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How does CPQ support the three stages of bundles for manufacturers?

December 24, 2020

Last year Forrester reported on B2B pricing and promotion solutions and their application of advanced analytics to help companies manage and optimize pricing throughout the product lifecycle. The same report recommends advanced manufacturers exploit new digital capabilities and channels to bundle high-quality physical objects and services to deliver unique value to each customer.1  

We understand that manufacturers like bundles: it improves margin, drives up the Average Unit Price (AUP) and aids marketing (selling solutions versus a bunch of parts).

Configure Price Quote (CPQ) can enable bundles if it can handle all three stages of the process of delivering them:

Stage 1 – Bundle Creation

Deciding which products to group should be simple; it is not. Limiting the portfolio will reduce attractiveness, increasing flexibility increases the complexity for transactional partners (e.g., distribution).

Whether you describe this as Big Data or Artificial Intelligence: if you have quote/sales data that is fresh, relevant and dynamic, it can be leveraged to ensure market-appropriate products. Your CPQ application should be able to do this and provide a vehicle to create starter kits, which users should customize. Critically it must track product lifecycle status and, ideally, local inventory.

Historically, without CPQ, eCommerce has relied on virtual part numbers to manage bundles. This approach is problematic. A rule that says ten systems can have ten options and ten services creates 1000 virtual parts. Most of which will never be used.

Stage 2 – Bundle Customer Experience (CX)

Where the tyre meets the tarmac, a user will only choose a bundle route if the experience is flawless:

  1. When users choose an available product in one or more bundles, offer them but do not mandate them.
  1. Some users will enjoy a solution experience, so also offer that route.
  1. Ensure that if a user breaks a bundle (removing a component), they can undo it to restore the bundle.
  1. Offer proximity alerts – add X product or service to enable this bundle and make $Y saving.

Stage 3 – Rebate Claiming

Invariably, manufacturers that sell through a Channel compensate the Seller retrospectively for the Bundle discount. The Seller needs to validate their claim with very flexible bundles – CPQ can pre-validate claims using the same rules set to create them. Claiming issues is a crucial barrier to adoption in Channel.

Summary

If you are serious about bundles – you need CPQ. If you are in the Tech Sector – you need channelcentral.

1Now Tech: B2B Pricing, Q2 2020, Forrester’s Overview or 16 B2B Pricing Providers, George Lawrie with Pascal Matzke, Anna Vyshnevska, August 31, 2020

Watch the summary video here:

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