Configure, Price, Quote (CPQ) solutions are mission critical for today’s modern manufacturers selling to B2B buyers.

The benefits of CPQ are critical for manufacturers today to sell more and scale as B2B buyers increasingly expect the same types of expedited and seamless self service purchasing experiences they have when shopping B2C. In fact, recent reports found 66% of B2B buyers would switch to a company that offered personalized quotes, and 59% of tech buyers routinely avoid meetings with sales managers.

As the number of Engineer-to-Order (ETO) manufacturers continues to increase, it will be more important than ever to deliver fast and accurate pricing and quoting to avoid losing sales – especially to competitors that have digital self-service capabilities.

What is CPQ, anyway?

CPQ, which stands for “configure, price, quote,” is a sales feature which helps businesses generate sales quotes easily, quickly and accurately. CPQ software does this by automating many of the cumbersome processes that are a part of B2B sales quote creation. With growing customer demand for product configuration, advanced sales tools like CPQ are critical to success in a competitive B2B sales landscape.

CPQ can be used by businesses of all sizes, but it’s particularly useful to B2B manufacturers who are selling highly customized products, like engineer-to-order (ETO) manufacturers. That’s because in the event that a buyer needs something which requires engineering expertise, the right CPQ tool can accommodate their request –  incorporating business rules and constraints to ensure that configurations are both valid and feasible, and preventing incompatible or impractical combinations of features and options.

Aleran’s AI-powered platform and CPQ feature, as one such example, can help ETO manufacturers determine popular customer order configurations in order to provide a starting point for a quote. Manufacturers using AIeran’s customer-facing CQP integrates fully with existing technology, including the ERP. It greatly reduces the time it takes to get from quote to salable product in addition to improving quote accuracy. That’s critical as it’s estimated that 66% of a sales rep’s time is consumed with time-consuming processes like error correction.

How exactly does CPQ work?

Aleran’s CPQ feature integrates with a customer’s other critical business technology, like their CRM and ERP platforms, in order to help ensure pricing accuracy and speed the entire quoting process. This integration means organizations don’t need a separate CPQ-specific software to complicate their already complex tech stack.

Aleran’s CPQ feature is customer-facing and allows quotes to be automated according to a set of pre-programmed configuration rules, like: account quantities, volume discounts, optional product features, revenue types and customizations. This enables sales reps to rapidly create personalized quotes for each customer, speeding the decision process and generally improving buying rates.

Let’s take a closer look at each part of the CPQ process.

5 Reasons CPQ is a Must for B2B Manufacturers

B2B manufacturers are turning to CPQ in increasing numbers because of its ability to improve every aspect of the quoting process. According to worldmetrics.org, 89% of companies believe CPQ software is essential for effectiveness in today’s sales landscape. Here are 5 reasons CPQ software is a must for manufacturers selling B2B.

1. CPQ improves accuracy of quotes.
   Because of CPQ’s configuration capabilities, only valid product configurations can be quoted, reducing the potential for human error (like incorrect specs or quoting incompatible components). This not only lowers the costs associated with returns, it also vastly reduces quoting and ordering errors overall. Getting accurate quotes from the start also means less back-and-forth communication, saving time and admin costs. Worldmetrics.org reports that businesses using CPQ solutions can increase their quote accuracy by an impressive 75%.
2. CPQ shortens the sales cycle.
   Time efficiency is crucial for manufacturers, as it helps them respond to customer inquiries faster and gain a competitive edge. CPQ automates many of the most time-intensive parts of the quoting process, which means reducing admin time and speeding the quote-to-cash (or lead-to-cash) sales cycle. CPQ also allows manufacturers to make swift updates to pricing, configurations, and product offerings in response to market demands, competition, or other considerations –  reducing the costs associated with delayed market responses.
3. CPQ helps you optimize pricing levels.
   Manufacturers often have complex pricing models based on a variety of factors like volume, customer type and regions. CPQ software can automatically calculate the correct price taking all of these variables into consideration, helping ensure the accuracy of pricing within your quotes. In addition, CPQ’s ability to control discount management based on predefined rules helps prevent the kind of human errors that erode margins – like unauthorized price cuts.
4. CPQ lowers inventory costs.
   By providing accurate product configurations and demand forecasts, CPQ allows manufacturers to better align their production with actual customer demand, minimizing waste and reducing costs associated with storing excess inventory. In addition, integrations between your CPQ tool and ERP and supply chain systems allows for real-time visibility into inventory and production status, so manufacturers can make more cost-efficient sourcing and production decisions.
5. CPQ makes B2B buyers happy.
   CPQ helps manufacturers stay current with today’s B2B eCommerce landscape, which demands convenience, control and customization. CPQ platforms often include self-service customer portals where buyers can configure products, get instant quotes and place orders. Every time a customer receives a timely, clear and transparent quote facilitated by CPQ, it builds trust. CPQ tools allow sales teams to automatically and clearly outline product configurations, pricing and terms with a level of personalization and efficiency that enhances the customer experience and helps close deals faster.

Bottom line: manufacturers sell more with CPQ

CPQ solutions help B2B manufacturers sell more and grow revenues by improving quote accuracy, accelerating sales cycles, optimizing pricing, reducing waste and generally making buyer experiences better. These are crucial benefits that ultimately lead to lower overhead, smarter resource allocation and bigger profits.

Are you an ETO manufacturer looking to optimize your process? Check out our recent blog post – it isn’t as complex as you think.

Ready to learn more? Talk to an Aleran expert today!

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