If you’re in the supply chain management horizontal, you know the importance of optimizing at every step: you’re looking for the best prices on the best quality raw materials, the most reliable fleet services and freight forwarding partner(s), and the most secure, cost-effective storage and inventory management provider(s).
And you likely know the ins-and-outs of closing deals with these partners and providers, and how critical CPQ solutions can be to optimize every deal made at every stage of your supply chain. You need to ensure you’re sending partners professional quotes, with “win-win” product and pricing configurations, and that you’re tracking sales proposals from start to signed.
What you may NOT know, or may not have yet recognized, is how the features and capabilities in your configure, price, quote (CPQ) platform mirror the steps in your supply chain. In our opinion, as CPQ vendors, they’re downright identical. Let’s dig in!
Sourcing raw materials / implementing your CPQ solution
Just like you need to start with the right raw materials in any supply chain — the right minerals or ore, the right lumber, the right metals, etc. — you need to start with the right raw materials in your CPQ solution.
Yes, this means choosing the right CPQ system: you want one that easily integrates into the business systems (CRM, ERP, accounting, and otherwise) you already use, and you want it delivered by a vendor who delivers every supporting service you require as well.
Additionally, it’s ideally during implementation when you “source raw materials”, such as sales proposal templates, and populate your system with ones that best suit both your brand and the markets you serve. This is the ideal time to tap the services of a professional designer and ensure your proposal templates are the best they can be, right out of the gate.
Assembling materials / creating a proposal
Welcome to the next step in your “sales proposal supply chain” wherein you build specific sales quotes for individual customers.
Just you like you would assemble raw materials at a machine shop or factory, this is the stage where it all comes together. But instead of combining metals and plastics, or lumber and paints, you’re combining products and pricing with templates and targeted pitches.
Your CPQ solution has a product and pricing configuration engine that makes adding your best-selling stuff as easy as drag and drop. (Ideally, your CPQ vendor has helped you populate this engine during implementation.) It’s almost like an assembly line: select a template, add products, customize for prospects and then… on to the next step!
Selling the product / sending the proposal
Ok, so most analogies have a hole or two: here’s this one’s. Because while selling a product is typically the most complicated and/or time-consuming step in the supply chain, sending the proposal is one of the simplest in CPQ. However, as a wise man once said, “But, wait: there’s more!”
The difference between using a CPQ solution to send your quotes and doing it with, say, a CRM, is that CPQ gives you more ways to track sales proposals along every step of the signing process (it’s kind of like a supply chain within the supply chain). There’s the initial sending, the revisions, the check-ins, the updates, etc. Most CRM systems don’t get this granular, but CPQ does.
Returns / Optimizing your CPQ solution and its proposals
Every supply chain needs to have steps for going backward, to a point; i.e., the return process, which can happen at essentially any step along the way. With CPQ solutions, what gets returned (other than signed quotes — boo-yah!) is information.
A dynamic solution, your CPQ software should learn from every quote sent.
What templates work best with what audiences? What product and pricing configurations may have seasonal cadences? What’s the right amount of “customer touches” to move a quote from sent to signed? All these metrics and more are returned to your CPQ system, allowing you optimize it just the way you’d optimize a supply chain.
Sourcing / implementing, assembling / creating, selling / sending, returning / optimizing: the parallels between what makes for an effective supply chain and an effective CPQ solution are many.
But in the end, both are really about establishing repeatable processes that speed throughput, reduce costs, and mitigate risks. And if there are three bigger benefits in doing business, we have yet to hear them.
