Configurable products are essential in today’s world. No matter what industry you’re in or what you need to do to make your business function optimally, the software you use needs to be able to adjust to your needs.
When it comes to the sales process, this idea can be particularly cumbersome. In the B2B world, every potential customer has unique needs that must be customized to fit their particular situations. Companies that sell configurable products are often not able to face these complexities in true form because there are simply too many variables in many cases. You have to take into account the size of the business you’re quoting, the dimensions of the proposed project, and other factors that may not be “standard” across other customers’ projects in order to accurately create a proposal that works for both your own company, as well as your potential client.
When so many factors are up in the air, B2B companies are forced to figure out how to make custom quotes on a whim, often falling short of revenues that could have been realized if better processes were in place.
Custom quotes can cause a number of obstacles, including the following:
1. Time-Consuming Processes that Cut into Revenue
When you have a human (or multiple humans) in charge of the quoting process, they’re being pulled away from other things they could be doing to make your company money each time they have to review a new iteration of a quote.
Since each version of a quoted product is custom, these quotes often contain a number of attribute combinations, each of which has its own pricing factors associated. Additionally, some of your customers might receive bulk-rate discounts or promos specific to their organization, which can further complicate the pricing structure.
Manual quoting processes that rely on outdated tools such as spreadsheets and price books are far too slow and unreliable.
2. Inaccurate Quotes and Orders
Generally speaking, any company that offers custom quotes have a hard time doing so because their options are often intermixed with a seemingly endless array of attribute combinations. It can be very difficult for a system that supports the sales team to also support the operations processes at large, as the sales team is in it to make a sale, while the organization is looking for an optimal outcome on the contracts that are signed.
Outdated systems often prevent the sales team from quoting products and services correctly, particularly if the tool they’re using isn’t robust enough to cover every single possible combination. When this happens, invalid asset combinations appear, and erroneous quotes are provided. This can cause friction if the contract later needs to be reworked, or if your organization ultimately has to take a loss because an agreement was signed at a lower cost than it should have been written initially.
To avoid this rework or any missteps associated with poorly written contracts, you’ve probably instated additional approval layers that require manual work so your staff can double-check quotes before they’re converted to orders, which slows the velocity of the sales funnel.
3. Over-Discounting and Profit Margin Loss
It’s not uncommon for B2B providers to have one-of-a-kind items that require specific pricing. If there aren’t predetermined pricing rules in place, your sales team has to figure out a reasonable price based on the conversations they’ve had with potential customers. Sometimes, this process requires pulling in members of other teams to ensure the quotes are as accurate as possible.
Neither of these situations are ideal.
When you empower sales representatives to set their own pricing, the deal usually results in over-discounted agreements that hurt revenue margins. Of course, you could involve engineering resources to keep sales honest, but this can cause internal friction. Additionally, bringing in internal team members to assess the costs of projects can increase the cost per quote because you’re pulling people away from other things they could be doing to focus on a specific project’s layout.
4. Inefficient Sales-to-Delivery Handoff
Most companies’ quote-to-production process is inflexible and can be quite difficult to navigate. When a person contacts sales to ask for a quote, someone from the sales team dives into the discovery process and collects information the engineering team will need to figure out the feasibility of the requested implementation. The engineers then need to create a bill of materials (BOM) that contains each item necessary to make the product, as well as plans that define each step needed for production. If any piece of this process needs to be changed along the way, the process has to begin all over again. This causes a lot of back and forth before the project can really get underway.
Overcoming the Challenges of Quoting Custom Products
Your sales team isn’t stuck with these obstacles. You can mitigate these problems by employing software that’s built for automation, allowing technology to do the heavy lifting. Configure, price, and quote (CPQ) systems will allow you to uncomplicate complex deals during the sales process, ensuring more accurate, timely quotes without the hassle and frustration of traditional models.
CPQ systems give your sales team a web interface that creates quotes the moment they select individual attributes needed by each customer. Using pre-determined business logic, your team will be empowered to produce commercially viable, valid agreements, keeping the business’s needs in mind throughout the quoting process. As the product is configured, the prices adjust in real-time, applying rules that ensure only deliverable attributes are quoted. This means happier customers, more quotes, and higher close rates.
NetSuite CPQ From MIBAR
NetSuite CPQ enables sales teams to quickly configure, price and quote (CPQ) products and services with complete accuracy and reliability—directly in NetSuite.
MIBAR’s team is filled with NetSuite CPQ experts who can help you reduce the complexities associated with the quoting process. We can show you how you can produce accurate, reliable quotes directly in the NetSuite system. The CPQ software offers the ability to produce 3D product visualizations and automatically create sales proposals with ease. Not to mention, NetSuite’s CPQ works seamlessly with NetSuite ERP, CRM, and eCommerce solutions, helping to ensure pricing, inventory, and profitability data always stay connected.
Schedule your free consultation with our MIBAR team to learn more today!