When it comes to the competitive world of manufacturing sales, there are two factors that can affect your quote-to-close rates: speed of response, and accuracy of quote. Let us look at the first point, one that can plague many manufacturers with complex configurations and calculations.
Sales is a tough job. They need to chase prospects or handle accounts, pitch products and solutions against competitors, and then negotiate prices to make the right person sign on the dotted line. This process itself can take weeks and often months.
Now imagine that your product isn’t one single item, but is millions of tiny pieces that make up one product. Or that your offered product doesn't even exist yet and you have to figure out how to best serve your customer whilst keeping profitability in mind.
With less than a month until the end of the fiscal year, it is crucial for manufacturers to ensure that they end the year on a high note, mirroring industry expectations. This includes ensuring productivity levels stay high, overhead costs stay low, and that your allocated budget is used to maximise revenue in preparation for the next fiscal year.
Q4 is interesting from a budgeting point of view, especially, as frugal budgeting measures in the first 3 quarters of the year can lead to a surplus that needs to be used within Q4. This isn’t indicative of poor budgeting; in fact, it’s an opportunity for manufacturers to use that excess budget to lock down measures for the next year.
‘It takes too long to get a detailed RFQ! Your competitor quotes within hours instead of weeks.’
If this sounds familiar to you, then you need to re-evaluate your sales processes - urgently. Yes, a good product or attractive price for a manufacturing solution can help you close a quick deal. But ultimately customer satisfaction - even within the quoting phase - will define whether you retain them and get referral business. According to Zendesk, 62% of B2B customers purchased more after a good customer service experience, while 66% stopped buying after a bad customer service interaction. Which side would you want your business to be on?
Manufacturers today are facing several challenges around the revenue generating unit of their business: Sales. When your sales team’s job includes to calculate production costs, configure the right solution out of a million options and compile Bills of Material extending hundreds of posts, sales has transformed from a number into a data game.
CPQ - Configure Price Quote software - can be intensely beneficial to a sales team. The automation factor in quoting and proposal generation does not only save time, but helps cut down on costs of sales. Besides efficiency, a CPQ solution increases quote accuracy ensuring the profitability of quotes, especially for margin sensitive businesses. Certainly, these benefits are tremendous. But what really gives a CPQ the strength to transform the sales of a company is its ability to span front and back office.
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?
Businesses in manufacturing industries offering complex products or services to their customers often have 3 problems in common:
- The sales process is lengthy
- The complexity of the products or solutions offered, extends to the sales process itself
- Price calculations are difficult but require 100% accuracy due to slim margins
In the manufacturing sector, an abundance of challenges are constantly on the horizon and forcing businesses to find solutions. No matter the country or the different stages of the business journey, manufacturing firms share almost identical pain points and most importantly, the need to retain their revenue. What are these pain points you may wonder and how can you alleviate them? I could list them all out for you but let’s stick to three.
Singapore Economic Development Board (EDB) recently released news regarding the Business Expectations of the Manufacturing Sector. Whilst these are generally on the positive end, we want to give you insights into how manufacturing businesses can amplify these effects via digitalizing their sales operations.