In the age of digitalization and the presence of advanced information and communication technology, consumer behaviour and expectations have changed significantly. Thanks to technology, customers can quickly access a variety of goods and are not willing to wait long for them.
There is a growing demand for digital goods that customers can access with just one click via smart device. The purchase process of “off-the-shelf products” is also much easier than in the past. Almost all products can be ordered online, and they are delivered to us the next day or in a very short time.
Through their user experience in purchasing digital and off-the-shelf products, customers have also set high expectations when purchasing complex products such as doors, windows, pergolas, swimming pools, machinery, tools, agricultural machinery, services, etc. Customers are not willing to wait longer for complex products but want them right away.
A quick response to demand is a competitive advantage
Sales of bespoke products have been present online for some time, but the shopping experience is quite poor. For sales of complex products, most companies use outdated inquiry forms. On the one hand, they generate unqualified demand for companies, and on the other hand, customers wait a very long time to obtain an informative offer.
There is no universal answer to what acceptable response time is, but of course, every company must strive to respond to inquiries as soon as possible. With each additional day that a potential buyer waits for an offer, they are less likely to buy the product.
Regardless of the presence of a variety of tools, nowadays, some companies that market complex products can wait up to 14 days for the informative offer. Such companies are no longer competitive. Users appreciate and expect a quick response from the company and are making decisions based on the company’s responsiveness, not just based on the price of the products.
Our experience shows that the conversion between demand and purchase is much higher if the response to an inquiry is as fast as possible. Our customers spent 2 to 14 business days before implementing the SaleSqueze demand response tool. The SaleSqueze tool, which enables the automatic creation of offers based on the customer’s configuration, transfers the preparation of the offer from the seller to the buyer via a web configurator. The customer will receive an informative offer to his or her e-mail address immediately after submitting the request. The conversion between inquiry and orders has increased for our customers after the implementation of the tool. This indicates that a quick response is extremely important.
CPQ solutions speed up or completely automate bidding
CPQ stands for Configure – Price – Quote. It is a software tool that is primarily intended for the sales departments of companies that market complex and bespoke products. The basis of the tool’s functionality is that the price of the product is determined based on the configuration of the product’s properties. Both the properties and the final price are automatically formed into the final offer.
The CPQ tool solves the eternal problem of sales teams. They spend most of their working hours preparing offers, instead of devoting time to a personal contact with customers and closing deals. A Salesforce research, which analyzed 2,900 vendors worldwide, found that vendors spend only 1/3 of their time completing deals. The rest of the time is spent on administrative tasks such as creating offers and coordinating with customers. The CPQ tool solves the problem of overburdening the sales team with writing offers, as the offer within the program is formed by itself or a minimal investment is required to prepare it.
All elements must be involved in the efficiency and effectiveness of CPQ solutions
All three elements of the CPQ tool operate have to be in symbiosis. With the absence of only one element, the tool cannot serve its purpose.
The Configuration element takes care of defining product properties that are tailored to the wishes and needs of the customer. If the configurator is public, then potential customers choose the properties of the product according to their wishes and needs. However, the configurator can also be internal, so it is only available to members within an organization. In this case, the product is configured by the salesperson according to the wishes of the potential buyer.
Based on the selected properties of the product or service, the price is calculated, which is the second element in the CPQ solution. In some companies, pricing strategies are so complex that there is chaos in the sales team. With the CPQ tool, this problem is solved, as all prices are entered into the system, and discount policy is set in advance. In this way, even companies that have a high number of commercialists maintain uniform pricing and discount policy for all their customers.
The last element of the CPQ tool is the quote, which is created based on the product configuration and the automatically calculated price. The sales representative is thus relieved of writing offers and can redirect his time to closing deals and personal contact with customers. With an automatically prepared offer, we also avoid mistakes of sellers such as wrong prices, inappropriate discounts, or grammatical errors.
There are many reasons to implement a CPQ solution
There are several different reasons for a company to choose to implement a CPQ tool into their business process. Some of the reasons are relieving the sales team, automating the sales process, prioritizing lean business, etc.
A company needs a CPQ solution when quoting creates a bottleneck in the sales funnel. In this case, the sales team prepares offers most of its working day, instead of focusing on other sales activities, such as gaining potential customers and closing business opportunities. Preparing an offer for complex and bespoke product is a demanding process that can take several hours. The preparation of the offer is a burden for all sales reps because the work is very uniform. At the same time, it requires extreme precision to avoid unwanted errors. Errors that can occur are incorrect product features, inappropriate prices and discounts, and grammatical errors.
The CPQ tool is also a great opportunity for companies looking to automate their sales process. Some CPQ tools have developed advanced functionalities that allow the customer to make the entire purchase via the CPQ tool without additional communication and coordination with sales reps. The process works by allowing the web configurator to personalize a complex product. Depending on the desired properties, the price is calculated in real-time and is also visible to the buyer. When the customer is satisfied with the selected features and price, the web configurator directs him or her to the payment page. With the payment of the customer, the sales process is completed without burdening the sales team.
With a small input to a large effect
One of the most important effects of the introduction of the CPQ solution is the relief of the sales team. The preparation of offers is fully automated or it is much simpler and takes less time. Sellers also avoid human mistakes such as wrong prices and discounts and grammatical errors.
In our experience, some companies, due to the abundance of work, are not able to respond to all the demands. Therefore they lose business opportunities and create a bad reputation among potential customers. With the CPQ tool, the sales team can easily process a larger number of demands. As a result, it does not lose business opportunities, which enables the growth of the company.
The implementation of the CPQ solution also brings a unified pricing policy and a discount policy. Prices and discounts are predetermined in the system, as a result, all customers receive the same product prices, regardless of which salesperson they interact with.
Our customers have achieved excellent results with the SaleSqueze tool. Elaphe saved 80% of the time in administrative tasks and reduced the number of e-mail requests received by 90%. Hausmart managed to reduce the time for preparing offers by 70% and fully automate the process of purchasing materials. With our tools, the company Dekor senčila prepares 4 times more offers for plush curtains compared to last year, when all offers were prepared by hand. With the SaleSqueze tool, Dukin managed to prepare 486% more offers for StyleOUT® dustbins compared to the same period last year.
Top results from our customers
Connectivity of the CPQ solution with other business solutions.
Typically, CPQ solutions are integrated with CRM and ERP systems, as their integration provides a detailed overview of the entire sales process, and sales analytics is crucial for the company’s business decisions.
CPQ systems are very different from each other and offer different functionalities and connectivity options. For example, the SaleSqueze tool already offers some basic functionalities of CRM and ERP systems, so the tool can also work independently without integration with the mentioned systems. For a better overview of the business, of course, we recommend connecting with other systems, if they are established in companies. We also provide our customers with connections to marketing tools, production systems, purchasing systems, and payment systems.
The difficulty of connecting CPQ solutions to other key systems in the company depends on what systems it connects to. For the most used and universal CRM and ERP systems, connections are already supported and integration is therefore very easy. If the connections are not developed in advance, a universal connector is used, which connects the CPQ solution to the desired systems. It is more difficult to connect to unusual systems or systems that are custom made. In SaleSqueze, in such a case, the integration is still made.
CPQ solutions are very diverse
Each CPQ tool is unique, but they all have 3 key elements in common: configuration, price, and offer. The biggest difference between the tools is the number of other functionalities offered by the tool. Some tools are very basic and allow only automatic offer design through configurator. Others are very advanced and have some functionality of CRM and ERP. Advance tolls allow the visual display of the configured product, are supported by analytics, have marketing automation tool functionalities, etc.
They also differ in whether it is an internal system or the configurator is public. The internal system is intended only for employees within the organization. If it is a public configurator, the product is configured by the customers themselves, so it is necessary to pay a lot of attention to planning the user experience.
SaleSqueze is considered one of the more advanced CPQ tools. The tool has a product configuration supported by a 2D or 3D render that visually displays the final product so potential customers can also see what they are buying. The tool is supported by the SaleSqueze Analytics through which we can measure and track sales by segments and periods. This allows the identification of activities with high sales success and those that require improvements. We have also developed a SaleSqueze Partners, which enables them to complete several orders together by automating operations and coordination between the company and its partners based on available data.
CPQ solutions are the future of selling a complex product online
CPQ tools are relatively unknown and consequently, only a few companies benefit from their functionality. The market potential is huge! According to our market analysis and experience, a CPQ solution would be needed by at least 90% of companies that manufacture or market bespoke products.
Online sales of “off-the-shelf products” is already a well-known practice and the year 2020 also brought many changes in the sale of complex products. More and more providers are aware of the importance of online sales. They are looking for new ways to sell complex products and the CPQ tool is certainly one of the best solutions to this problem.
Say goodbye to manually prepared offers!
Offers will be prepared by the CPQ tool SaleSqueze. Book a meeting and find out how.