Why CPQ Is the Secret Weapon for Sales Management in Industrial Manufacturing

Effective sales management is a constant challenge for industrial manufacturers. Organizations deal with problems, such as:

• highly customized and complex products
• intricate pricing structures
• lengthy sales cycles
• complex pipelines

 

Thus, closing deals effectively and efficiently becomes difficult. Things can get more complex if organizations rely on outdated systems and processes, like switching between spreadsheets and tools, and working in silos. If your organization is operating in the same fashion, it’s time to rethink your sales strategy.

That is where the Configure Price Quote or CPQ solution comes into the picture. Let’s take a closer look at CPQ software.

CPQ software is a robust solution that transforms how industrial manufacturers streamline their processes. It helps sales teams manage products, pricing, and quoting effortlessly. In this article, we will explore the importance of CPQ in the sales management process. We will learn how exactly CPQ can solve sales woes, and why organizations should choose it for their sales funnel management.

 

Why Industrial Manufacturers Struggle with Sales Management

Sales management is not easy, especially for industrial manufacturers that handle complex products. They have to deal with different sales channels and multiple pricing strategies. Here’s why most industrial manufacturers struggle with sales management:

 

 

Complex Product Configurations

Unlike other industries with standardized catalogs, industrial manufacturers often deal with incredibly complex, customized products. Customers rarely order “off the shelf.” Instead, specifications are meticulously configured, affecting pricing and production timelines. It leads to lengthy sales processes. Consequently, these processes become prone to errors and inefficiencies.

 

Pricing Challenges

Pricing in industrial manufacturing isn’t that simple. Let’s take a closer look. Variables like material costs, labor, order volume, and customer-specific agreements all need to be calculated precisely. Without the right tools, pricing becomes a time-consuming and tedious exercise for manufacturers.

 

Legacy Systems

Many manufacturers rely on outdated or disconnected systems to manage customer interactions. These systems can sometimes be slow and ineffective. Furthermore, they may require multiple people to work on them, which can be expensive and time-consuming. This leads to disconnected communications, making it difficult to build and maintain customer relationships.

 

Prolonged Sales Cycle

Complex products and decision-making processes often result in longer sales cycles. Managing such timelines without proper tools in place can lead to bottlenecks and missed opportunities. A prolonged sales cycle can also sometimes lead to a lost deal.

These challenges show that there’s room for improvement. But how can manufacturers solve these issues? The answer lies in the CPQ solution.

 

What Is CPQ and How Does It Help?

CPQ is a sales enablement software designed to help organizations streamline their sales processes. By automating product configuration, pricing, and quote generation, CPQ reduces manual work, accelerates quote-to-order times, and minimizes errors. Here is how a CPQ solution can help industrial manufacturers:

 

Configure: Helps sales teams configure complex products with predefined rules and options. This ensures that every configuration is accurate and feasible.

Price: Automates pricing-related calculations for sales teams. It includes manufacturing costs, discounts, region, promotional offers, volume, and more. This brings consistency and accuracy to pricing while securing profit margins for organizations.

Quote:  Generates accurate, professional quotes in a fraction of the time. It enables sales representatives to respond swiftly and confidently. This not only enhances the customer experience but also supports faster and more informed decision-making.

 

CPQ as a Sales Management Tool

Here’s how CPQ solutions benefit manufacturers:

 

Real Time Collaboration

Employees across sales, marketing, and engineering departments can collaborate in real time using CPQ solutions. With CPQ software in place, everyone can work with the same, accurate data. This removes silos from processes and promotes effective collaboration.

 

Alignment Across Functions

Organizations can align sales with other departments and business functions by implementing CPQ into the sales workflow. For instance, engineers can be confident that configured products are manufacturable and valid. Finance teams can get accurate cost and revenue projections up front.

 

Centralized Quoting Activities

CPQ brings sales tasks, such as product configuration, pricing, proposal creation, and delivery, into one single platform. CPQ eliminates the need for multiple tools and spreadsheets, making sales easier and more streamlined.

 

Key Benefits of CPQ in Industrial Environments

Implementing CPQ isn’t just about reducing manual effort; it’s also about driving efficiency and effectiveness across organizations. Here are the key benefits it offers industrial manufacturers:

 

1. Faster Quote-to-Order Cycles

CPQ software speeds up the sales process by automating configuration, pricing, and quoting. Sales reps can close deals quickly and handle multiple interactions without any hassle. They can also make updates and deliver proposals as per customers’ needs and preferences. This ensures reduced quote-to-order cycles.

 

2. Improved Accuracy

Sales teams may face costly errors due to manual processes in product configurations and pricing. CPQ eliminates this risk by using predefined rules and logic. These rules ensure that every quote is accurate and feasible. CPQ also fetches data from other systems to maintain data and pricing accuracy.

 

3. Scalability

CPQ software provides the scalability needed to handle increased customer orders and meet production demands without compromising accuracy or efficiency.

 

4. Personalized Customer Experience

Customers today expect personalized solutions and services. CPQ helps organizations deliver them accurately. Its ability to customize quotes and provide tailored configurations ensures a better customer experience.

 

5. Boosted Margins

Precision in pricing calculations reduces the chances of underpricing, overpricing, or over-discounting. CPQ protects profitability by maintaining rigorous controls over pricing and discount variables.

 

6. Stronger Competitive Edge

Industrial manufacturing is a competitive market. By automating key sales functions, CPQ allows organizations to focus on innovation and customer satisfaction. Organizations can set themselves apart from slower and less efficient competitors.

 

How to Integrate CPQ with Existing Sales Systems

Modern CPQ solutions are designed for seamless integration with the existing sales ecosystem. Here is how organizations can integrate CPQ software effectively:

 

1- Assess Your Current Systems

Before implementing CPQ, it is important to evaluate your existing sales software management tools. Identify gaps and inefficiencies to ensure your chosen CPQ solution addresses them.

 

2- Choose the Right CPQ Solution

Not all CPQ tools are created equal. Choose a solution tailored to industrial manufacturing. Look for features like advanced configuration rules, dynamic pricing models, and robust reporting capabilities.

Cincom CPQ proves to be a solid CPQ solution for industrial manufacturers. It handles complex and highly customized configurations for organizations. This allows manufacturers to meet their customers’ precise requirements while maintaining fast lead times and accurate quotations. It also provides accurate and consistent quotes in multiple channels, languages, and currencies.

 

3- Train Your Team

After choosing the CPQ solution, sales reps should also use the tool to its full potential. Provide comprehensive training to your sales team. They must understand how to use it and how it works so they can maximize CPQ’s capabilities.

 

4- Monitor and Optimize

Implementation and use of the CPQ solution are just the beginning. Organizations need to regularly monitor the impact and performance of CPQ in the sales processes. Analyzing insights can help them refine workflows and ensure continuous improvement.

 

Unlock the Potential of CPQ for Your Business

Industrial manufacturing is evolving, and so are its sales challenges. Industrial sales and innovation management have become key to success. CPQ software can be the key to enhancing sales management processes. By automating complexity, reducing errors, and enhancing customer experiences, CPQ empowers sales management processes to help organizations compete in an increasingly demanding market.

Talk to our CPQ experts today and discover how the right solution can transform your operations.

 

FAQs

1- What is CPQ software and how does it work?

CPQ stands for Configure, Price, Quote. It is a sales enablement tool that helps sales teams build custom product configurations, calculate pricing and discounts, and generate professional and error-free quotes. It simplifies complex sales processes and reduces manual errors.

 

2- Why do industrial manufacturers need a CPQ solution?

Industrial manufacturers often deal with:

• customized and complex products,
• variable pricing models, and
• long sales cycles

CPQ helps manage this complexity by automating configuration and pricing, ensuring quotes are both accurate and fast.

 

3- Can CPQ software integrate with existing sales management systems (CRM or ERP)?

Most modern CPQ solutions can seamlessly integrate with other sales management solutions, such as CRM and ERP software. This integration creates a smooth flow of data between all systems used in the process.

 

4- How does CPQ improve pricing accuracy and protect profit margins?

CPQ applies pricing rules consistently by factoring in costs and discounts automatically. This ensures that no quotes are underpriced or overpriced. Thus, sales reps can stick to approved pricing and discount strategies.

 

5- Is CPQ scalable for growing manufacturing businesses?

CPQ solutions can handle a growing number of products, customers, and pricing variations. It can scale with the growth pace of the manufacturers.