Configurator and billing
We have often talked about how important the client is for a business to be competitive, that it is essential to give users unique and satisfying experiences. In short, the final customer is the king. But as with all trends, we are forgetting to reinforce the rest of the business processes. We give everything to the client, but we do not provide our staff with the necessary tools to be able to maintain the same rate of change. We cannot neglect any aspect of the company, especially our sales force, even more so if our business is focused on B2B -distributors, franchisees, workshops, etc.
We must ensure that the information flows correctly between the sales, manufacturing, shipping or financial departments.
One of the most complex problems I have faced in my professional career has been to create a configurator and billing system, not only for the end customer, but also for the sales team itself, which is forced to handle different applications, spreadsheets and different discounts depending on the distributor or the quantity to make a quotation – often totally unrelated to the availability of stock. Both tasks become even more complex when it requires a piece by piece configuration instead of involving a finished product and ensuring it’s integratable into core systems such as NetSuite.
Our channels to communicate and understand the sales cycle where you have to implement and reconcile all the rules that apply according to the channel, size, quantity, objectives, if it is a close quarter, etc. can be hell, and I say that from experience.
What is a CPQ?
The acronym of Configure Price Quote. It literally means price configurator, but it is more than that, it is a sales tool that helps you to be more precise in pricing and facilitates the closing of sales. It is a software designed to be able to price accurately in any scenario, taking into account the available options, customizations, quantities, discounts, available stock (sku) and rules. In addition, it reduces the time necessary to close the price, since, being all in the system, validation from the different departments is not necessary.
Yesterday I had the opportunity to attend a demo of an application, Verenia, which makes all these tasks look like child’s play. Can you imagine a billing system that would work like Amazon’s shopping cart? Let’s take something as simple as a door order. I never imagined that it could be so complex. It is not a single piece, it has a frame, interior panels – which can be made of glass or Wood – different finishes, measurements, interior or exterior opening, metal parts, hinges… If all this can be configured, there will not be two priced the same. To complicate matters, imagine a repair of a car including the main spare part, liquids, screws, washers… they are multiple references, each one with its stock level and different depending on the model to be repaired. Do you think your customers would like to be able to calculate their repair in advance? And that you do not need to train receptionists or salespeople in the complexity of your product? And that your staff could prepare and send prices almost at once?
What other names is CPQ known as?
There are many terms we use instead of CPQ, but they are not exactly the same.
Sales Configurator: Can be used interchangeably, but a configurator may not include prices and final budget.
Product Configurator: Basically it’s the same as a sales configurator, but it focuses on making the right combinations of options. It does not have to include prices or budgets, but it could be used for the design or engineering department.
Guided Sale: The process of guiding the sales force through dynamic questions to configure offers of complex products or services.
Quote builder: A system that generates and distributes prices to customers. Sometimes systems that work with the product configurator or sales can be considered a quote builder. Its disadvantage is that it cannot be used if the product is configurable and the quote builder is not linked to a configurator.
I already have an ERP and CRM, why do I need more tools?
Keep in mind that the purpose of digitalization in the business world is to streamline processes and optimize resources. The time your sales force spends preparing a quote is time that it is losing in attracting new customers. The CPQ takes into account all the variables and business rules, even if it is necessary to sell product Y with product X.
The CPQ allows managing discounts, promotions, cross-selling and incremental sales, as well as validating the compatibility of products or services, all accessible from the tool itself and in real time.
In summary, what a CPQ brings
- Streamlines the process of budgeting complex or configurable products or services
- Reduces the time to generate or change budgets
- Improves accuracy in budgets and therefore in orders
- It automatically allows you to visualize the crossed and incremental sales options
- Improved visibility of applicable prices and discounts
- Reduces training time for new salespeople
- Unifies all sales channels and is visible on any device
- The simplest to the most complex product can be used, with centralized rules and prices which are updated in real time.
- Visibility of all changes, configurations, prices, discounts, SKU…
In addition to these advantages, being built on NetSuite, Verenia has more possibilities:
- The advantage of Verenia is that it does not require connectors or integrations. It works on NetSuite’s own functionalities, navigating from the CPQ to the orders, stock, client file or any other part of NetSuite without leaving the system.
- The incorporation of dynamic rates allows calculating the margins and commissions on the go, as well as customising prices, breakdown of quantities and discounts to the customer.
- Automatically generates invoices, bills of materials, necessary parts
- It allows you to send the order to manufacturing or warehouse when the order is confirmed