Configure Price Quote (CPQ) is the standard process of helping a customer go from approximate requirements to “ready to purchase” as efficiently as possible.
Earlier this year, Forrester stated that with the rise in omnichannel sales and proliferation or Everything as a Service (XaaS), the CPQ category is experiencing a renaissance. Forrester notes that customers use CPQ technologies to self-educate, and sales reps rely on CPQ to compress cycles and increase order value and margin growth.1
The configuration element shows users compatible products and respects the rules of the system. These validation rules could be counting slots or bays to ensure a product is a workable solution on delivery. channelcentral’s configurator includes elements of demand shaping and shows available local inventory.
A CPQ tool shows the actual buy price but also factors in local promotions and incentives. Allowing users to add margin is also very important. channelcentral helps to instigate promotional pricing through to assisting with rebate claims.
Users can export a quote to Excel, Google Docs, CSV, custom XML, Email, HTML and co-brandable brochures. channelcentral supports a ‘buy now’ function placing the quote’s contents into a webstore shopping basket.
A CPQ tool increases sales and improves your customer experience.
1The Forrester Tech Tide™: Sales Technologies, Q1 2021, 15 Technologies That Underpin Sales, February 16th, 2021, Mary Shea, PhD, Principal Analyst, Caroline Robertson, Kate Leggett, Laura Ramos, Jennifer Zhang, Kara Hartig
B2B buyers, especially over the last 12 months, want to self-serve at their convenience without waiting for quotations, product information, or complicated manual discounting. Forrester’s recent report concludes that being a B2B digital seller is about more than eCommerce – it is leveraging new business models for direct and channel selling and having a critical 360-degree view of the customer journey.1
Forrester concludes that B2B buyers defect to sites where the friction is lowest, search is easiest, and the selection is broadest and deepest. How can you provide the best webstore experience for your B2B customer when selling complex products, and maximize selling opportunities?
Make it relevant. Analyze your customer behavior and offer customers products and services that they want – consolidate your eCommerce and Configure Price Quote (CPQ) data sources to derive this information – quote and sales data can accurately drive future demand shaping.
Make the customer journey as simple as possible. Provide a webstore configuration experience that is user-friendly and intuitive – your CPQ should work with your webstore and can be achieved with industry-standard APIs, processing complex configuration rules overlaid with a simplified customer user interface.
Take the manual aspect out of complex discounting. Offer instant discounting via your sales enablement and CPQ with user prompts to optimize the buyer journey.
Leverage Product Management for recommendations. Allow your user to see similar products if a product they are viewing is out of stock. Additionally, suggestions should be made on other attach items ensuring they are compatible, competitively priced, in-stock and a manageable number of alternatives is displayed.
Ensure workflow is set up to your CRM. Route incomplete or abandoned transactions to your CRM to trigger a follow up on criteria-defined opportunities.
channelcentral CPQ services can help your webstore achieve all of the above. We can help your webstore mature to the buyer user experience your customer wants and expects.
1 Forrester, Gauge Your B2B E-Commerce Digital Maturity Assessment: The B2B E-Commerce Playbook by Joe Cicman with Allen Bonde, Brandon Shaik, Kara Wilson, and Madison Bakalar, January 8, 2021
Earlier this year, Jay McBain (Principal Analyst – Channels, Partnerships & Ecosystems – Forrester) published a Forrester blog post entitled: Channel Software Tech Stack for 2021. We are delighted to be recognised under three categories for what we consider to be our successful CPQ applications. The categories in which we have been recognized are described in Jay’s blog are as follows:
Channel learning and readiness – Supports partner development through the administration, tracking, and delivery of educational training courses and enablement resources, including learning management systems, accreditation and certification management, content management systems, partner portals, communities, and sales enablement.
Channel marketplaces, financials, pricing, and inventory – Manages indirect-sales-related revenue and costs, determine the correct value of transactions, automates key financial reporting processes, and prevents errors in payment, commission, and rebates. It addresses pricing, inventory planning, gross-to-nets, discounts, compliance, tracking inventory levels, and price protection.
Channel ecosystem management – Manages the influence, transaction, and retention channels across the entire customer buying journey. It supports the recruitment, attribution, account and partner mapping, enablement, collaboration, technology/API integrations, and overall ecosystem management, covering all transacting/non-transacting and traditional/non-traditional partners.
Our key strengths are our depth of knowledge and expertise in the IT Channel, with the ability to take complex data sets and provide user-friendly CPQ tools and services, allowing sales personnel and buyers to generate accurate quotations quickly. As the B2B buyer increasingly wishes to self-serve, our CPQ tools and services support an improved customer experience for Partner webstore environments.
We fully appreciate the talent and expertise of all of the companies that appear in Jay McBain’s Channel Software Tech Stack 2021. It’s extremely rewarding to see so much work and support for Channel Businesses around the globe. Kudos to Jay and the team at Forrester for the work that goes into the Tech Stack each year.
If you are a Vendor working with a Software as a Service (SaaS) provider, have you considered the best method to deliver new features or changes you want in your software? Your functionality requirements may be complicated and challenging, so your SaaS Development team must work well with you to ensure the best outcome.
There are many software development processes, and each software development team must adopt a practice that works well for themselves and their customer.
Two of the most common processes are Waterfall and Agile, but what are the differences?
Waterfall is a sequential process, with each stage following from the last, resulting in the entire project being delivered at the end, once all subsequent steps have completed. Forrester has reported that almost 60% of companies use Waterfall product development practices only or a blend of Waterfall and Agile practices. 1
Agile is an iterative approach with each iteration being self-encapsulated, allowing projects to be sub-divided into smaller projects each that can be delivered separately. Forrester has reported that the top metrics that Software Development teams focus on are quality-centric, followed by user stories completed.2
So, what are their benefits and restrictions to developing SaaS?
We use a combination of both methods. Why?
By selecting specific parts of the Waterfall and Agile approaches, we can personalize how we work and be efficient for our customers. Using the Waterfall method’s front design concepts, our Development team can map the project’s requirements and measurements. Using the iterative approach from Agile allows more fluid customer input. This hybrid strategy works exceptionally well with our customers – known upfront costs and design whilst enabling continuous deployment via the Agile processes. For us, it is easier to plan a project from start to finish and still allow deliverable chunks of work, rather than finishing a process without customer input or preference throughout the development.
We’re exceptionally proud of our ability to manage and combine our software development processes to deliver to and benefit customers. Find out more about our CPQ software: https://www.channelcentral.net/cpq.asp
Forrester’s recent Market Snapshot announced that it is time to consider PIM as pivotal to a successful digital experience strategy and that the PIM vendor landscape is in transition to meet CX needs. Solutions to manage product data are undergoing a transformation, driven by the impact of PIM on CX, scale of products and proliferation of touchpoints.
channelcentral met with Pimberly, a UK-based Product Information Management (PIM) Vendor last year. Multi-vendor sellers have to manage huge volumes of product data in a variety of different formats, connecting to multiple, non-standard systems. PIM Vendors not only normalize the data but also offer merchandizing and demand shaping functions to help improve the Customer Experience (CX).
Product data fuels CX
Many poor B2B Customer Experiences are due to insufficient or low-quality data integrated into the buying process. The product data exists but may be spread across multiple systems or stored in non-user-friendly format. Forrester emphasizes that product data fuels CX.1 channelcentral considers a project to consolidate and automate data sources as fundamental in ensuring that capabilities can be added, and error removed. An example leading to poor CX could be displaying a different inventory level in eCommerce to the one shown in CPQ. Businesses should identify the best (Golden) data sources and real-time delivery mechanisms.
Vendors aim to offer a consistent CX, regardless of where the product or service purchase is made in the omnichannel. For a relevant product category, well applied PIM can significantly enhance the buying journey when coupled with Digital Asset Management (DAM). Forrester stresses the importance of DAM and PIM collaborating to form compelling content for B2B buyers, recommending the integration to improve the omnichannel experience.
Adding value
Web Services play a huge role now, turning data from Enterprise Resource Planning (ERP) systems into the dynamic data required by eCommerce and CPQ Systems. Expecting Product Managers to run reports or upload spreadsheets manually is not scalable. PIM vendors recognize this opportunity and in multi-vendor situations, where there is often more than one available data source (e.g. Vendor or Icecat), allowing eCommerce Store or CPQ stakeholders to set Golden sources per vendor or product line.
Everybody at channelcentral recognizes the human tragedy created by the coronavirus (Covid-19) pandemic. Life will never be the same; it seems. We’ve been very fortunate so far to have only one staff member testing positive for the virus, and that person is recovering, albeit with challenges.
Many of our customers and suppliers have responded to the economic conditions by furloughing staff, moving to home working and gearing their services to support the current (extraordinary) needs of people consuming IT.
Frank Sohn, a Configure Price Quote (CPQ) specialist at MGI Research LLC, has commented in a recent blog, on data that G2 has shared showing a surge of interest in sales tools over recent weeks, including CPQ tools.1 These tools offer the digital transformation of sales processes, essential for selling remotely and driving eCommerce – both critical factors for many businesses at present.
We had no real expectation of the impact of Covid-19 on the CPQ services we offer, and it’s been interesting:
1. Utilization has been lower but not ‘super low’. Even allowing for countries with strong lockdowns in place, and also being high users of our applications (UK, US, Spain, Italy, France as examples), people are still quoting tech products. 2. The disruption to the global supply chain has meant that: a. Orders that would usually be executed directly from the factory, now, understandably, have much longer lead-times. b. Vendors who also offer products for sale from Distributor Inventory have seen more interest. 3. Companies with robust eCommerce offerings have fared better than those without. 4. Very large companies tend to view investments over a much longer timeframe, so although the disruption seems like a long time, it’s hopefully going to be one or two quarters. Hopefully.
That’s not to say that the market is buoyant: it isn’t. We expect that once the virus infection levels start to recede, we’ll see a spike in demand for technology as businesses re-start projects. It’s highly likely that some companies may re-engineer, maybe to enhance their online customer experience (CX) or put renewed focus on local inventory.
Like most organizations, channelcentral tracks what the market is doing using formal resources (Forrester, Novus etc) and informal resources (Twitter, LinkedIn etc). One of the CPQ evangelists, Michael Kiruba-Raja, posted an article on LinkedIn that pitched eCommerce and CPQ Applications as alternative solutions.
It’s a really good article that makes some very strong points, BUT at channelcentral we were completely thrown by this approach to CPQ and eCommerce.
With a couple of exceptions, our CPQ Applications are designed to be part of an eCommerce User Experience. We don’t really understand why you would create a great CPQ application for Sales Users without also making that application, or the data that drives that application, available to Buyers.
Independent research firm, Forrester, recognizes that modern B2B Buyers want access to digital tools themselves and instantaneous access to information.¹ We accept that modern B2B buyers like to perform their own research, discover what is possible, shortlist and then reach out to a Supplier (be that Channel Partner or Manufacturer). Exposing your solutions on your eCommerce using CPQ or CPQ data seems obvious to us. Sure, it may be necessary to offer a subset of the total solution combinations, or a simpler user interface than you might offer an internal product guru, but that’s all possible with the right architecture and data structure.
Michael’s article does recognize that there is a hybrid world where eCommerce and CPQ co-exist. We agree: for channelcentral Sales Enablement and Customer Enablement is better than either/or.
¹ The State of Digitized Selling: Stop Testing the Waters and Get Immersed, Forrester, 27 December, 2019
ROI (Return on Investment) is important for any IT expenditure. Moving from buying infrastructure, software and services to more affordable monthly subscriptions does change the business justification for it, but doesn’t remove it.
On CPQ systems some savings are obvious because they are human factors:
A customer happy to self-serve a quote is cheaper than a sales person doing it on behalf of that customer. Especially when the customer has many choices and can ‘experiment’ with different configurations. Imagine having to contact Sales to re-work each quote version? Pre-CPQ that was standard practice.
A sales person quoting may be cheaper and more effective than a sales specialist quoting (especially low value deals).
A configuration that works first time avoids costly, high profile returns.
They’re all obvious benefits and are easy to calculate: the number of quotes customers do, the number of quotes sales do, the value of the quotes sales specialists do, the reduction in sales error returns etc.
What about Hidden Savings? Here’s a great example based on the sector channelcentral servers: the IT Channel.
Stock Turns
This is basic economics – the faster stock turns the less expensive it is due to lower capital tied up in stock and less price erosion. In IT the pace of development is so fast that products depreciate – before they’re sold. Any Distributor that buys for stock is taking a risk. CPQ helps to lower that risk. Here’s how:
Any good CPQ application has a variety of tactics to promote specific products against a range of similar products:
Top Recommended
Promotional Rebates or BOGOF
Incentive Points
Auto-Add
Included in Bundles
Banners.
Showing real-time stock means that customers can optimize their quotes for low lead-times.
Reporting.
Reporting.
Reporting.
Reporting
Strong emphasis on this one. The reason is that it’s often an afterthought with CPQ. A customer will provide an amazing brief yet reporting won’t even be mentioned.
CPQ is the future. This is not a slogan it’s genuinely the future: it quotes for things you haven’t sold yet. Most businesses track the weeks of stock they have against sales out (i.e. THE PAST). Sure, do that but why not fold in data from your CPQ Application – it’s free from channelcentral!
Factoring in your run-rate pipeline will invariably show two extremes:
You have inventory that nobody is quoting. That’s mostly bad: but always bad if it’s aged inventory. That’s really bad if you haven’t negotiated price protection with your vendor.
Your customers and sales people are quoting inventory you don’t have or have low inventory on. That’s also bad. Frustrated customers and sales people plus lost business.
The costs of lost sales and writing down aged inventory would outweigh the costs of channelcentral’s CPQ subscriptions. We may be under calling our ROI…
One aspect of eCommerce being tipped as a huge growth area is Marketplaces. Leading Technology Analyst Firm, Forrester¹, is predicting that small businesses and motivated enterprise buyers (especially those buying indirect goods) will flock to a place that offers choice, makes comparisons easy and pricing visible, features reviews, and has add-ons just a click away.
If you’re thinking, “This is something that I need to get into,” then one thing to consider is that the term Marketplace covers a diverse set of organizations; in the same way that “High Street” no longer means grocers and newsagents.
There is a high-level differentiation between a Marketplace and a Web Store. A Marketplace attribute is one or more of the following:
Must be multi-vendor (so the Fitbit Store is not a Marketplace).
Must be multi-seller (so a traditional Reseller like eBuyer or Insight doesn’t qualify).
Can allow the same product to be sold by more than one seller at a different price.
Can be single platform (Apple, Google, Salesforce).
Can be single product/service (Air BnB).
Marketplace operators face different challenges, largely depending on which of the “can” attributes they address. Air BnB solved the complexity of booking dates, property attributes, owner preferences once. Apple, and to a slightly lesser extent Google, introduced review procedures to ensure that apps available for their platforms conformed to a certain standard. Salesforce likewise.
Marketplaces that are true multi-vendor, face different challenges, as any complexity associated with the product or service, they are offering has to be solved for each product type and potentially each vendor. In our next Blog, Using Data to facilitate B2B Marketplaces, we look at how channelcentral seeks to solve some of those complexities.
¹”Think SKUs, Not SOWs: How Marketplaces Will Shake Up Tech Selling”, Forrester Research, Inc., November 12, 2019
User experience covers a variety of topics. A poorly designed user flow or a badly designed screen layout is irritating, but nothing gets users more frustrated than application latency. On initial launch, a CPQ application can have really good performance, but over time it degrades: application optimization is not a single task, it’s more like a maintenance contract! CPQ applications spawn data, valuable data and simply archiving that
At channelcentral we used to speak about a four second rule. It’s an arbitrary number, but we believed that if a user didn’t see a result on click within four seconds they’d click again as the assumption is they didn’t click correctly OR the application needs a reminder. Today: four seconds needs to be nearer one second – user expectations are higher due in part to the Smartphone experience.
channelcentral recently undertook an architectural review of the applications that run in its “CMS” framework. One finding was that a lot of latency was caused by “Web Services” where applications pull in data to enrich the content with time sensitive data (notably price and inventory). Users were experiencing wait times of between four and 10 seconds and that was clearly unacceptable.
The Development Team looked at Microservices (MSA: Micro Service Architecture) as a potential solution to latency caused by data requests. Once deployed, application performance improved by up to 10X.
Moving from monolithic to modular has other benefits in terms of deployment, fault detection and code maintenance. There are some ‘cons’ with Microservices, but improving performance to that extent makes it an architecture we’re investing in.
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