Manufacturers looking to increase profits in 2023 have to sell their products online. If not, they’re only scratching the surface of what they can achieve in revenue. They’re limiting their reach in terms of where they can sell their products and who they can sell them to because a significant portion of buyers won’t even consider buying from a manufacturer with a high-touch sales process.
For manufacturers selling complex configurable products, selling online isn’t easy. Letting customers configure products independently seems daunting–a surefire way to create havoc in the engineering department and on the shop floor. But it doesn’t have to be this way.
CPQ for eCommerce streamlines the online sales process by automating much of the configure, quote, and order process. But the benefits don't stop there. It can also improve conversion rates by providing personalized product recommendations and making it easier for customers to find and purchase the products they really want. It enhances the customer experience by providing a more intuitive and immersive buying experience, attracting new buyers, and increasing satisfaction and loyalty.
This article will delve deeper into the meaning of a CPQ for eCommerce and how this transformative tech can help boost your business's bottom line.
CPQ stands for (configure, price, and quote.) It’s a software solution that guides the user through the product configuration process, automatically calculates a price for the configuration, and instantly generates a good-looking and persuasive quote. It’s a game-changer for manufacturers struggling to serve their customers efficiently and without mistakes.
The modern CPQ system has moved on leaps and bounds in recent years. Leading solutions like Epicor CPQ provide far more functionality than their traditional CPQ cousins. They’re designed to make it easy for manufacturers to sell complex products online and off.
One of the critical differences between best-in-class and more basic CPQ solutions is how they handle the configuration process. Modern CPQs display configurable products in 3D and let users interact with and configure products visually using a visual product configurator. It’s a highly intuitive drag-and-drop process that anyone can use.
Manufacturers can embed their visual product configurator into their website, enabling visitors to self-learn, self-configure, and self-serve, all without the help of a sales rep. Constraints programmed into the CPQ ensure every configuration is valid and the back-end sales-to-manufacturing process is entirely automated. This means anybody in the world, at any time, using any (internet-connected) device can come to your site and buy your products.
If you’re a manufacturer selling complex configurable products, you know it can be tricky to help buyers select the optimal configuration for their needs.
Traditionally, buyers had to rely on a static image of a product or prototype to arrive at a decision. Buyers had no surefire way to analyze the final design, present it to the buying committee, or access configuration information in real-time.
When buyers have access to your CPQ via your website, they can quickly view and select configurations, obtain a price and quote, and arrive at a decision by themselves. Your sales reps can focus more on strategic aspects of selling instead of follow-up calls and going back and forth over email answering prospects.
If your online conversion rate is low, it might be because of a lack of confidence among buyers or an inability to understand configurations well enough to move forward
.CPQ systems can boost conversion rates by up to 40% (the average for Epicor CPQ customers). The reason? Modern CPQ systems have a built-in visual configurator that allows buyers to view a configuration in 3D, AR, or VR.
An immersive visual experience can have a tangible impact on the buyer’s perception of your product and eliminate the friction buyers experience when buying a product from a manufacturer for the first time. Buyers can study products closely from every angle until they’re 100% happy with their choices.
With CPQ for eCommerce, buyers and sellers are always aligned. The configurator creates a sort of visual contract–the buyer can be sure they’ll receive what they’re promised.
Visual configuration not only improves sales but dramatically reduces refund requests too. According to the B2B Buying Process report from Sapio Research, the most common errors causing B2B buyers to return a product are.
With visual product configuration, the above rarely occurs.
Accurate pricing is crucial for any business, but it can be challenging to quote buyers quickly and accurately using traditional methods. This is where a configure price quote (CPQ) tool comes in. A CPQ ensures that your quoted prices are always accurate, helping you avoid embarrassing consequences and shrinking profit margins.
CPQ for eCommerce brings the automation of CPQ pricing to your online experience. Visitors interacting with your configurator get pricing feedback in real time. They click on a different part or change a dimension, for example, and their price updates automatically. This gives them all the information they need to optimize their configuration in line with their budget and place an order on the spot.
The best CPQ solutions adjust their prices dynamically in response to internal factors–such as the availability and cost of parts–and external factors–such as current demand and competitors’ prices. You can confidently provide accurate and competitive pricing to your customers without making manual changes.
Most modern business tools run on the cloud. Integrating your cloud-based solutions allows them to exchange data and update records without manual work. Gartner estimates that over 95% of new digital workloads will be deployed on cloud-native platforms by 2025 for a good reason–the cloud offers tons of efficiency.
Cloud-based CPQ tools offer endless integration opportunities. First and foremost, they integrate with your eCommerce platform, allowing you to embed your visual product configurator into your website and take orders. But they also integrate with your ERP (for example, CPQ for SAP) and CRM, helping personalize the front-end experience and ensuring users are always working with the most up-to-date information (prices, inventory, lead times, etc.)
CPQ integrates with downstream engineering and shop-floor systems too. CAD integration can have a massive positive impact on your engineering department. Just like CPQ auto-generates quotes, it can also generate CAD files for configurations, saving hours of custom engineering and letting engineers focus on more meaningful and innovative tasks.
CPQ for eCommerce helps improve profitability on multiple fronts. It helps you sell more by improving conversion rates, earn more by accurately pricing configurations, and save more by increasing efficiency with automation.Of course, you’re far more likely to generate similar returns if you select the right system. Go for a CPQ system that offers the best-in-class feature set, including a visual configurator, dynamic pricing, and the ability to integrate with ERP, CRM, CAD, and more.