Finding the Best CPQ Software for Microsoft Dynamics 365 Business Central
If you have spent any time in the world of sales, you have undoubtedly run into stress when it comes to rendering quotes. When a business has customer-configurable products, quotes can be difficult; the variants available for a given product, the more the prices of said products tend to change. In the past, this process would’ve been delegated to an employee, despite the chance of inaccuracy and slowed pace. Enter CPQ software … but what is it, and how do you decide on one?
What is CPQ?
CPQ stands for…
Configure
Price
Quote
This acronym is in reference to a software that allows complex quote generation with three main goals in mind… Efficiency, Productivity, and Profitability.
Implementing this software is a surefire way to boost the morale of your sales staff. It decreases their margin for error exponentially, as well as speeds up the whole process. This improved buying experience keeps the customers happy which is paramount to the success of the sale, and the overall health of the business.
How Does CPQ Software Work?
As you may have already guessed, CPQ (like the name suggests) is a three-part system. The main purpose is simply to streamline the sales process, reducing error and maximizing profit. Now, let’s break down and go over those three prongs separately.
The “C”
Configure refers to the process of analyzing the needs of the customer and providing a customized list of products that suit their needs. Quite a few businesses offer these products, and when requested, need to be able to be ordered based on that analysis. Regardless of how its accomplished, this system is typically a huge benefit to the customer. The downfall is that it is typically a tedious process that places a lot of stress on the salesperson. Through the help of guided selling features, base product models, and manifests of preferred options and configurations, CPQ software automates this process. This revolutionary technology will change the way you do business.
These tools allow you to render complex product presentations customized to fit the customer’s specific wants and needs. It provides a user-friendly interface that reveals each step of the process from the construction of the deal to the finalization. It’s as simple as implementing the use of CPQ. You can eliminate human errors, speed up production, and maximize profit, which is allows any business model to flourish.
The “P”
Price is arguably the most sensitive aspect of any deal. Time can kill any sale, but that risk is nullified with the use of CPQ software. This streamlined system will enable you to present the customer with all the data they need to make an educated decision, and hopefully a purchase. In addition to the configuration of a customized product selection, the software allows prompt and precise quotes. With the complex pricing of many products offered, this will save invaluable time with the customer. Enabling you to close the deal while the deal is hot! Here are the different ways CPQ software tackles your pricing needs.
Attribute-based: This is used when the cost of an item is subject to change based different characteristics like size or fit-and-finish. These are just two examples, but these pricing anomalies are transparent to the buyer during this phase due to the configuration of the list from the previous step. With this info at hand, the salesperson can concisely and confidently propose the perfect package for any customer.
Customer-specific: This method of pricing provides a predetermined pricing structure that is customer-specific. This is a usually a negotiated rate based on a discount off the retail price of the product.
List: Perhaps the most basic method is List pricing. It’s a straightforward process of referring to a price sheet or book to provide the customer with pricing. A salesperson may even have multiple sheets to reference based off regional differences in pricing.
Cost + markup: This is common in reselling. It is a culmination of the product’s cost, and a percentage of markup added by the seller to create the final cost of an item. This is helpful when companies want to maintain a standardized profit margin across the board.
Percent of total: Also known as dynamic pricing, this approach determines a sell price by adding the cost of an item, to a percentage of profit from other additional goods. In certain circumstances, CPQ can automate the calculation of dynamic pricing. This is typical in support and maintenance services.
Volume: Think bulk. The more you buy, the cheaper the unit cost. This method of purchasing isn’t for everyone, but for those who can require larger inventories, volume pricing can be a very cost-effective way to accommodate certain businesses.
Term: This form of pricing is common in recurring revenue products. Prices change according to how long the contract term lasts. Rates in a two-year contract may differ from that of a one-year contract.
Block: This is the method of selling your items in units of bulk quantities. The price is the same regardless of the buyer’s actual consumption of the product. For example… a customer buys a phone card with five hundred minutes. They’ve paid a set price for that card no matter how many of the minutes they use.
The “Q”
Wrapping it all up, there’s the Quote. In this step the customer is shown the broken-down cost of doing business. This is a pivotal part of any sale, as it sums up the efforts of the salesperson and the value created in the product, and exemplifies the professionalism and accuracy put forth during the deal. In addition to the salesperson, it says heaps about the company itself, and the quoting process is a great way to put a personal touch in the way you present numbers to a buyer.
When dealing with configurable products, the quoting process can get complicated. Due to the complex nature of configurable products, this step can quickly get complicated. Quoting is a part of the sale with a high probability for error, and because of this it can be tedious to compile and revise in an accurate manner. Having said that, CPQ software delivers a clean and efficient way for a business to perform this task. Using automated systems, it can generate customized quotes and deliver them to the customer in a user-friendly platform, as well as change details about the deal structure up to the last minute.
Who’s Currently Using CPQ?
CPQ software is diverse, and is attractive to many different business owners, for many distinct reasons. Different reasons get them in the door, but they all stay for the same… improved customer relationships lead to repeat business, and naturally, an increase in their profits. This is only accomplished because of the individualized touch CPQ software enables you to provide. Some examples of businesses and industries with configurable products and price variations may include heavy equipment manufacturers, apparel and fashion design companies, and high technology sectors.
In each of these examples, the products offered and the pricing of these products are subject to change. This change could be due to numerous factors. Some prices increase when the raw material prices go up. Other prices go down because the order is of sufficient size. Half of one order is going to cost “X” because it’s an eastern region destination, and the other half costs “Y” because it’s going west. The examples go on and on, but all to show the value of a software like CPQ.
Numerous other businesses can benefit from this software as well, including manufacturing, automotive, food and beverage, and media tech. However, it all boils down to this: If your business offers products that are subject to configuration in any way, and you have seen or can foresee stress and lost production and revenue due to the complexity of your “menu,” then CPQ is a tool that you should be employing. It streamlines the sales process and mitigates deficiencies and inefficiencies before they turn into problems.
What Are the Key Features of CPQ Software?
CPQ software can work integrally with CRMs and ERPs that you may already be using as a business owner. This way, all members of the sales team have access to the same accurate information, and eliminating the risk for error, ensuring a smooth road to the end of the deal. As a result, businesses are now able to increase customer satisfaction by providing them with custom proposals with a much higher level of accuracy than before.
CPQ software often comes with logic-based pricing and discounting capabilities allowing the construction and maintenance of complex rules and formulas set in place for pre-configured pricing. No matter which method of pricing you prefer, CPQ can handle anything you throw at it.
“It takes a village” … a saying that is never truer than in the act of presenting a complex quote to a potential buyer. Engineering, legal, finance, and of course sales staff, all have a roll in the generation of a quote. Reducing bottleneck between these departments saves time, and saving time saves money. CPQ has security measures and can prevent rogue discounting by setting thresholds for maximum discounts.
What Are the Benefits of CPQ Software for Businesses and Sales Teams?
CPQ software offers tangible benefits to the sales team, like money saved, money earned, and overall increased efficiency. No matter how badly he or she may like to, a salesperson running on a tradition sales process with manual quote generation, he or she will not have the customer relationship deserving of all the work invested. CPQ takes the stress from the salesperson, allowing them to flourish in their position. Furthermore, in sales, time is money. CPQ is automated, and very precise for such a hands-off system. Time spent doing other things and creating other lines of revenue are essential, and the extra time provided by CPQ surely won’t go unnoticed.
Which CPQ is Best for Dynamics Business Central?
As with most major ERP solutions, there are many CPQ software options available for Business Central. So, how do you decide? Start with this checklist to help you determine what you need in a CPQ solution:
- Handles complex quoting requirements easily
- Eliminates quoting errors
- Ensures maximum profits
- Improves quote-to-order speed times
- Triggers discount & other approval workflows
- Offers guided selling
- Creates bills of materials
- Extends to portals and mobile devices
- Has a single sign-on
- Supports a unified client interface
- Is easy to implement and maintain
Most importantly, your CPQ software choice should be proven to work well with Business Central. The best way to ensure this is to look to Microsoft AppSource for CPQ software solutions. Solutions published on AppSource have been vetted by Microsoft, so you can be confident in their ability to integrate with BC SaaS, as well as their stability and ability to stay current with updates to BC. In the end, you have to do your homework to determine the best solution for your company…and it’s worth it. The value of CPQ software could not be more clear. It simplifies the entire sales process, from pitch to closure. If you are looking for a way to improve your business’s sales process, CPQ software should be on your radar. It just might be the answer you’ve been looking for.
Are you ready to evaluate CPQ technology for your business? We work with reputable solution providers and can help you assess your needs to determine which one is best for your organization. Contact ArcherPoint today to talk more and schedule a personalized demonstration.