How Can CPQ Software Actually Boost Your Conversion Rates by 40%
December 16, 2020
CPQ software is a set of powerful tools that are designed to automate and optimize your product configuration, pricing, and quoting activities within a company. It is used by a number of the world’s most innovative business enterprises, but can CPQ software bring a boost to your company’s conversion rates by 40%?
This depends, of course, on your business case and also the specific CPQ software that you use. 40% is just an average conversion rate increase that’s experienced by KBMax CPQ customers. But while it’s actually impossible to predict through complete accuracy which companies will touch the threshold after implementation, we still can make a pretty accurate guess.
Manufacturers of complicated, engineer-to-order goods have a chance to gain the most from CPQ software by simplifying their sales processes, reducing the sales cycles, and also improving the engineering efficiency. Massive advancements are presently being made in biotech, but CPQ software is applicable pretty widely. Find out more to find out how CPQ software could impact your conversion rate right now.
Demand for customizable products is snowballing, and manufacturers are struggling to cope. Sales reps might have the skills required to configure products with a handful of different product options, but when this number proliferates to hundreds, thousands, or even more, configuration becomes an “impossible” task.
It’s no mystery that CPQ has a major impact on customer experiences, but what can it do for your organization?
Even the most knowledgeable product experts lack the mental agility required to build-out perfect configurations optimized for customer satisfaction, engineering efficiency, and margin maximization every time. If they could, it might take weeks!
The internet has opened up a global pool of competition and consumer-like buying experiences, leaving buyers with higher expectations and less patience than ever before. We’re living through a personalization revolution, and CPQ software is uniquely placed to cope with the new set of challenges currently presenting themselves.
Perhaps the most fundamental feature in CPQ software for manufacturing is its “product configurator.” It’s a tool that the sales reps and also buyers can quickly use to efficiently carry out complicated product configuration with no in-detail technical knowledge or engineering input needed.
Basic product configurators guide the sales reps through a series of questions designed to uncover every customer’s product configuration. Product rules that are coded into the backend of the tool make sure that reps put together optimized products and bundles every single time, without any worries about the compatibility issues, leaving the reps to focus on providing engaging sales interactions while the CPQ software does all the heavy work in the background.
On the advanced end of the CPQ software spectrum, you have your visual product configurators. They can provide anything from a 2D or 3D visual buying experience, right to an AR and VR configuration process that’s carried out inside a simulated reality. Visual product configurators perform similar functions as their text-based cousins; they do it with more speed, efficiency, and with more engagement, from both the buyer and sales perspective. Here’s why-
Rather than go through a multitude of questions and text-based options, the users of visual product configurators can quickly assemble the products inside a high intuitive visual interface, pointing and clicking for the selection of various options and then dragging and dropping them into the right place. Sales reps also gain a rich understanding of the products they are selling, becoming trusted advisors for buyers and connecting with them on a deeper level.
One of the biggest CPQ software features is its ability to include visual product configurators in external, customer-facing websites. This innovation allows the buyers to configure and purchase their goods independently, self-serving without any actual human input. Through 3D product configuration, buyers then gain a clear understanding of products before they ship, reducing purchase anxiety— 5G promises a fully immersive AR and VR configuration experience from anywhere and through any device.
Buyers need to be available with all the requisite product information before they actually make a favorable purchase decision. Visual product configuration provides buyers with the ability to actually see the finished products, rather than relying on imagined pictures in their heads, reducing the uncertainty, ambiguity, and also information-overload. However, the reality is: you can furnish the buyers with the most hyper-realistic product rendering that’s possible, but then it means nothing if there’s not a price accompanying it.
The average sales rep spends a mere 34% of their time actively selling, and the remaining 66% are highly involved too much in Excel, number-crunching, creating proposals, and even seeking approvals for discounts. The more complicated a product is, the more complex its pricing calculation, and the longer buyers wait to receive a quote. CPQ software cuts down quote times from weeks to just milliseconds. The pricing rules built into product configurators recalculate the prices in real-time as users go about choosing various product options so that the buyers can always stay within their budget boundaries.
With CPQ software solutions, pricing isn’t just fast. It’s “intelligent.” A broad range of internal and external conditions are worked into the overall pricing calculations, helping form many intelligent pricing strategies which maximize the revenue and margins. Said variables could also include order history, order volume, customer prices, market demand, cost prices, incentives, and any other case-specific alternatives.
Monitoring and incorporating all this data into pricing decisions lies beyond the scope of any human-only pricing team. Still, the most amazing CPQ software solutions enhance rather than stop the sales reps: Reps can then easily override the automated pricing calculations and then assign discounts and the special pricing conditions as they find fit.
Customized approval loops bring in seamless discounting, improving the oversight and control during the process of clearing bottlenecks. When a rep crosses a prescribed discount threshold, the CPQ software then automatically sends an approval request to the right manager, who can then sign off or reject a price by just a single click. No more missed calls and email threads – having a single centralized and transparent pricing hub that keeps everyone on the same page and accountable at the same time.
There is no greater waste of time that’s spent creating quotes manually in Excel. It’s the most mundane and repetitive task that you will ever come across. And it’s so easily manageable that there’s absolutely no reason as to why a machine should not do it. CPQ software users just need to click a button to create beautifully-designed, brand-correct quotes, with other simple docs like proposals, marketing collateral, terms and conditions created just as swiftly. All human error is eliminated as a result.
KBMax CPQ takes the complete document generation a huge step further. With CAD and design automation, most of the non-technical users can produce technical drawings in CAD, BOMs, cut sheets, and even instruction documents without getting in touch with the engineering department for assistance. Engineers can also spend their working hours getting focused on innovation without being preoccupied too much with everyday mundanities.
Emily is a marketing professional with knowledge across branding, digital strategy, and creative content. She enjoys educating her audience on the benefits of products and how their ease and use can help with efficiency and problem solving.