CPQ Product Rules

CPQ, or configure, price, quote, is a tool that simplifies the sales process for highly configurable products. It enables sales teams to accurately define product design and pricing amidst constantly changing variables.

By streamlining the configuration process, CPQ software reduces the risk of human error, increases efficiency, and allows sales teams to produce accurate and highly configured quotes with ease.

The power of a CPQ solution lies in its product rules–predefined guidelines governing product configuration, pricing, selling, and even manufacturing. They're the backbone of any CPQ solution, ensuring product configurations and bundles are viable and meet your customer's needs.

Understanding the importance of CPQ and its product rules is the first step towards leveraging their potential in your sales process. In the following sections, we'll delve deeper into CPQ product rules, the various types, and how they deliver value.

What Is CPQ?.

CPQ (configure, price, quote) software helps automate and simplify the engineer-to-order process. It lets users configure complex products with an easy-to-use interface, calculates prices in real-time, creates quotes, and auto-generates various engineering and manufacturing files, such as CAD files and bills of materials (BOMs.)

The most effective CPQ solutions offer visual and 3D interfaces, allowing users to interact with 3D product representations during configuration. They can drag and drop to change parts, colors, dimensions, and other product options and watch their product come to life on-screen.

CPQ product rules ensure that regardless of product complexity or user experience level, each final configuration is optimized for customer satisfaction, seller profitability, and engineering feasibility. They eliminate errors, miscommunications, and expensive post-sales complications.

In summary, the purpose of CPQ product rules is threefold:

1. They guide sales reps during configuration (guided selling), allowing only viable designs.
2. They maintain configuration integrity, making the process accessible to an inexperienced sales rep or customer, reducing errors, and enhancing efficiency.
3. They enhance the customer experience, accelerating sales cycles and ensuring products meet expectations.

Types of CPQ Product Rules.

CPQ product rules (configuration rules) come in various types, each serving a unique purpose in the configuration, pricing, and quoting process. Here’s a brief rundown of some of the most common:

Validation Rules:

A validation rule ensures the configuration meets specific criteria before it can be completed. For instance, a validation rule might require a particular thickness of material to be selected to meet safety requirements. Validation rules are executed at specific times, like when you add an item or update an option. This is sometimes called an evaluation event.

Alert Rules:

An alert rule provides warnings or notifications when certain conditions in the configuration are met. For example, an alert rule might notify reps or customers if a selected component is out of stock.

Error Conditions:

An error condition stops users from making errors by blocking actions until issues are resolved. This is different from an alert rule, which simply provides an alert.

Submit Rules:

A submit rule is executed each time a user submits their finished configuration. For example, a submit rule could specify a completed product or bundle should be saved and added to a quote.

Visibility Rules:

A visibility rule governs which configuration attribute is shown/hidden or enabled/disabled. For instance, if a user configures a motorbike instead of a car, you should hide tire options for wheels three and four.

Selection Rules:

A selection rule defines which options can be selected in a product bundle deal. For example, a building supplies company could set up a selection rule to hide the "Insulation" option until someone picks the "Drywall" option. This ensures that insulation is only offered when drywall is part of the order.

Filter Rules:

A filter rule helps you create flexible or dynamic bundles. You don't have to update the bundle whenever you add or remove products. The rule automatically chooses the options in the bundle based on what you have selected.

How to Set Up CPQ Product Rules.

Effective setup of CPQ product rules is the key to optimizing your sales process. But with some CPQ solutions, creating rules is challenging. Coding knowledge is required, which means enlisting the help of the IT department or an external agency, leading to wasted time and money.

Epicor CPQ has a no-code rules engine based on a no-code programming language called Snap. Snap enables anybody to define and manage rules without any coding. It provides a user-friendly interface where users can specify the conditions for each rule using simple drag-and-drop or point-and-click actions.

The benefits of a no-code rules engine are substantial:

1. Speed: Setting up product rules is faster than traditional coding. You can implement rules quickly and start leveraging benefits right away.
2. Cost: You don't need a team of experienced coders, which can be expensive to hire and manage.
3. Agility: You can carry out rapid experiments and adapt lightning-fast to shifting customer preferences and changes in the market.
4. Collaboration: Technical and non-technical staff can contribute ideas, helping fuel innovation.
5. IT Backlog: Non-technical staff can create rules, freeing the IT team to work on more strategic projects.

Other Types of CPQ Rules.

CPQ rules control more than just product configuration. Here are some other types to consider:

Pricing Rules

These rules control pricing as users modify the product or bundle within the configurator. They can include a discount schedule, labor cost, lead time, and weight.

With Epicor CPQ, price rules are dynamic. The solution can be set up to tweak prices in real-time in line with fluctuating factors, like competitor pricing and market demand.

Approval Rules:

With CPQ, pricing can be approved automatically based on predefined approval rules. However, In some companies (especially those where sales representatives have more discretion in setting prices), manual approval by management may be required.

In such cases, approval rules can orchestrate how quotes are routed within the sales team. Approval requests can be sent automatically to managers. Managers can then approve/reject them with a single click, eliminating the need for time-consuming back-and-forth communication.

Behind the scenes, CPQ creates approval chains that provide visibility into the approval process, ensuring transparency and accountability. Everyone involved is aware of the status and progress of each quote, keeping teams aligned.

Workflow Rules

Workflows form the foundation of an efficient, automated system. They streamline tasks and reduce the need for manual intervention. Workflow rules automate specific actions based on a defined product action or other trigger.

Integrating CPQ with other software like CRM (Customer Relationship Management), ERP (Enterprise Resource Planning), and CAD (Computer-Aided Design) enables seamless automation across functions and systems. Here’s an example:

• The user finalizes a quote in CPQ.
• A CAD file is generated for the product configuration.
• The CAD file is routed to the engineering department.

Next Steps.

CPQ product rules are the backbone of any CPQ solution. They guide users through the product configuration process and ensure configurations are viable. By reducing errors and boosting speed, they enhance customer satisfaction and loyalty.

For further questions or to learn more about how Epicor CPQ can streamline your business, don’t hesitate to get in touch. Contact us today and discover the power of CPQ.

FAQ.

What are product rules in CPQ?

In CPQ systems, a product rule defines how different products or components interact with each other. It sets conditions for when certain items can or can't be included in a product bundle or configuration.

For example, if you're selling windows, a product rule might say, "If a customer chooses double-pane glass, they can't choose a single-slide frame." In this case, the single-slide frame option may be removed from the relevant filter field.

Think of a product rule as a guideline for creating configurations and bundles that make sense, both technically and from a business standpoint. It helps you avoid errors and speeds up the quoting process. This leads to faster sales cycles and improved customer experiences.

What is a price rule in CPQ?

A price rule in CPQ software determines the cost factors affecting a product or bundle. This is vital for dynamic pricing, promotions, or discounts.

Say you're running a promotion. If someone buys 10 units, they get a 5% discount. A price rule would automate this discount when the condition is met.

So, just as a product rule ensures product consistency, a price rule enforces pricing consistency while allowing for flexibility. You can customize quotes quickly without risking errors, making the sales process smoother for both sides.

How do you create a product rule in CPQ?

Creating a product rule in CPQ varies by software.

With a no-code rules engine, users build rules by dragging blocks from the toolbox and snapping them together to form logic statements. Make a mistake; real-time validation shows you exactly what’s wrong as you write. Clicking the validation error takes you to the problem area and presents a way to fix it.

What is the difference between option constraints and product rules?

Option constraints and product rules are both used in CPQ software to customize products. But they're not the same thing.

An option constraint is narrower, just dealing with options within a single product. It limits what can be selected. For example, if a customer chooses a specific product–hardwood flooring–they can't add carpet to the same room order.

A product rule is more versatile, managing relationships between products and product features. It can be any logic-based, advanced algorithm and can include multiple options. For example, if an existing customer purchases hardwood flooring, suggest a water-resistant, anti-slip treatment or moisture barrier underlay and offer a 10% discount.