CPQ and sustainability are two things that are shaping manufacturing in 2023 and beyond

Like any business, manufacturers are always evolving and adapting to new challenges to keep up with their competition, meet customer needs or new regulations. In the wake of the COVID-19 Pandemic manufacturers are beginning to look for new ways to lessen the odds of disruption to their businesses.  

One major disruption that is on the horizon is climate change. The world is dealing with an uncertain future when it comes to climate change. Many countries are beginning to create laws and regulations that require manufacturers to adhere to certain sustainability standards. Companies investigate how they can make a positive contribution to the change in society. 

These regulations will require manufacturers to find sustainable business models at a global level. In addition to meeting the standards, companies will also need to report these numbers to government agencies.  

That’s why businesses are also still investing heavily in their Environmental, Social, and Governance (ESG) ambitions and requirements as a top priority in 2023 for manufacturers across industries.  

The rising demand for sustainable products from customers and regulations are driving manufacturers to find ways to sell sustainably. Check out how a recent Tacton survey highlighted the importance of improving sustainability for our respondents:  

Preparing for upcoming regulations and laws is an important topic for manufacturers in 2023. 20% of the respondents we polled noted that they are extremely prepared to improve, that’s up 8% from 2022. Even the manufacturers who were hardly prepared decreased 3% from last year. This increase in preparation isn’t only because of regulations, but also because of customer demands. 

That’s a lot of information to take in for manufacturers and finding a place to start their CPQ and sustainability journey can seem daunting but tackling these challenges head on can lead to new and exciting ways to sell while meeting regulatory requirements and customer demand.  

Let’s take a closer look at what’s driving sustainability for manufacturers and where to start.  

Who’s driving changes in sustainability?  

Combating climate change will make everyone a stakeholder when it comes to finding a solution. Manufacturers, customers, investors and regulators will all have choices to make to find the best way to combat these challenges. Two of the main drivers of sustainability are regulations and customers.  

Regulations and policies 

The EU Green Deal and SEC´s proposed climate disclosure Rule in the United States are a few examples of initiatives countries are putting into place to better achieve goals of carbon neutrality. These can include items like carbon emissions impact, waste management and energy efficiency. 

Many countries now require publicly traded companies to report on their sustainability practices and environmental impact. This helps to promote transparency and accountability and encourages companies to improve their sustainability performance. 

Buyers: Customers are demanding more transparency from manufacturers. With buying power shifting to a younger generation, it’s important to deliver on their demands for more sustainable products. This provides an excellent opportunity for manufacturers who find ways to create sustainable products that can drive higher sales and profits. 

Catering to customers who want sustainable products may seem challenging for manufacturers, but the demand is there, and it can lead to higher profits, and more visibility amongst buyers. Making customers happy is at the center of any good business, that’s one reason why leading manufacturers across the globe are starting to invest in sustainability to meet their customer needs.  

Why does investing in sustainability make sense for manufacturers? 

Manufacturing is typically slow to react to change, but manufacturers can’t afford to wait to invest in sustainable business practices. As we talked about, regulations and customer demand for sustainable products is here to stay. Here are five reasons manufacturers should invest in sustainability:  

1. Cost savings: Adopting sustainable manufacturing practices can lead to significant cost savings in the long run. For example, using renewable energy sources can reduce energy costs, while reducing waste and increasing efficiency can lead to lower operating costs. 

2. Improved brand image: Consumers are increasingly conscious of environmental and social issues, and they are more likely to support brands that are committed to sustainability. By investing in sustainable practices, manufacturers can enhance their brand image and reputation, which can lead to increased customer loyalty and sales. 

3. Compliance with regulations: Many governments around the world are introducing regulations that require manufacturers to reduce their environmental impact. By investing in sustainability, manufacturers can ensure that they comply with these regulations and avoid potential fines and penalties. 

4. Access to new markets: Many companies are now requiring their suppliers to meet certain sustainability standards. By investing in sustainable practices, manufacturers can access new markets and increase their business opportunities. 

5. Long-term viability: Sustainability is about creating a long-term, resilient business that can thrive in a changing world. By investing in sustainability, manufacturers can create a business model that is better positioned to adapt to changing market conditions and consumer preferences over time. 

Creating new and exciting ways to buy sustainable products will be a key success factor in the upcoming years for manufacturers. By showing the environmental impact of any product purchase manufacturers will give their customers the best option to meet their needs while also adhering to their own possible regulations.             

Reducing costs has become increasingly important to manufacturers, especially with looming uncertain economic conditions. In our latest survey we saw 59% of manufacturers investing in ways to reduce costs in 2023. Manufacturers who invest in sustainable selling can reduce oversizing of solutions, excessive waste and more. 

Overall, a strong ESG plan that prioritizes sustainability, ethical practices, and social responsibility can help a company build a strong reputation in the marketplace. This, in turn, can lead to increased brand loyalty, customer trust, and reduced costs. Companies with a strong reputation are often able to command higher prices for their products or services, which can boost revenue and profitability. 

How can manufacturers start their CPQ and sustainability journey?  

Conduct a sustainability assessment: The first step is to assess the current state of sustainability within the organization. This includes evaluating the environmental impact of manufacturing processes, energy consumption, waste generation, and resource usage. This assessment will provide a baseline from which to measure progress. 

Set sustainability goals: Based on the assessment, set sustainability goals that align with the company’s values and priorities. These goals should be specific, measurable, achievable, relevant, and timely.  

Develop a sustainability strategy: Develop a sustainability strategy that outlines the actions needed to achieve the goals. This may include reducing energy consumption, sourcing sustainable materials, implementing recycling programs, and reducing waste. 

Engage employees: Engage employees at all levels of the organization in the sustainability journey. This may include providing training, establishing a sustainability committee, and encouraging employee participation in sustainability initiatives. 

Partner with suppliers: Work with suppliers to ensure they also prioritize sustainability. This may involve incorporating sustainability criteria into supplier selection, auditing supplier sustainability practices, and collaborating with suppliers to improve sustainability performance. 

Track and report progress: Monitor and track progress towards sustainability goals and report on progress to stakeholders. This includes tracking key performance indicators (KPIs), such as energy consumption, waste generation, and emissions reduction, and reporting progress through sustainability reports and disclosures. 

By following these steps, manufacturers can begin their sustainability journey and make progress towards more sustainable and responsible manufacturing practices. 

What other solutions can manufacturers deploy to help with sustainability?  

CPQ (Configure, Price, Quote) software can help with sustainability by streamlining the sales process and enabling companies to make more informed decisions about their products and services. Here are some ways CPQ can contribute to sustainability: 

Optimize product configurations: CPQ software allows companies to create and configure products that are more efficient and sustainable. By using CPQ to optimize product designs, companies can reduce material waste, minimize energy consumption, and decrease the overall environmental impact of their products. 

Enhance supply chain management: CPQ software helps companies better manage their supply chain, by automating processes such as vendor selection, procurement, and order fulfillment. By reducing supply chain inefficiencies, companies can minimize their carbon footprint and contribute to a more sustainable economy. 

Enable data-driven decision making: CPQ software provides real-time insights into sales performance and customer behavior. This data can be used to inform strategic decisions, such as which products to prioritize or which markets to focus on. By making data-driven decisions, companies can optimize their resources and minimize waste. 

In closing CPQ and sustainability are two factors that can influence manufacturers to make the right choices going forward: 

Sustainability takes time and commitment from manufacturers. Seeing results may take time, but patience will be rewarded. Planning this shift towards more sustainable selling will create new opportunities and new markets to sell in. This all starts with a rock-solid plan and the commitment of the entire organization to deal with the changing landscape.  

Find out how Tacton is helping manufacturers like Xylem and Plus Pack achieve these goals with our industry leading and trusted CPQ. 

Schedule your call with our experts today!

The Benefits of CPQ: A Comprehensive Guide

Your customers expect timely, accurate quotes whenever they place an order. But in the era of mass customization, providing these quotes on an infinite number of product variations is challenging.

Configure, Price, Quote (CPQ) software is designed to address these challenges by fueling a self-serve product customization process that offers updated pricing without damaging your margins through inaccuracies.

So, how does CPQ work, and what are the benefits of CPQ software?

What is CPQ?

CPQ consists of a sales tool or a suite of tools designed to optimize the purchasing process and streamline your sales pipeline. It supports organizations across various industries to create accurate sales quotes personalized to the customer.

Within the manufacturing industry, your customers may need to wait for days while your sales team liaises with various departments to determine what’s viable and create a quote that reflects the work involved.

Today’s customers don’t want to wait. And now they don’t have to because one of the significant CPQ benefits is that salespeople can create and share sales quotes at the click of a button.

While this is the most basic function of CPQ software, contemporary offerings go much further to improve the customer experience. Let’s examine the pros of CPQ software and how CPQ benefits your organization.

The Benefits of CPQ

CPQ advantages allow your sales team to spend less time on administration and more time interacting with customers. Instead of dealing with a mountain of Excel spreadsheets, they have automated instant quoting at their fingertips.

The benefits of CPQ software also extend to the customer’s purchasing process. So, here’s a breakdown of how CPQ’s competitive advantages can lend themselves to your digital transformation.

Protect Deal Margin

Every organization has a set deal margin to determine its profits on its products and services.

Unfortunately, inaccurate quoting can cause this margin to erode. If a customer is provided with an incorrect quote that fails to reflect the various add-ons requested, your business has a choice: either increase the quote and upset the customer or eat the loss.

CPQ software ensures this never happens because of its advanced engine that accounts for all of the requests a customer might make and provides quotes based on specific needs.

Improve Efficiency

Did you know that 40% of sales teams still need to achieve their goals in 2023?

Your sales team might work hard, but are they working smart? Losing customers at the last second often occurs because of a glacial sales quoting process.

CPQ software streamlines the process by ensuring agents have all the necessary data at their fingertips to provide an accurate quote. Moreover, CPQ software creates consistency across your organization by guaranteeing this same data is available to all relevant personnel.

In other words, you can make “Let me get back to you on that” a thing of the past.

Improve Accuracy

Inaccuracies lead to a poor customer experience. If you return to a customer with an updated quote explaining that you made a mistake, expect it to leave a bad taste in their mouth.

Your process must be perfect every time because as many as 86% of customers will abandon a brand after just two bad experiences.

Although humans make mistakes, this can cost your business hundreds of thousands of dollars. CPQ is designed to remove human error from the equation by delivering accurate quotes you can rely on every time.

Improve Customer Satisfaction

Customer satisfaction is the most critical battleground in modern-day business. That is why contemporary CPQ suites contain various tools to enhance customer satisfaction. So, it should be no surprise that companies using CPQ software see a 17% higher lead conversion rate.

CPQ software improves customer satisfaction rates through several techniques, including:

• Accurate quoting
• Self-service purchasing process
• Faster contracting process
• 3D visualizations of their orders
• Personalized service

Remember, 89% of consumers have said they will switch to a different brand if you don’t provide the service your prospects expect, making a CPQ an excellent part of your customer retention strategy.

Minimizes Quote Time

CPQ solutions reduce the time needed to create quotes. With set rule parameters and dynamic pricing as the customer builds their order, customers can receive instant quotes to inform their purchasing decisions.

Faster quoting also increases your overall quoting capacity because your sales team can skip meetings and manually provide data to decide on a quote. After all, the data is already there.

The core of CPQ is that it largely sidelines the human resources aspect of providing accurate quotes fast. Additionally, this means your personnel can spend more time building relationships and attracting more business.

Reduced Training Time

Sales rep turnover is significant, with some agents leaving organizations within two years of joining. Some industry estimates state that it can take 3.2 months to fully train a new addition to the team, followed by a long period for them to get up to speed.

That is a drain on your resources, which is why CPQ is such a powerful addition to any business. Since CPQ is a constraint-based engine, it can automate your sales team in designing and building complicated solutions for your customers with little to no training required.

By equipping your organization with an intuitive user experience, you can easily upsell and cross-sell items your agents may be unfamiliar with.

Apply a More Consistent Approach

Larger organizations can benefit from more consistency in their practices. Ideally, every sales rep would follow your company’s most effective practices to land new business. However, with varying competencies, this is easier said than done.

CPQ systems provide the data you need to capture and apply best practices from day one. That also applies to your newest and least technically-minded agents.

Every rep will also have access to the same data at their fingertips, which ensures everyone is on the same page.

Enjoy a Fast Return on Investment

Incorporating any new tool into your organization requires a sizable investment. Before deciding whether a solution suits your organization, you must crunch the numbers.

The advantage of CPQ solutions is that they are designed to deliver a fast return on your investment by enhancing your quoting capacity, increasing your conversion rate, reducing your cost of sale, and eliminating quoting errors.

It’s these benefits of CPQ that are convincing more and more companies to invest in it. To date, 83% of sales professionals are now using some form of CPQ.

Enjoy the CPQ Competitive Advantages with Tacton

Not all CPQ solutions were created equal. Essential tools may provide instant quoting capabilities, but these need to fulfill the true potential of what these systems offer. At Tacton, we focus on delivering innovative tools that push your capabilities to the limit.

Some of the added features you can take advantage of to enhance your competitive edge include:

• 3D Visualizations – Allow your customers to see the products they build in real-time. They can rotate, angle, and see their order from every angle before they spend a cent.
• CAD Generation – One-click generation of 2D and 3D CAD drawings for every product variant you can submit to the customer and different departments.
• Document Generation – Automatically create documents for quotes, certifications, technical specifications, and more.
• Administration – Make your front and back office even more effective with data management tools, sales, workflows, and approvals.
• Analytics – Benefit from custom analytics to feed your business intelligence to improve your offerings and how you serve your customers.

Quoting and constraints-based systems are just the beginning. Tacton is designed to change how you operate to drive performance enhancements using every conceivable metric.

Implement CPQ with Tacton

The benefits of CPQ extend to every aspect of your sales process. You can improve your sales team’s operations, reduce errors throughout the process, and bolster the customer experience by letting your prospects operate independently.

In short, you can move faster and more efficiently without compromising the accuracy or quality of your services.

So, what are you waiting for? Discover the power of Tacton and join leading manufacturers by scheduling your free demo today!

Our Chief Executive Officer Bo Gyldenvang discusses the milestones and achievements we’ve seen at Tacton as we celebrate our 25th anniversary and takes a look into where we’re heading next!

This year marks a very special occasion — Tacton is celebrating 25 years as manufacturing’s Configure, Price, Quote (CPQ) leader.

In 1998, Tacton’s founders saw a massive unmet need for manufacturers of complex goods and heavy machinery: the need for customization, along with a growing number of interdependencies. Understanding this core challenge facing manufacturers, Tacton introduced manufacturing-specific CPQ technology to the market, bringing efficiency, sustainability and profitability to product variability.

We were innovative and groundbreaking then and remain groundbreaking today. Since Tacton’s founding, we have grown from a Swedish configuration management startup to a global CPQ SaaS vendor, with customers including international manufacturing companies such as Siemens, Xylem and ABB. With 75,000 active users of Tacton licenses today, Tacton customers, on average, see a 34% increase in efficiency, a 30% increase in sales volume and boost their profit margins by 20%.

I’m proud to look back at just a few of the innovations Tacton has brought to the market, with a glimpse into what I see coming up next.

Serving our customers’ need for less complexity

Our clients and employees make us who we are today — as customer needs have evolved so too has our technology. One thing has remained constant, which is where we shine: Companies want less and less complexity. They want to get someone in to support their business requirements. They don’t want to think about all the nuts and bolts about their IT platform.

We make it as easy as possible for manufacturers with high product-complexity needs to run CPQ workflows and, as a result, improve their business outcomes, including profitability, revenue growth and greater efficiency. What’s more, this value gets passed down to our customers’ customers, enabling them to simplify and grow their businesses as well.

Our customers don’t want to use general CPQ software because they don’t want to compromise. They work with Tacton because we are born and bred in manufacturing. It’s why Gartner has named us a Leader in the 2022 Magic Quadrant for CPQ Application Suites.

As we reflect on this 25-year milestone and look forward to the future, we remain committed to pushing the boundaries of innovation to deliver what our clients need, even before they realize they need it.

Sustainability is going to be more and more important over the coming years. Just as important as the pricing and total cost of ownership (TCO) of a product, complex manufacturers need to adopt a sustainability perspective when configuring products to give their customers an improved understanding of the environmental impact of the products they’re procuring.

At Tacton, we prioritize transparency about the environmental impact of every single component that is used to make a product and offer the ability to change the makeup of end goods to be less taxing on the climate. As sustainability regulations and expectations from consumers and investors alike increase, we know how essential it is to meet every company’s needs and desires to reduce environmental impact and achieve their sustainability goals.

Another burgeoning area we’ve already helped manufacturers jump on is selling products as services. Just as the software industry has gone from an ownership-based model to a SaaS-based model, manufacturers are increasingly shifting to selling their products and services as subscriptions. It’s what customers want across industries — whether B2C or B2B.

And it’s great for companies too, helping generate predictable revenue and business success even in uncertain times. With Tacton’s subscription-based technology and service solutions, manufacturers can ensure smooth and resilient end-to-end operations while delivering a flawless digital customer experience when selling complex equipment and related services.

What’s ahead for Tacton

Tacton has been a leader for 25 years. And with consistent recognition from our customers, influencers in the manufacturing sector, and global research powerhouses like Gartner, we expect to stay a leader for the next 25.

While other technology vendors are starting to prepare their platforms for what’s next, we’re already ahead of the trends we see in the market today, including sustainability and the move to subscription models. We’re decades ahead of what any generalist vendor would be able to provide in the industry, bringing our manufacturing customers into the future. 

We invite you to join us as we shape the future of smart manufacturing technologies for the next generation of manufacturers.