CPQ Process

Augmented Reality and Virtual Reality Will Transform The CPQ Process

Sales activities are shifting from face-to-face to virtual engagements

Gartner predicts that by 2025, 80% of B2B sales interactions between suppliers and buyers will occur over digital channels, and Covid has rapidly accelerated the pace of change. 

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For manufacturing businesses built on in-person buyer-sales relationships, this trend poses a fundamental threat to the way they do business.

Until recently, sales reps stood side-by-side with buyers as they demonstrated products – they’re now doing everything remotely. Other sales reps have been replaced by eCommerce and different self-service scenarios favored by the growing number of digital-native buyers.

AR (augmented reality) and VR (virtual reality) hold the key to providing an immersive buying experience to buyers, wherever they’re situated. Manufacturers of complex, configurable products can create virtual showrooms and let buyers interact with products before they’ve even been manufactured.

How is Product Visualization Changing the Game?

Get a data-driven perspective on how visual selling is becoming the future norm for B2B companies.

It all sounds very futuristic, but this technology is right here right now. Manufacturers can incorporate AR and VR into their CPQ process to delight buyers from a distance and boost sales, engineering, and manufacturing efficiency.

Read on to find out:

  • What AR and VR actually mean, and the similarities and differences between the two technologies.
  • How the CPQ process operates and why a more “visual” CPQ process leads to better outcomes for buyers and sellers.
  • How manufacturers can incorporate AR and VR into their existing CPQ processes.
  • Three ingenious ways manufacturers can leverage newfound AR and VR capabilities.

What is the difference between AR and VR for manufacturers?

When we talk about digital transformation in manufacturing, we often lump AR and VR together. But we shouldn’t because they’re two very different technologies at different stages of maturity, requiring different hardware and levels of investment (VR costs at least twice as much.)

In the most basic terms: AR enhances the physical world, while VR creates a virtual world. AR overlays graphically generated objects onto reality as captured through the screen of a device, while VR provides a simulated reality that users can only experience by wearing a headset.

Both technologies have their advantages and disadvantages:

VR provides a more immersive and compelling experience. Once inside a virtual world, users can move and look around 360, interacting with products as if they were really there. It’s perfectly suited to exploring interior spaces, like the inside of a car or modular building.

The downside of VR: it’s a less mature technology, and there are still some inherent bugs to iron out. Plus, it’s expensive for both providers and consumers. To experience VR, a buyer has to own an expensive VR headset like the Oculus Quest 2, which costs around $500.

On the other hand, AR is a more mature technology and is ready to provide immediate benefits. Manufacturers of complex, configurable products can implement a robust visual CPQ solution like KBMax today and start leveraging AR within weeks.

What is the CPQ Process (and Visual CPQ Process)?

The CPQ process (which stands for configure, price, quote) is the process manufacturers go through to generate sales quotes for configurable products.

Traditionally, the CPQ process consisted of the following three stages:

Stage 1 Configure: The sales rep configures a product to a customer’s needs by picking out product options from a potentially massive catalog.

Stage 2 Price: The sales rep calculates a price for the customer based on the product options they select, taking into account customer history, pricing strategy, and other internal and external factors (demand, inventory, competitor’s prices, etc.)

Stage 3 Quote: The sales rep creates a quote, usually in Excel, and sends it to the customer.

CPQ software automates this three-stage CPQ process, lightening the load on sales reps while increasing quote speed and accuracy.

With CPQ software, the CPQ process looks like this:

Stage 1 Configure: The CPQ software guides the sales rep through the product configuration process. Reps answer questions about the customer, and the software configures the product. Product rules built into the software optimize every product for customer satisfaction, engineering efficiency, and profitability.

Stage 2 Price: The CPQ software automatically calculates prices according to predetermined pricing rules and logic (no mistakes.)

Stage 3 Quote: The CPQ software automatically generates a quote, proposal, or estimate (no more number-crunching and formatting for the sales rep.)

Visual CPQ is a little bit different…

A robust visual CPQ solution lets users configure the most complex products within a visual interface called a visual product configurator.

Product and pricing rules programmed into the back-end of the CPQ software govern how products can be configured. Together, they ensure that every configuration is optimized for customer satisfaction, engineering efficiency, and margin maximization.

The best visual product configurators enable end-customers to configure the most complex products themselves without any sales or engineering input. They can be embedded into an eCommerce site empowering buyers to configure, price, and quote their own products any time they want, through any device,

With KBMax Visual CPQ, the CPQ process looks like this (note the additional stage):

Stage 1 Configure: Sales reps or buyers are presented with a photorealistic 3D rendering of a configurable product on-screen. They can point and click to change colors, dimensions, and features, zooming in and out and rotating products 360 to inspect them from every angle.

Stage 2 Price: As users experiment with different product configuration options, prices are automatically calculated in real-time and displayed on-screen.

Stage 3 CAD and Design Automation: A range of technical documents are automatically generated, lightening the load on engineering and kickstarting production. These documents might include technical drawings, CAD files, CNC cut sheets, BOMs, or assembly guidance.

Stage 4 Quote: A sales quote is automatically generated and sent to the customer. Any relevant technical outputs are appended to the quote – whatever’s required to get the deal over the line.

How to incorporate AR and VR into the CPQ Process

AR and VR take visual CPQ to the next level. Rather than simply viewing products on-screen, buyers can interact with products inside a virtual showroom (VR) and position these products into real-world settings.

Instantly, AR and VR upgrade the configuration process from a tedious, error-prone tick-box exercise into a fully immersive buying experience. And with every product validated at the configuration stage, only viable products get sold and make their way downstream.

The benefits of AR and VR technologies are real and transformational. Faster sales cycles, enhanced decision-making, increased reach, and lower staff costs are just the start.

The benefits of incorporating AR and VR into the CPQ process include:

  1. Sales reps gain a deeper understanding of complex products and product options.
  2. Buyers connect with configurations on a deeper level, enhancing decision-making, reducing purchase anxiety, and improving the likelihood of conversion.
  3. Returns, refunds, and chargebacks are reduced as buyers know what their finished products will look like before they arrive.
  4. New sales and support hires can be brought up-to-speed more quickly and become product experts faster.
  5. Collaboration and exchange of information between sales, engineering, and manufacturing are improved – every department speaks the same visual language.
  6. Sales reps and buyers can “meet” in a virtual space – ideal for remote working scenarios.
  7. Buyers can self-serve from anywhere at any time.

But wait, there’s more…

Your ability to incorporate AR and VR into your CPQ process is totally dependent on the CPQ solution you use.

If it’s an AR/VR-ready solution like KBMax, then you’re good to go. If it’s a more traditional solution like Salesforce CPQ, you can easily integrate KBMax to leverage AR and VR functionality.

Once your company has AR and VR capabilities, you’ll be able to benefit from several additional use cases that will increase your ROI and can’t be ignored. Gartner points to three such use cases.

1. Team building and togetherness

Remote companies with employees dotted around the globe can get sellers into the same virtual room with AR and VR (beats Slack any day!)

2. Enhanced sales training

Using AR and VR, sales and support hires can undergo interactive product training via microlearning and retention testing. Machine learning can provide recommendations for ways to improve the training process.

3. Virtual tradeshows

AR and VR technologies are great for engaging buyers that are already interested in your products. But how do you pique the interest of prospects that don’t even know your products exist? Traditionally, this has been the role of the trade show.

Now, trade shows are going virtual. Instead of a booth, your company can have its own microsite where buyers interact with your products and learn by communicating with your chatbots.

To find out more about how you can easily integrate AR and VR into your CPQ process, reach out to KBMax and we’ll be happy to talk you through it.

https://kbmax.com/blog/author/djmonzyk
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