented frameworks gives sales teams what they need to close deals faster – Legacy CPQ systems in the past often had very precise field mappings to 3rd party legacy CRM, ERP and pricing systems. They were brittle and would break very easily, slowing down sales cycles and making sales reps resort to manually-based approaches from decades before. In 2017 there are service-oriented frameworks that make brittle, easily broken mappings thankfully an integration practice in the past. With a loosely coupled service framework, real-time integration between CRM and ERP systems can be quickly be implemented and sales teams can get out and close more deals. Leaders in the area include enosiX, who are enabling their customers’ sales forces to enter sales orders into SAP directly from Salesforce, saving valuable selling time and increasing order accuracy.
  3. Competing for deals using Artificial Intelligence (AI), machine learning and Intelligent Agents are force multipliers driving greater salesSalesforce’s Einstein is an example of the latest generation of AI applications that are enabling sales reps and teams to gain insights that weren’t available before. Combining customer data with these advanced predictive data analytics technologies yields insights into how selling strategies for different accounts can customize to specific prospect needs. Selling strategies are more effective and focused when AI, machine learning, and Intelligent Agents are designed in to guide quoting, pricing and product configuration in real-time.
  4. CPQ apps optimized for mobile devices are enabling sales reps to drastically reduce quote creation times, sales cycles and increase sales win rates – For many companies whose sales teams are in the field calling on accounts the majority of the time, mobile-based CPQ apps are how they get the majority of their work done. Salesforce’s Force.com is one of the leading platforms CPQ software companies are relying on to create mobile apps, further capitalizing on the already-established levels of familiarity sales teams have with the Salesforce platform.
  5. The vision many companies have of synchronizing multichannel and omnichannel selling as part of their CPQ strategies is now attainable – One of the greatest challenges of expanding sales channels is ensuring a consistently high-quality customer experience across each. With on-premise CPQ, CRM and ERP selling systems, this is very challenging as there are often multiple database systems supporting each. This is a breakout year for omnichannel selling as cloud-based CPQ systems and the platforms they are built on can securely scale across all selling channels a company chooses to launch. Being able to track which CPQ deals emanated from which marketing program, and which channels are the most effective in closing sales is now possible.

5 Ways Real-Time Mobile Apps Delight Customers And Streamline Manufacturing

  • 2017-mobile-apps-in-manufacturingProviding real-time responses 24/7 on any mobile device anywhere is the new normal in 2017.
  • 54% of B2B companies selling online report that their customers are using smartphones to research purchases, and 52% say that their customers are using smartphones to buy online
  • The majority of CEOs (86%) see mobility as essential to creating and sustaining a competitive advantage.
  • Industrial manufacturing CEOs prioritize mobility (73%), cybersecurity (72%) and data mining and analysis (70%) as their top three priorities for attaining competitive advantage.

PriceWaterhouse Coopers (PWC) annually surveys global CEOs to learn about their current and future priorities, plans and technology adoption trends. PwC’s 18th Annual Global CEO Survey (free, no opt-in) is based on interviews with 1,322 CEOs located in 77 countries. The survey provides valuable insights into the strategic direction enterprises are taking with technology investments.

The following graphic from the report illustrates the strategic importance CEOs are placing on mobile technologies:

Competing On Accuracy, Speed And Responsiveness Is How You Win Today

CEOs at the world’s leading industrial manufacturing companies share a common focus on how to continually improve the accuracy, speed, and responsiveness of their companies using mobile technologies. A recent study by research firm Forrester shows that 54% of B2B companies selling online report that their customers are using smartphones to research purchases, and 52% say that their customers are using smartphones to buy online.

Being ready to respond with complete quotes, pricing, order status, delivery dates, updated service information on a 24/7 basis on any device anywhere is the new normal. Amazon’s ability to take orders, process, ship and deliver them in some cases all within 24 hours is driving up expectations in B2B selling too.  And a key part of making sure you can compete in 2017 and beyond is by having an integrated mobile apps strategy that provides customers the information they need when they need it.

The following are five ways real-time mobile apps delight customers and streamline manufacturing:

  1. Enabling configure, price and quoting (CPQ) apps to provide real-time updates on any device, anywhere wins more deals and keeps customers sold on doing business with you. According to a recent Gartner study, the competitor in any deal who is the first to produce a quality quote will win the deal 70% of the time. Given the competitive intensity around delivering the first, highest quality quote possible, having mobile apps that are based on real-time Salesforce and SAP integration is a must-have. From the very first interaction with any new prospect to closing a sale, having mobile apps that deliver real-time information gained through CRM and ERP integration is key.
  1. Being able to answer “When will my order ship?” anytime, anywhere on any device, at any time is what it takes to win and keep customers today. It’s time to challenge the outdated assumption that customers only want to speak with you when your legacy systems are available. The best manufacturers are modeling Amazon today, providing real-time alerts on when orders are being prepared to ship, providing e-mail and text alerts and delivery times and shipping information. Mobile apps need to be used to extend past the boundaries of legacy systems that don’t meet the minimum expectations of customers today. The CEO of an electrical machine manufacturer told me that once he was able to launch mobile apps for his customers, there was a 76% reduction in order status calls to the enterprise sales teams and 13% increase in sales the first six months these apps were available.
  1. Getting in control of quality and being able to manage customer expectations and relationships to positive outcomes with accurate data. Quality, compliance, inbound inspection and quality assurance are applications that often are isolated from CRM, ERP and customer service systems. The lack of integration between these systems wastes valuable time in getting back to customers on how best to solve quality problems and address questions they may have. That’s why it’s so important to have compliance, product quality, and quality assurance data delivered on mobile apps in a context the customer can use. Having this data available over mobile apps, enabled for customers’ use via Salesforce integration, reduces problem escalations and provides greater accuracy. Enabling quality data on mobile apps also helps to unify operations and production, giving everyone on the shop floor visibility into quality levels of order and long-term, over product lines being produced. Making data and reporting available company-wide often requires integration to SAP ERP and legacy systems, with companies including enosiX emerging as market leaders.
  1. Reducing Field Service call cancellations and delays by accurately communicating parts and staffing requirements shows respect for your customers. There is nothing more frustrating from a customer’s perspective than waiting for a field service technician to show up, only to find they don’t have the necessary parts or are told the problem was completely different than the one that needs to be solved. By enabling Salesforce integration with field service apps and providing customers with real-time alerts to their mobile devices via an app, field service calls can lead to solved problems and higher customer satisfaction faster.
  1. Providing customers with real-time updates via mobile apps on delivery dates driven by supply chain conditions helps in managing expectations while giving production planners the information they need to meet demand. Manufacturers whose business models rely on rapid inventory turns, tight production schedules, and thin margins are the leading early adopters of mobile technologies for logistics and supply chain coordination. Enabling mobile apps to provide the latest updates on Available-To-Promise (ATP), Capable-To-Promise (CTP) requires SAP integration across the Salesforce platform. Being able to provide updates on how suppliers are potentially impacting their delivery dates on orders is invaluable in managing expectations over the long-term.

Top 10 Ways Integration Will Transform Manufacturing In 2017

SAP and CRM Integration critical to manfuacturing innovation

Integrating ERP, CRM, and legacy systems lead to greater manufacturing innovation, setting the foundation to move beyond business models that don’t stay in step with customers’ fast-changing needs. Bringing contextual intelligence into manufacturing that centers on customers’ unique, fast-changing requirements is a must-have to keep growing sales profitably. By integrating ERP, CRM, SCM, pricing and legacy systems together, manufacturers can provide customers what they want most, and that’s accurate, fast responses to their questions and perfect orders delivered.

Integration Powers Manufacturing Innovation

Enabling a faster pace of innovation in manufacturing starts by using systems and process integration as a growth catalyst to profitably grow.There is a myriad of ways integration will transform manufacturing in 2017, and the top 10 ways are presented below:

  1. Real-time visibility across selling, pricing, product, manufacturing and service improves the speed of customer response and makes planning easier. By integrating legacy SAP ERP systems with CRM, pricing, product catalog, Manufacturing Execution Systems (MES) and service, telling customers in real-time the status of their orders is possible. Having real-time data on manufacturing operations provides planners with the visibility they need to optimize production schedules, including fine-tuning Material Requirements Planning (MRP). By orchestrating these areas of manufacturing more efficiently, customer satisfaction increases, the potential of upselling and cross-sell improves and less order fulfillment errors turn into higher profits.
  1. Making analytics the fuel manufacturing needs to move faster, attaining time-to-market goals and exceeding customer expectations. One of the quickest ways manufacturers are going to use integration to fuel greater growth in 2017 is by using analytics to measure operations from the customer’s perspective first. From quality management to order fulfillment and meeting delivery dates, every manufacturer has the baseline data they need to begin a customer-driven analytics strategy today. Integration is the catalyst that is making this happen. Making quality a company-wide focus begins with real-time integration of quality management and broader IT systems. enosiX has taken a unique approach to real-time integration, streamlining quality inspections and inventory control for beverage equipment manufacturer Bunn.
  1. Improving new product success rates by integrating CRM, pricing, product catalog, service, and Product Lifecycle Management (PLM) systems are enabling manufacturers to create new product lines that drive new business models. For consumer electronics and high-tech products manufacturers serving B2C (business to consumer) and Business to Business (B2B), speed and time-to-market are a core part of their business models. Capitalizing on the speed of customers’ changing requirements is more important to stay ins type with than competitors, however. To do this, manufacturers capturing feedback from service and PLM systems and then putting it into context using CRM systems can innovate faster than competitors who track each other instead of customers.
  1. Configure-Price-Quote (CPQ) will continue to be one of the most effective strategies manufacturers can use for accelerating sales in 2017, made possible by the real-time integration between ERP, CRM, pricing and manufacturing systems. Winning new customers and closing deals often comes down to being faster than competitors at delivering accurate, complete quotes and proposals. By integrating CRM, ERP, and pricing systems manufacturers can trim days and in some cases weeks and months off of how long it takes to produce a quote or proposal. CPQ will continue to accelerate in 2017, gaining momentum as more manufacturers move beyond their manually-based methods of quoting and opt for more integrated approaches to excelling at this vital selling activity.
  1. Industry 4.0’s many advantages including creating smart factories are dependent on the real-time integration of traditional IT and manufacturing systems increasing production speed and quality. Engraining greater contextual intelligence into every phase of manufacturing increases shop-floor visibility. It also makes planning more efficient and customer-driven. The key to revitalizing existing production centers and getting them started on the journey to becoming smart factories depends on the real-time integration of IT and manufacturing systems.
  1. Personalizing pricing strategies by customer persona and segment using real-time integration between CRM, pricing, accounting and finance systems to optimize profitability. Manufacturers doing this today also have propensity models that define which customers are most and least likely to accept up-sell and cross-sell offers. For many manufacturers, this level of pricing precision is possible today with greater systems integration. By having pricing strategies defined by persona and segment, measuring just how much speed and time-to-market matters to each is possible by measuring sales rates of new products and services.
  1. IT system security companywide improves with tighter real-time integration as long-standing legacy systems are updated to enable greater connectivity with newer systems. When manufacturers choose to pursue a more focused, urgent strategy fo systems integration to improve manufacturing performance, system security often improves companywide. It’s because longstanding legacy systems, often the most vulnerable to unauthorized use, get re-evaluated at the operating system and integration levels. The result is company-wide IT security improves when real-time integration is attained. For manufacturers where 70% or more of their materials and costs are from outside their owned production centers, this is more important in 2017 than ever before.
  1. Sensor data generated from the Internet of Things (IoT) combined with advanced analytics is transforming manufacturing today and will accelerate in 2017. Manufacturers with globally-based operations are piloting and using IoT strategies in daily operations today. A few are working with semiconductor manufacturers to design in their specific requirements at the chip level. Having real-time integration in place between ERP, CRM, pricing and services systems provides the scalable, secure foundation to build advanced analytics and IoT platforms that can scale over the long-term.
  1. Market leaders in manufacturing are designing in real-time integration to their connected products, enabling new sources of revenue. General Electric’s approach to monitoring jet engines in flight and providing real-time data to aircraft manufacturers including Boeing and airlines globally is an example of how integration is enabling entirely new business models. A global aerospace manufacturer who requested anonymity is working with integrated circuit developers Broadcom, Intel, and Qualcomm to create chipsets that can provide sensor-based data on an entire jet’s health in real-time anywhere in the world, anytime.
  1. Greater visibility and speed are coming to supply chains, enabling manufacturers the ability to take an accepted quote and turn it into build instructions in real-time. Automating the steps of taking a quote and turning it into a bill of materials, scheduling the best possible work teams, and orchestrating parts and materials all is becoming automated from quote approval. From a customer’s perspective, all they see is the approved quote and activity starting immediately to provide the products they ordered. By having this level fo real-time supply chain integration, speed becomes the new normal and customer expectations are met and often exceeded.

Five Strategies For Improving Customer Relationships Using Salesforce Integration

Bottom line: Defining salesforce integration strategies from the customers’ perspective that streamline every aspect of their relationship with your company drives greater revenue, earns trust and creates upsell and cross-sell opportunities in the future.

In the most competitive selling situations the company that has exceptional insights into what matters most to prospects and customers win the most deals. It’s not enough to just have a CRM system that is hard-wired into the core customer-facing processes of a business. To win more sales cycles companies are getting the most from every system they have available. From SAP Enterprise Resource Planning (ERP) systems to legacy pricing, operations, services, pricing, and CRM systems, companies winning more deals today can use Salesforce integration as a catalyst for driving more revenue.

Five Strategies For Improving Customer Relationships Using Salesforce Integration

  1. Making the Configure-Price-Quote (CPQ) process more efficient for customers and prospects by integrating ERP data into every quote. Today speed is a feature every system must have to stay competitive. Being able to create quotes that include the date the proposed configuration will ship and coordinate with services and programs delivery while providing order status from ERP systems is winning deals today. The tighter the ERP system integration, the better the quote accuracy in a CPQ system and the higher the chance of winning a sale. The following table shows the many benefits of having a well-integrated CPQ process.

business-impact-of-an-integrated-cpq-process

  1. Creating an omni-channel experience for customers needs to start with ERP, legacy, 3rd party and Salesforce integration that sets the foundation to exceed customer experiences daily. Providing a unified experience across every channel is challenging yet attainable, with market leaders using a series of integration strategies to provide this level of insight so customers’ expectations are exceeded in every single interaction. Only by integrating CRM systems including Salesforce with SAP ERP systems can any company hope to deliver a consistent, excellent series of experiences across all channels, all the time.
  1. Set up sales teams for exceptional performance with tightly integrated mobile apps that accelerate sales cycles. By using mobile apps that integrate SAP ERP systems, Salesforce CRM, and legacy systems into simplified, highly efficient workflows, sales teams can close more deals without having to come back to their offices.  Senior management teams can get more done using mobile apps that are an extension of their SAP ERP systems as well. Mobile apps are revolutionizing productivity thanks to SAP and Salesforce integration.
  1. Attaining high product quality levels that exceed customer expectations by providing every manufacturing department real-time visibility into quality inspections and inventory control. By integrating inbound inspection, inventory control, and quality management data across manufacturing, Bunn can deliver products that exceed customer expectations. Bunn’s product quality inspectors can perform and record results right at the machines being tested. The warehouse management system can scan and record inventory counts in real time to SAP. Maintaining high levels of product quality are what make Bunn’s beverage equipment machines a market standard globally today.
  1. Making new product launches more successful by having a tightly integrated approach to selling, producing and servicing new products that are in step with customers’ changing needs. From apparel to high-tech and financial services, customers are rapidly redefining which channels they choose to purchase through, how they choose to customize products, and which services they prefer to bundle in.  Integrating Salesforce, e-commerce and ERP systems into a single, unified workflow that is designed to provide customers exactly what they need is essential for enabling new product launches to succeed. With an integrated system across Salesforce, ERP, distribution and pricing systems, new product launches can scale globally quicker and still allow for personalization to customers’ unique preferences.  Salesforce integration is essential for successful new product introductions as the entire launch process gains speed, scale, and simplicity as a result.

Originally published on the enosiX blog, Five Strategies For Improving Customer Relationships Using Salesforce Integration. 

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