Harnessing Fourth Industrial Revolution Technologies with Visual CPQ
October 26, 2020
Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, published a book in 2016 called The Fourth Industrial Revolution. In it, he describes a world centered around new technologies that fuse the physical, digital and biological worlds – a revolution that merges the natural and the artificial, affecting every society, economy, and industry.
Manufacturers of engineer-to-order products are left wondering how they can benefit from a world of digitized everything. How can they gain access to the enormous volume of data being generated every second? And, how can they leverage it to improve efficiency, enhance customer experience, and, ultimately, increase profits?
For some technologies, maturity has yet to be achieved. Others are ready to go right now. Still, despite the massive learning advantage afforded to early adopters, manufacturers of engineer-to-order products have been slow to embrace Fourth Industrial Revolution technologies across their enterprises. Such reluctance is mostly the result of two pervasive myths in the sector:
Get a data-driven perspective on how visual selling is becoming the future norm for B2B companies.
CPQ solutions provide one of the most affordable and accessible paths to a range of Fourth Industrial Revolution technologies for manufacturers of engineer-to-order products. By automating and augmenting product configuration, pricing, and sales document creation processes, CPQ shortens sales cycles, improves win rate, and revolutionizes customer experience. Thanks to VR (virtual reality), AR (augmented reality), AI (artificial intelligence), machine learning, big data, and a suite of automated systems, manufacturers can achieve results that would have been unimaginable just a few years ago.
With visual CPQ solutions, buyers can configure the most complex, customizable products from within a highly intuitive visual interface – a Visual Product Configurator – that can be accessed from anywhere, at any time, through any device. Buyers point, click, drag, and drop to resize sections, add or remove parts, upgrade features, and change colors, all within a realistic 3D scene. They can rotate their three-dimensional rendering to get a 360° view and zoom in and out to inspect it in minute detail.
The most advanced visual CPQ solutions, like KBMax, use VR and AR (emergent Fourth Industrial Revolution technologies) to let buyers interact with products before purchasing. Inside a VR world, they can operate a piece of machinery, fly inside a moving vehicle, or walk around a real-world structure – anything’s possible. AR overlays a digital representation of a product onto the physical world, as viewed through the camera on a handheld device.
Together, VR and AR provide a fully-immersive buying experience that resonates with buyers on a deep emotional level and reduces pre-purchase anxiety. All the data is captured upfront and signed off by the buyer, who knows precisely what they’ll receive before their product ships. Complaints, refunds, chargebacks, and disputes are reduced to a fraction of the industry average.
COVID-19 has put an end to business travel and in-person meetings in the short-term. And commentators predict that remote work will remain a dominant feature of the new normal. AR and VR capabilities have become even more valuable in light of this trend, enabling sales teams to offer highly compelling, showroom-beating buying experiences to customers wherever they’re located around the globe. Soon this will take place via 5G – opening up new markets and enabling lightning-fast interactions.
Manufacturers with tens of thousands of product options and intricate product and pricing rules can’t possibly expect human sales reps to configure perfectly optimized selections for customers, every time. As the name suggests, Guided Selling is a feature of CPQ that “guides” salespeople through the sales and configuration process, ensuring buyers receive a consistently high level of service, and sellers extract maximum value from each transaction.
By incorporating AI, machine learning, and advanced data science techniques into the guided selling process, CPQ vendors can massively level up every rep’s performance by suggesting customer-specific upsells and cross-sells to increase deal size. The AI learns which sales techniques are the most effective, tests new variables, and refines them over time to boost conversion rates and deliver exceptional value to customers.
Dynamic Pricing – allowing prices to fluctuate in line with ever-changing market conditions – is essential for maintaining agility and responsiveness in fiercely competitive, fast-paced industries. Only by adjusting prices continuously can manufacturers charge what customers are actually willing to pay, mopping up the consumer surplus that most businesses leave behind. A 1% increase in price translates into an 8.7% increase in operating profits (assuming volume isn’t affected.) So small, incremental pricing improvements can make a huge difference.
Effective price optimization can only be achieved by capturing and analyzing vast quantities of data (internal and external.) Advanced CPQ solutions use big data to analyze elaborate data sets so voluminous that traditional data processing methods can’t handle them. Once processed, manufacturers can use their data-driven insights to increase sales of slow-moving products, nullify competitors, boost product launches, shape customer behavior, and more.
Manual processes are expensive. They’re slow, labor-intensive, and prone to error. CPQ automates the generation of sales documents like quotes and proposals, freeing up sales teams to spend their time actually selling instead of carrying out time-consuming, menial tasks like formatting and number crunching in Excel.
Further to the above, KBMax CPQ combines complex engineering rules with CAD and design automation to automatically create detailed technical drawings with the touch of a button. Sales reps can generate anything from a simple rendering right up to the most complicated technical drawing. And all without any input from engineering.
BOMs, CNC cut sheets, and instruction documents can also be generated, so the production team knows exactly how to manage assembly. Because all the relevant data is captured at the configuration stage, there are no more missed emails, back-of-a-napkin sketches, relentless back-and-forths, and bottlenecks. The entire end-to-end process is streamlined for 38% faster sales cycles and a 35% increase in production.