Companies attaining best practices in product configuration and quoting strategies share three common attributes:
- Intensely customer-centric
- A commitment to continually improving quoting and product configuration
- A culture that seeks out change
From the balanced scorecards used for measuring performance on these best practices to the continual testing of new programs, companies attaining best practices in quoting and product configuration have a passion for achievement and performance.
The following is a series of best practices that have emerged from research studies we have completed here at Cincom.
Best Practice 1: Consistency
Making quoting consistent across all channels to the pricing level is critically important and saves margin. For one globally known helicopter manufacturer, its quoting system is an island within marketing. Not integrated with pricing, manufacturing or service, this quoting system delivers elegantly prepared 100+ page quotes, yet the entire quote must be re-engineered by manufacturing and pricing. The rework time on validating quotes has cost this company business. If you have multiple quoting systems for each sales channel, consider consolidating them down to a single quoting system and integrating with pricing and manufacturing. It’s significant work upfront to do this and can take six months to a year, but it’s worth it as a long-term competitive advantage.
Best Practice 2: Integrating Data
Making quoting and product configuration history part of a data mining strategy to learn why prospects aren’t buying is even more important than customer purchases. Manufacturers in the heavy-equipment and truck industries write quotes on napkins and then transcribe them into Microsoft Word, sometimes rewriting the last quote with the current one in a Word template. At a minimum, look at how your company can create a historical view of quotes by customers. This history will prove invaluable to win/loss analyses and future selling.
Best Practice 3: Pricing Is King
One electronics distributor found that there was a different pricing database for online quoting versus telemarketing’s quoting tools, versus the direct sales force. The distributor’s customers realizing they could use the web to get pricing and availability, then call their telemarketing rep to get a lower price. Many manufacturers and distributors alike don’t realize their customers are playing them across channels for better prices due to each quoting system having a different pricing database or version of pricing tables.
Best Practice 4: Include Channel Partners
Getting order status, price exception management and guided selling to channel partners are the most requested applications in industries marked by high inventory turns. These three areas comprise more than 70 percent of the inquiries for one global PC manufacturer. Push order status out as the first application on a channel partner portal, even if it means delaying order management or any other applications. It will pay for itself in time savings for telemarketing reps. Pricing inquiries along with availability is a must-have, and if your company is like the PC manufacturer, accessories are a significant revenue source (more than 15 percent of revenue annually). Consider getting a guided selling application out on your website and linking it to quoting for up-sell and cross-sell reminders for sales reps.
Best Practice 5: Automate Pricing
Automating special pricing requests and integrating to quoting pays. One manufacturer of communications equipment has a staff of seven who handles pricing exceptions from their indirect channels, working with rules and constraints as defined by senior management for approving price drops on larger deals. Senior management must personally approve the largest deals. Moving from manually managing this process to automating it wins business and for one disk-drive manufacturer, netted out significant revenue increases at the end of every quarter just based on the savings on reaction time alone.
Best practices in quoting and product configuration rely more on integrating processes and systems than ever before—yet the results in additional sales, greater customer insights and customer satisfaction are well worth it.
Learn the value of being able to do “Real Business in Real Time” in this exclusive webinar from Cincom and David Meerman Scott.