For today’s B2B sellers, effectively managing dynamic pricing across numerous sales channels has become a major roadblock to growing revenue, or in some cases, even maintaining profitability.
There are plenty of reasons why pricing can be such a burden for B2B companies, including:
- The cost to serve customers has significantly increased
- Purchasing decisions are often made by GPOs, not individuals your sales team may have a standing relationship with
- Pricing has become more transparent and competitive as buyers now have access to data that allows them to compare price, product, and myriad other factors that influence purchasing decisions
- Buyer behavior has shifted as the people making purchasing decisions are no longer the actual users of your products, but rather procurement teams that strictly focus on cost as opposed to brand quality, recognition or other factors that don’t easily fit into a spreadsheet
Although complex pricing may be a contributing factor to your sales or other departments’ underperformance, there are resources available to optimize pricing and help you maximize margins.
Configure-Price-Quote (CPQ) applications provide organizations with the ability to manage pricing efficiently across all selling channels, including direct and indirect sales as well as eCommerce.
All too often, pricing management is a manual, reactionary exercise. For sales teams operating with the same Microsoft Excel program they implemented back in the mid-90s, manual order and pricing errors create problems that eat into profits. When it comes to determining price, a lack of current data forces sellers to capitulate to the customer rather than rely on data to determine what the price should be to be profitable.
CPQ Streamlines Pricing Processes for B2B Sales
With CPQ, sellers are able to source pricing data from across the organization, manage and maintain that data from a single location without having to go through the arduous process of updating and distributing spreadsheets, and engage with customers with confidence knowing they are presenting the best possible price.
How does CPQ make this happen? Backed by a powerful data modeling engine, leading CPQ solutions can manage hundreds of thousands, even millions of variables, and rules can be sourced, rationalized, and made available across the ecosystem to ensure even the most complex product or service or bundle is configured, priced, quoted, and delivered quickly, accurately and to specification.
It all comes back to using a powerful data modeling engine paired with a logic-based application. With a relational database model that is separate from the application layer, users can add new products, options, rules, etc., and further define the solution independently without the need for custom coding.
Benefits of CPQ are Felt Across the Business
Not only does this newfound ability to more profitably manage pricing impact sales, it affects your entire organization, from marketing, manufacturing, legal and compliance, all the way back to the customer.
By taking a proactive approach to pricing, as opposed to a reactive one, you can become a pricing master, better matching products and pricing to the customer while more effectively determining pricing for new product rollouts.
Businesses can also become more dynamic when addressing changes by managing the data from a single pricing source as opposed to disparate databases and countless spreadsheets - making it much easier to handle compliance, governance and other factors that require cross-organizational consistency. With this centralized data, CPQ’s built-in predictive analytics engine can provide algorithmic pricing models as opposed to error-prone manual processes.
With CPQ, your business has the insight and information it needs backed by data to make informed decisions. No longer will your sales reps wade into a bad deal where price erosion kills profitability. With a clearer pricing structure, your customers will come to trust and rely on your sales people, turning them into loyal, long-term buyers.
There’s plenty more to discuss pertaining to CPQ for B2B sales and eCommerce. At FPX, we relish the opportunity to share our insights and knowledge gleaned from more than 30 years in the CPQ space.
To learn more, subscribe to our blog, or to speak with us directly, contact us by completing the form on our website.