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.
Few Configure Price Quote (CPQ) vendors offer Product Lifecycle Management (PLM). Our customers love that we do. So, what is it, and why is it a service that many CPQ vendors choose not to offer?
A recent ForresterNow article cites the importance of Manufacturers investing in Product content for more lift in all Channels – strengthening relationships with Distributors and increasing product sell-though.1
CPQ Systems don’t work without data; in this context, product data. New products are launched, old products are retired and superseded. That’s the Product Lifecycle. Feeding a CPQ System with data from large Enterprise Resources Planning (ERP) Systems can be problematic.
channelcentral has solved this by working with Manufacturers to receive complex product data and embellish it to support the customer CPQ experience.
Here are some of the key aspects of this service:
When products are launched at New Product Introduction (NPI), the PLM Team ensures that products are released on the date to a Service Level Agreement (SLA).
Before NPI is a confidentiality breach.
After NPI is potentially damaging to the new product’s adoption.
The product’s attributes and compatibility/configuration rules are interpreted and modelled.
When products ‘sunset’ they are only switched OFF for businesses that have exhausted their supply. They remain visible for those with stock.
Dealing with Product Managers at Manufacturers, it was evident that NPI was important, but sunset was critical. Why? Legacy stock is VERY costly to clear, and you could justify an entire CPQ System on this point alone. Keeping obsolete products on sale where they are available is profitable – sometimes obsolete products are in greater demand than new ones.
Including PLM solves major headaches for Manufacturers who want to drive CPQ into Channel eCommerce. It’s a hidden gem.
1 Forrester Research, Inc., FORRESTERNOW, ‘Distributors Bear the Burden When Manufacturers Skimp on Product Content’, July 12th 2020, Joe Cicman, Nick Barber, Allen Bonde
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…
BI Reporting to Measure and Manage your Business channelcentral launched monthly BI Reporting earlier this year for all its CPQ customers. The reports are in graphical and text format, focussing on key metrics of customer utilization of our CPQ applications. Feedback from customers has been very positive.
The key benefits include:
Providing evidence of the Return on Investment (ROI) from the CPQ application;
Sharing insights;
Enabling customers to make informed decisions quickly.
What’s new? channelcentral has provided reporting to customers since launching in 2007, however this has now transformed from ‘data’ to ‘information’. Three key aspects of reporting have changed with the introduction of BI reporting:
The addition of graphical presentation.
Time – instead of single-month data tables, it’s now shown in a chart covering six rolling months.
Geographical groupings – so companies who operate across borders can see consolidated reports. Although this can be done with data reports, it’s more difficult to interpret.
Using value to make decisions The real value of this reporting, along with any data that feeds into a company’s management information system is:
Timeliness – timing is critical if intervention is required, to resolve an issue or to improve engagement.
Presentation – information that is simple, easy to digest and enables decisions to be made quickly is truly valuable to a business.
Accuracy – the data presented is an accurate reflection of usage and values, so the customer can either see the value the application is adding, or if intervention is required to drive up utilization, regardless of whether the user is a staff member or a customer.
The story behind the data and its potential Although the reporting is presented concisely, customers can be provided with the data feeding the BI Dashboard, to look into and understand ‘why the numbers are what they are’. Furthermore, other than pitch rate, there is further potential use of the product data. Our BI reporting metrics could include most popular systems or breakdown of user functions (sales/technical) if required.
Be aware of missing BI metrics BI Reporting should be comprehensive. Reporting should include actual figures for the numbers of quotes and value of quoting, in addition to percentages. Beware of missing metrics or very round number growth – this could be a sign of a low utilization ‘cover up’. Any low utilization should be highlighted to a customer; to use the data to drive Sales (to use and promote) and Marketing (to drive customer breadth). channelcentral does not add ‘spin’ to customer BI reporting. With added commentary we consider that marketing. Without commentary we consider it reporting.
The growth of BI Reporting According to forecasts by analyst Markets and Markets, the global Business Intelligence (BI) market is estimated to grow from USD 17.09 Billion in 2016 to USD 26.88 Billion by 2021, at a Compound Annual Growth Rate (CAGR) of 9.5%. The short-to-medium term for BI reporting certainly looks bright, and channelcentral certainly intends for its customers to benefit from the growth.
Everyone’s a winner Sharing useful business information can lead to higher customer loyalty, more profit and ultimately strengthen a company’s competitive advantage.
Most companies would identify with this particular statement: “We want to be easier to do business with.”
It’s how to become easier to do business with; that’s the challenge, not deciding it’s a good thing. In the CPQ market we believe the following are solutions to that challenge:
1. Replace disjointed and labour intensive processes with smooth, accurate and where possible, automated processes. Moving from spreadsheets to online systems provides behavioral insights that help you improve your processes. Good sales come from good processes.
2. Open all hours. Make your ‘closed’ sign redundant. Allowing 24 x 7 access to your sales tools not only stretches the sales window, but also means customers can work when they want to, not just when you do.
3. Replace email ping-pong with slick workflows. Identify clunky processes which result in endless email replying. Who likes mail trails with 30 replies? Nobody. Deploy slick workflows to simplify more complex buying processes. If you are working on a document or proposal why not look to collaborate online instead of mailing edited files to other indefinitely?
4. Surface key buying decisions together: stock, price, promotion in your sales tools. Alt-tabbing between apps is the modern day ‘swivel chair’. Consolidate data. If it costs, say $20, to do a quote, why do five different quotes to win one deal?
5. Introduce guided buying. Don’t always expect your customer to start with a blank canvas. Use starter kits, bundles, solutions, templates etc. to save time. Apply machine learning to improve the quality of these shortcuts.
6. Utilize your Business Information (BI). Decisions based on real data is better than guessing what your customers want. Use their data to improve their user experience.
Ease of business doesn’t improve with one giant investment, it’s lots of tiny steps and the odd leap.
Lots of channelcentral’s competitors use a Software Licensing billing methodology: cost per seat usually. Some bill based on utilization: the more you use the tool, the more you pay. It’s proportionate. It’s fair. It’s also madness; here’s why:
• Customers don’t like variable costs, at all.
• If you, or your customer, is trying to promote the use of CPQ tools versus manual ways to provide quotations to customers then why tax on use?
• Does adding a customer, or processing a quote, cost a CPQ Company anything?
• Win/Win billing systems (e.g. taking a commission from orders) quickly turn into Lose/Win or Win/Lose.
From the outset channelcentral set out to avoid ‘Tax on Use’. An annual subscription covers the cost of the service and includes the license, hosting, support and IT integration services. It includes unlimited utilization by Employees and Customers. Those subscribers know exactly what they were going to pay for the contracted term. Customers like predictable costs.
The more the customer uses the CPQ Application the lower the cost per quote or transaction. If channelcentral improves the functionality of the CPQ Application, resulting in better results or greater utilization – the subscriber is getting ‘More for the Same’.
On a similar thread some of our competitors have different costs for different feature sets. This is a stealth tax – demanding higher costs for features that already exist and don’t really cost more to add. Having a fully inclusive service for a customer adds to the subscription feel and generates greater goodwill and loyalty.
channelcentral’s experience is that its subscription model promotes higher utilization and delivers better results, with less complexity than models that tax on use.
It shouldn’t be all about the sales teams! The marketing folk tend to get forgotten when the industry talks about Configure, Price, Quote (CPQ) Software and the benefits that it brings. The truth is, there are probably even more benefits to a Marketing Manager than a Sales Manager. Here are the key ones:
Return on Investment (ROI) – Time and time again Marketing teams are asked to show their return on investment and it’s not always easy to do. Seeing your quote volumes increase YoY after adopting CPQ Software with detailed reporting not only demonstrates your ROI but breaks it down to a granular level.
Promotions – Ensure your promotions are not missed or forgotten with auto-add technology in your CPQ Software. Detailed reporting will show you the typical configuration types for market insight.
Go-to-Market Strategy – Control exactly when, what, where and who sees your new products and promotions.
Market Research – With real-time, detailed reporting find out exactly when, what and where your customers are quoting for valuable segmentation data for your next promotions and campaigns.
Advertising – The most targeted adverts you’ll ever run! Get right to the heart of your market by advertising in your CPQ Software or better still, if your CPQ Software is Multi-Vendor like Freebird, why not sell advertising space and make some money?!
New Product Introductions – A new and additional route to your customers. The greatest value here is for Channel Marketing teams where Multi-Channel CPQ Software such as Freebird are used. Add your new product at host level and release it to every instance of your tool and instantly you’re market-wide!
Upsell – Something we are all asked to do more of! It has never been easier with auto-add features as well as recommended options.
Brand – Beat your competition with faster quote-to-order cycles and lower error rate (less returns) for a reputation all marketing teams would be proud of.
To learn more about CPQ Software, how it can integrate into all your internal systems and how it can help your marketing (and sales!) teams visit our website or contact us.
Do you even have one? So many of our customers are stuck in the same old processes they have used for years, but now is the time to change.
Why is a Quote-to-Order Strategy important?
Being experienced in the channel, channelcentral gets many requests for help to improve efficiencies in Distribution for configuring complex products but very few of our customers actually know the answer to the question we are asking today. It’s because they don’t have a strategy. By putting one in place however, you will instantly see the positive impact it can have on your business:
Consistent approach so staff and customers have set expectations.
Improved accuracy – quote it Right, First Time!
Improved Security – Less risk of losing data as quotes are stored in the cloud.
Improved product information.
Instant growth in the number of quotations.
Reduced overheads.
Faster quote turnaround time.
Ability to quote anywhere either through your browser or a Smartphone App.
Increase in revenue!
Sounds too good to be true doesn’t it?! The great news is, it really is quite simple.
By considering a Configure/ Price/ Quote (CPQ) service as part of your Quote-to-Order Strategy you could be reaping the rewards sooner than you think. Why not contact channelcentral today to discuss your strategy and how we can help with a cost effective solution?
Companies that operate Cost Plus margin are now supported. HP iQuote’s International reach means that it encounters different accounting practices. A recent experience has been that there are countries where Retained Margin is not common (the HP iQuote default margin calculation). Instead, Cost Plus is the standard calculation in this region.
To ensure that HP iQuote fits a country rather than a country fitting HP iQuote, there is a new “Host Variable” which means a Distributor or Reseller that hosts HP iQuote can choose whether the margin calculation is Retained Margin or Cost Plus.
Example: Cost Plus is €100 * 1.05 and Retained Margin is €100 / 0.95.
To request a change from Retained Margin to Cost Plus simply contact channelcentral.net via the Feedback Form requesting this change.
Another record month thank you. Despite only 20 trading days (max) you broke all previous records:
1775 Unique Companies used HP iQuote.
Over 3000 Users.
Nearly 27k New iQuotes raised.
Over 10,000 Exported iQuotes.
Regional Splits/Trends 40% of iQuotes are AMS Region – Canada and Latin America ramping up to add to USA numbers. EMEA ahead due to a number of new Distributors deploying HP iQuote internally and to Resellers.
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