In manufacturing and engineering industries the sales process has its challenges. Intense competition and slim margins are the obvious ones. In other industries, active product marketing and lead generation are focus points. In manufacturing the Request for Proposal (RFQ) or Request for Information (RFI) itself is mission-critical.
In manufacturing and engineering industries many sales reps are forced to deal with outdated custom solutions that have been developed during the outsourcing wave of the late '90s. Or they are left with Excel, Word, and Outlook for performing the crucial process of configuration, pricing, and quoting (CPQ).
Here are the 5 biggest risks for sales reps when delivering an accurate and profitable quote to the customer through traditional means.
Dealing with the same challenges? Download our new guide, "Accelerate Manufacturing Sales" to find out how to overcome your bottlenecks!
Risk 1. Are you actively managing your accounts and forecasting revenue?
All sales businesses are centered around the customer's situation and needs. Manufacturing and engineering businesses often aim to retain long-term customer relations but have to accept a high dependency at the same time. These key accounts will regularly need RFQs or RFIs but expect fast delivery of feasible quotes with the best prices. Still, many sales reps in this industry store customer accounts and contact data in Outlook or even on paper while making account plans and managing opportunities in Excel.
Managing important sales data in an analog or disconnected way makes active account management and opportunity prioritization close to impossible. For top management, this outdated approach offers no way of conducting a real-time sales pipeline review and revenue planning.
Risk 2. Finding the customer solution in a collaboration haystack
Configuring a manufacturing product or engineering-to-order solution is a complex task that requires a significant amount of collaboration. In order to create an accurate and feasible quotation, data input has to be delivered by, for example, engineering and purchasing departments. Some manufacturers may even require further input from the product, material, or manufacturing process experts within the company. For a sales rep in this industry, this process is extremely time-consuming. Accessing the quote-relevant data and managing the entire workflow involves; emails, calls, meetings, or production site visits. All this often happens across different locations or even countries.
Delays factors in the delivery and compilation of this collaborative quote data are obvious. That is why cycle times are increasing and customers often end up waiting several weeks for one quote. The risk of configuration errors in such a challenging collaboration setup remains high.
Risk 3. Cost calculations and pricing – mission-critical for slim margin businesses
In industries with slim margins and high competition, cost calculation and pricing are mission-critical parts of the sales process. Discounts and financial proposals need to be accurate in order to determine the profitability of the quote. Costing knowledge and pricing data are spread across various databases, or not accessible at all. Calculating costs in a bill of materials (BOM) with hundreds of items in Excel is challenging even for an experienced sales rep and poses the risk of pricing inaccuracy.
Inaccurate costing or pricing can put margins at risk, and is one of the highest risk factors in this industry.
Risk 4. Quote non-approvals and customer change requests drive the wheel of errors
The first version of a manufacturing quote is rarely the last. And sales reps are not exempted from this rule of thumb. Even worse, any necessary quote revision--due to company internal pricing, product, or feasibility non-approvals - restarts an inefficient and error-prone configure-price-collaboration process.
Customer change requests or modifications on the product in the middle of the quotation process are not unusual in this business and lead to the repetition of an error-prone process.
Risk 5. Do you Ctrl+C and Ctrl+V your sales proposal?
After overcoming all configuration, collaboration, costing, pricing, and even approval obstacles, the sales rep has to compile all specifications, configuration details, and prices into a proposal document. Usually, this would be done with the help of Word or Excel templates while, 1. Trying to match corporate standards and 2. Aiming to deliver all customer requests in a quotation. In manufacturing and engineering, this document may be very comprehensive and contains components such as:
- A cover page with cover letter,
- Financial proposal & cost break-down,
- Product details, images, and technical drawings
- Project charter,
- Service agreements,
- Terms & conditions
- ...and much more.
Personalizing all these single documents and copy-pasting the relevant proposal data is an error-prone and extensive process.
The inefficiency in compiling RFQ components manually is time-consuming and can be automated easily. The risk of bringing in new copy-paste errors is high and the usage of non-centralized and outdated data can have a significant impact on your margins.
Solution for mitigating these risks in the quotation process
For sales reps, the above-mentioned obstacles during the process of configuration, pricing, and quoting might be troublesome. But from a management perspective, these are substantial factors that can put your entire business at risk.
Manufacturing and engineering businesses have a high dependency on the customer. Only a quote-centric approach can help to mitigate these risks. Business owners should analyze their risks carefully and find a digital sales solution that helps to mitigate the most common sales risks.
A Digital Sales Platform built for manufacturers embeds such a CPQ risk-mitigating solution. Furthermore, it provides analytic insights and transparency into the sales process for revenue prediction and profitability optimization.
Remove process bottlenecks and speed up your sales efforts with digital. Download our guide, "Accelerate Manufacturing Sales" to find out how!