In part 1 of this blog series, we already indentified 5 of the key indicators that your manufacturing business will benefit from sales automation in the form of a Configure Price Quote (CPQ) software.
The first set of questions that CEOs and business managers should ask themselves were:
1. Does the complexity of product configurations affect your margins?
2. Is pricing and product information from your ERP always available to sales?
3. Do your sales teams make costing and pricing errors?
4. Are your approval regulations increasing the length of the sales cycle?
5. Are your margins eaten up by real production costs later?
Now let's discuss 5 more key pointers to discover if a digitalizing your manufacturing sales will help you protect margins, decrease cost of sales and secure deals faster than your competitors.
6. Is your Time to Quote (TTQ) longer than how fast your competitors can deliver accurate proposals?
Traditional low-tech methods of quoting with data retrieved from the back-end manually and contributed from many different parties like engineering, finance and finally sales, can itself be a lengthy process. Customers will always negotiate prices or change requirements during the sales process leading to further quote iterations. If all that bundles up with quote errors that make corrections necessary, one can easily run into sales cycles extending to weeks or even months. Manufacturers today need to employ a sales strategy to help them get ahead of the competition and move towards sales automation. A CPQ software increases productivity and can cut sales cycles and bring up to 40% reduction in Time-to-Quote (TTQ).
7. Can you introduce promotions or update pricing easily to your sales teams?
The ability to execute quickly in global and digital economies is a pillarstone to success that does not stop with manufacturing industries. The introduction of promotions, quick changes in pricing to match competitive offers or pricing uplifts for different countries must be automated in order to increase profitability and overtake competition. A CPQ that supports modelling within the system is greatly improving your business agility. Make sure that admin functions in your CPQ include easy modelling either via the user interface itself, via Excel modelling and fast uploads or that changes in LO-VC models are reflected in your CPQ.
8. How long does it take to launch a new product or product variation?
The Time to Market or Speed to Innovation in engineering or high-tech industries can dicate failure or success in today's rapidly changing global markets. Besides struggeling with commercialization resources needed to conduct market opportunity assessments, scale-up production or train employees, manufacturers' sales are notoriously slower to include new products into proposals. Sales team often limit themselves to the most well-known products when catalogs consist of hundreds of products already. When choosing a CPQ solution to automate this crucial part of the sales process, an in-depth analysis of the capabilities to add or modify product and configuration models needs to be performed. The ROI of product innovation will be closely linked to the time to market.
9. Is your business missing out on revenue from up- and cross sales?
In manufacturing industries up- and cross-selling does not equal your average "do you want fries with that?" opportunity. Missing out on low-hanging fruit in these industries means waving deal size increases of up to 30%. In order to actively engage in these sales tactics the specifics of product configurations and complexities in pricing need to digitalized into respective models. A modern CPQ will then be able to suggest smart up- and cross-sales to your sales team to inrease deal value and customer satisfaction at the same time. Be aware that a seamless connection and data exchange of your front- and backendis the basis for this revenue opportunity.
10. Are you loosing money due to errors during order creation in your ERP?
In MTO and ETO businesses BOMs usually extend to hundreds of items and materials or finished products are naturally not even existing in the ERP when the quote is created. What happens is that after a customer accepts a proposal those materials and products need to be created manually in the ERP, which is a large source of errors. With an advanced CPQ, integration to your backend should be that deep that products and materials can be created in ERP directly at the click of a button. This will be an important feature when it comes to not only sales productivity but order error considerations.
Did our article give you an idea of how a CPQ can help your manufacturing business improve on margin protection and revenue increase?
Watch our CPQ video to see a short demo of our software and find out how that looks like in practice.