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 New products are launched, old products are retired and superseded.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
A Configure Price Quote (CPQ) vendor with a vertical market focus, can understand quickly and precisely what you need. channelcentral operates exclusively in the heart of the IT Channel.
Good CPQ should improve the customer experience (CX) while lowering the cost of sales. Your sales staff and customers need to quote quickly, accurately, with compatible options and your latest prices. Forrester reveals that the reduced sales rep time on admin and lower-value tasks accounts for 65% of the total revenue benefit resulting from sales enablement modernization.1 Free up your staff to build more meaningful customer relationships and work on higher-value deals.
CPQ can improve customer engagement and the experience sellers create with buyers. Linking your webstore to your CPQ application gives your customers a seamless and more meaningful buying experience.
CPQ applications can leverage inventory and influence demand shaping. Optimizing configurations for in-stock products, using top-recommended options, auto-add, finders and product associations.
CPQ can create measurability – where there is an expectation of meeting or exceeding sales targets. Our CPQ applications easily accommodate sales promotions and SPIFs to incentivize sales.
Enable customers to self-serve and access anywhere. More than ever B2B buyers are expecting to self-serve. Infact, 67% of buyers prefer to avoid interacting with sales as a primary source of information.2 Our CPQ applications can be used from wherever a user is working from.
When a customer needs to have contact with sales, provide your sellers with technology, content, and insights that make them relevant and effective in front of buyers. 84% of buyers want sales staff to understand their industries, business and products.3
Technology should be designed around sales processes. Let our IT Channel CPQ drive your sales and eCommerce.
1 Forrester’s Q2 2019 Global Sales Enablement ROI Survey. See the Forrester report “Building The Business Case For A Modern Sales Enablement Toolset”, November 6, 2019
3 Forrester Consulting’s Q3 2019 Global Marketing Content Credibility Study. See the Forrester report “Credible Empathetic Content Wins Over Elusive B2B Buyers”, April 30, 2020
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…
With the availability of the internet and explosion of eCommerce, consumer marketplaces have grown significantly over the last two decades.
B2B marketplaces are now predicted to grow significantly as the purchasing area of choice for the business purchaser.
channelcentral was interviewed in the November 12, 2019 Forrester research report, ‘Think SKUs, Not SOWs: How Marketplaces Will Shake Up Tech Selling’, which has identified B2B sales are struggling to accommodate more complex purchases in marketplaces.
Tim Moyle, channelcentral CEO is quoted, “Marketplaces, even Amazon Business, face issues selling complex, configurable tech products.”
channelcentral predicts that a key requirement from B2B buyers purchasing in a B2B marketplace will be the ability to see relevant add-ons, as well as product comparisons, visible pricing and reviews.
channelcentral has existing solutions to improve the B2B buying of complex product configurations in a Web Store environment. Currently the boost! Suite of flexible Web Data Services aimed at improving customers’ eCommerce experiences using Compatible Options, Recommends and Attach Patterns.
This same concept can be applied to B2B marketplaces. Just one area of improvement in the B2B marketplace evolution, nevertheless, an important one, to make the purchasing experience relevant.
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
In fact, without CPQ, it’s difficult to understand how PC as a Service can exist. PCaaS isn’t (today) a one stop shop: it’s rare that a PC Manufacturer provides Hardware, Services, Software and Airtime. PC, Services, Operating System sure. Office 365 or Google Docs? 4G (or 5G) airtime contracts? Not so easy.
To solve this, channelcentral has invested in one of its CPQ platforms (Market Pro for HP Inc) to support true multi-vendor PC as a Service. Solve is the word too. We had to architect in a few areas:
In the film Ghostbusters crossing streams was a no no. In Market Pro we had to ensure that we didn’t combine Capex (think payment up front) with Opex (think Finance contract).
We wanted to leverage the work we’d done with HP Services, who had created innovative suites of services to support “as a Service” procurement and lifecycle management/support.
We also wanted to leverage the support for Indicative Finance.
The solution had to be flexible, so that a Market Pro Host could choose, and ultimately self-manage the portfolio of subscription products.
The outcome? When a user applies Finance to a quotation, we flip into “as a Service” mode. Users can apply the HP Services in either mode. The hardware and services become a monthly subscription and the user is presented with complementary subscriptions. The first host to offer Multi-Vendor PCaaS chose to include Office 365, OneDrive for Business, Exchange Plans (for Shared Mailboxes) and Webroot SecureAnywhere Business Endpoint Protection.
Want to find out more on how CPQ can facilitate PCaaS? Email marketing@channelcentral.net
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.
Has this call or email conversation happened to you?
IT Partner: “Would you be interested in this amazing new product?”
Customer: “Sure, what is it?”
IT Partner: “Gimmix X120. It’s the best.”
Customer: “Yes, I know they’re fantastic; we’ve got five in the office already. It’s not that I don’t believe you, it’s just that we have no need for any more right now, I thought you’d know that.”
It’s common. Shotgun blast marketing from a CRM tool that has almost the right amount of information to be effective. Presenting solutions to a customer works better if you know what they already have, so what might be relevant to them. You can either identify the opportunity or look at technology that’s in situ to see if there’s something complementary or revolutionary to move a customer’s IT forwards. Promoting an Add-on for Office 365? Then target customers WITH or migrating TO Office 365.
If you’re an IT Vendor that sells through the Channel, wouldn’t you have more confidence if the IT Partner said: “We have 300 customers, and we have identified 50 of them as best to target for this campaign.” Sending marketing communications to an irrelevant target audience is not recommended. An additional 250 pointless or even frustrating marketing messages isn’t in anyone’s interest.
The rub is: CRM tools aren’t built as audit tools. That’s why one IT Partner engaged with us to build one, optimized for IT, to plug-in to their CRM tool:
Another benefit of using a CRM plug-in – if your organization knows what IT is deployed in a customer, when your sales person sails off into the sunset, your pipeline doesn’t sail off too.
If the potential of an IT Audit plug-in is of interest, and you would like to find out more, please email: marketing@channelcentral.net
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.
Back in January 2019 channelcentral Blogged on how CPQ was an enabler for PC (or Device) as a Service (PCaaS):
channelcentral Blog 