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. 

At Tacton we’re always learning about our manufacturing customers. To learn more about the latest in manufacturing we’ve conducted our annual State of Digital Manufacturing Survey. We conducted this to better understand the priorities, pain-points and initiatives manufacturers will take in 2023 to better serve their customers.  

In order to help manufacturers, stay at the forefront of these developments, we’ve released this report. We’re focusing on how manufacturers are building resiliency to ensure smooth end-to-end operations. Let’s look at some of the highlights from the report. 

Methodology 

The results in this report are from an online survey that was fielded from November 10th to 29th, 2022. There were 200 survey respondents from North America and Europe. 74% of respondents were at the managerial or executive level.  

What best describes your manufacturing sector?

Digital transformation 

Digital transformations aren’t easy, they require time, effort, trial and error. But with big challenges come big risks of lagging behind the competition. Those that are well into implementation may find it easier to handle the upcoming economic challenges by having new processes in place.

How important is digital transformation to achieving your business goals in the coming year?

2023 priorities  

We asked manufacturers when they anticipate the next U.S. recession will begin. 47% believe it has already begun and a large majority believe it will start some time in 2023. Many manufacturers are bracing for a recession in the upcoming year. 32% of manufacturers have started the process of accelerating their digital transformation efforts.

How have recent uncertain economic times impacted your digital transformation efforts? 

Sustainability planning 

Sustainability in manufacturing has been discussed for years. But now manufacturers are realizing that it’s time to act and create easy ways to report and sell sustainably.   

Strategic agendas based on sustainability are being driven by customer demands for transparency around the products they purchase. Price is no longer the most important factor to many customers; they want to know how their product will affect the environment. Just look how much climate impact information questions have increased in the past year.  

How have requests to provide information about the environmental or climate impact of your products changed in the past year? 

With regulations and transparency requests from customers manufacturers need to find new and innovative ways to deal with these challenges. 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.  

These regulations range from carbon neutrality to waste management and even the use of renewable energies. Measuring and managing sustainability impact will be critical for the long-term success of manufacturers. 

The next step 

Manufacturers have dealt with uncertainty, challenges and new customer demands at a rapid pace. That’s why many have started their digital transformation efforts to deal with upcoming economic challenges and sustainability initiatives around the globe. Manufacturers who turn these challenges into opportunities will find new market share and drive customer loyalty. Check out the full State of Digital Manufacturing survey here to find out what other initiatives manufacturers are focusing on!  

Putting the customer at the heart of the sales process sounds like an easy thing to do right?

Many companies have different ways to reach their buyers but still fail to make successful impressions on them. This is a common occurrence in the manufacturing industry where highly individualized industrial products are sold daily in a mostly in-person setting with a sales executive.

Now that B2B buyers do most of the research (57% according to Accenture) and purchasing online it’s important to offer them the products where they are buying them and quickly. But offering them products quickly isn’t the most important part of an omnichannel experience. Customers want self-service, they want all the relevant information on hand before they even think about purchasing your products. Your buyers want to see the full range of your offering by using a configurator and visualization technology to see the product they want.

For all the worried salespeople reading this, don’t worry your job is still critical, but it’s important for your company to offer ways to eliminate the tedious processes that impede sales.

In-person selling is a proven way to sell directly to a customer, but with B2B buyers taking more time than ever to weigh their purchases it’s important to find a new way to reach them. This is where manufacturing could take a page out of the retail marketing playbook.

Once eCommerce became the main way customers bought products many retailers made products available via a website and mobile apps. Now more than ever manufacturing companies need to use an omnichannel experience to reach these customers, something that manufacturers who want to be more B2B-based need to do, to digitize their company.

What is omnichannel experience?

An omnichannel experience offers your customers a seamless way to interact and buy your products across multiple channels at any time, this allows for your business to be in touch with them throughout the buying journey.

 

What does an omnichannel manufacturing experience look like?

This is an important way to sell products in the manufacturing industry but how can it be done with products that are highly individualized and configuable?

To truly have an omnichannel experience it is necessary to simplify the sales process. As products have become more complex to build the longer the sales cycle has become. From the back and forth between sales and engineering to get orders right to building a unique item it can take a lot of man-hours to sell a product. This slow process needs to change to sell faster and enhance the customer experience.

The first step before a buyer contacts your sales team is researching your product offering. If you don’t have a place to showcase your unique products you will lose business to a company that can. This is where it is important to offer items such as a configurator and visualization right on your website. Buyers don’t want to have meetings in their initial stages of buying, they want to see how the product would look and feel.

Selling can be easier when you understand the tendencies of your buyer, an omnichannel selling experience allows for you to be with them at every touchpoint along their journey. Adding something like a built-in configurator will be another reason why they’d choose your business over the competition who can’t show them their product on their phone or the comfort of their own home. 

An omnichannel experience for your customer can also help align the goals of your sales and marketing teams. Having an omnichannel presence can bring marketing and sales closer by leveraging the data from your customers into results.

Allowing your customer to reach out to a sales team member at any point is important for several reasons. Understanding which channel, the customer has come from can help your sales and marketing teams engage them with similar content or messaging as the channel they came from. This allows your sales rep to have all the information about the customer before they even walk into the sales meeting, helping them prepare the perfect pitch.

If you want to learn more on how Tacton CPQ Omnichannel can reinvent the go-to-market  – even for highly individualized industrial products – head over to our web page or schedule your personal demo today!