Low-code for tailored pricing and quotation applications

02. Evolving Buyer’s Journey

Meeting buyers where they are: the new B2B buyer’s journey

In addition to macro-level disruptions, the way customers buy has changed dramatically. Today’s B2B buyers have sky-high digital expectations due to increasingly seamless B2C experiences. Additionally, buyers are spending less and less time with sales, so the time they do must count. Firms that fail to innovate in this area will quickly lose competitive ground.

B2B buyers are consumers of a wide variety of digital products and services. They shift rapidly from buying toilet paper on Amazon to listening to Spotify while researching a business challenge they’re hoping to solve with your products. There are no clear borders between B2B and B2C digital experiences in their mind.

This challenge is compounded by the increasingly digital B2B buying process. Research from Gartner underscores just how much things have changed:

• Sales reps have roughly 5% of a buyer’s time during their B2B buying journey

• 27% of buying time is spent researching independently online; 22% with the buying group; and 18% researching independently offline

• 77% of B2B buyers state that their latest purchase was very complex or difficult

Additionally, “buyers value suppliers that make it easier for them to navigate the purchase process.”⁷ Customers who perceived the information they received to be helpful were 2.8 times more likely to experience a high degree of purchase ease, and three times more likely to buy a bigger deal with less regret⁸.

Customers expect fast turnarounds and easy to understand proposals – provided to them through a seamless digital experience. The pressure is on to create better buying experiences that build trust and help customers realize value at every step.

03. Opportunities

Increasing competitiveness through innovative process digitalization
– in Sweden and beyond

In spite of - or even because of - the rapid pace of change, new opportunities are emerging. Manufacturers are free to take bold action to enhance the customer experience by improving operations. Leaders are taking control of key processes like quotation management to supercharge employee productivity and build trust with customers.

B2B buyers are consumers of a wide variety of digital products and services. They shift rapidly from buying toilet paper on Amazon to listening to Spotify while researching a business challenge they’re hoping to solve with your products. There are no clear borders between B2B and B2C digital experiences in their mind.

It’s true: Swedish manufacturing companies have been accelerating their digital transformation efforts. But not equally across the business. In the race to realize Industry 4.0 and enable servitized business models, crucial internal processes like Configure, Price, Quote (CPQ) are ignored. For many, CPQ, a part of the quotation process, is too complex and burdensome, dragging down sales and causing the business to lose revenue.

Boosting productivity and reducing operational inefficiencies are key to protecting shrinking margins and improving the buyer experience. To achieve those ambitions, leading manufacturers are reimagining the quotation process.

As the world struggles to regain its footing after the pandemic in the midst of geopolitical conflict and widespread uncertainty, smart enterprises are seizing their differentiation by using technology to simplify and enhance their quotation process. Turning pricing and quotation into a strategic function vs. a tactical one isn’t easy, but the right approach can make all the difference.

04. CPQ – What is it and why so important?

Quotation management applications: Manufacturers’ new competitive edge

The quotation process is a critical component in manufacturing competitiveness.

CPQ, and the quotation process more generally, is so important because it’s where “the rubber meets the road” in commercial operations. Simply put, it’s how manufacturers sell and get paid. But even though it’s something so critical, the way quotations are managed has often been allowed to remain unoptimized.

One well-known aspect of quotation management is Configure, Price Quote (CPQ). According to Salesforce, CPQ can be defined as “a sales tool for companies to quickly and accurately generate quotes for orders.” Further, “Quotes produced with CPQ software are automated according to a preprogrammed set of rules, ensuring error-free pricing that takes into account quantities, discounts, customizations, optional features of products, multiple revenue types, and incompatibilities.”¹¹

CPQ is a sub-process of Quote to Cash (QTC), and each organization may have a slightly different approach or use different terminology. Each term describes an aspect of what is generally known as the quotation process. Though not exact equivalents, we use CPQ, quotation process and quotation management somewhat interchangeably throughout this eBook. The flowchart in Figure 1 provides a look at a simplified version of the traditional quotation process. Note that there are many additional processes involved, including input and output from legal, compliance, finance, supply chain, and technical / engineering.

Quotation Process Overview

05.CPQ – What happens when it goes wrong?

When CPQ goes wrong: pain points where productivity and customer experience suffer

There are good reasons why many manufacturers struggle to optimize their quotation process. The number of people and systems involved inevitably makes the process manual and complex.

CPQ is one of those problems that technology should have solved by now. And while we’ve come a long way since early product configurators of the 1980s¹², most organizations are nowhere near ready to claim victory. Why is quotation management still so hard?

First, even if aided by technology in some way, CPQ at many organizations is still too manual, complex, time consuming, and error prone. Today’s products are more complex than ever, with ever-increasing opportunities for customization. This often causes salespeople to jump from system to system to pull together the right information – from PLM, CRM, and ERP – and even then, it’s still possible to build a quote for a product that could never be sold due to a configuration error.

Then there’s pricing, which is just as complex (if not more so) than product configuration. Taking into consideration master list prices, modifying them by local / regional pricing, then layering discounts on top (which often require approval) makes for a tangled mess. Pricing that isn’t adequately tailored results in lower margins – leaving money on the table.

And if only the salespeople themselves needed to see what was happening throughout, that would be difficult enough – but management also needs visibility to ensure proper approvals and reporting. Without a single system, quotes are in various states of partial visibility and accuracy, resulting in costly inefficiency and increased compliance risk.

All of this complexity and manual shuffling of information means that the customer gets a quote eventually. But, it might not look great or be 100% accurate. And most importantly, the delays could mean that by the time they receive it, they’ve already decided to work with a competitor. There has to be a better way, right?

06. CPQ dream state

Creating the ultimate quotation process (that customers will love)

When you design your quotation process around what will create the best buying experience for customers, you’re playing a different game. A game where everyone wins.

As the research from Gartner we cited earlier suggests, it’s simply too hard for customers to buy from you. Much of the fault lies with the broken quotation process we just described. Let’s look at the problem, or opportunity, from a different angle: what do customers want and need from the quotation process?

1. Speed.

   This is the most important factor in today’s marketplace. Since many manufactured goods are similar, customers will often choose the supplier who gets a quote back to them first. Time is money – both for you and the customer.

    

2. Efficient, seamless interactions.

   If a customer knows that you already have their information on file, it is frustrating to ask for it again. Or if a particular configuration isn’t available, customers should know immediately so they can adjust their purchase. Leveraging integrations to streamline data and interactions for both sales and the customer is a huge competitive differentiator.
   
   

3. Consistent, uniform experiences.

   Both the quote (as a digital asset) and the entire CPQ experience itself are experiences that influence brand perception. These touchpoints either build or erode trust. Everything should look and feel professional and consistent throughout the buyer’s journey.
   
   

4. Tailored discounts.

   No salespeople like to give discounts, but most customers expect them. By ensuring that discounts automatically take custom factors into place, you can optimize margins for yourself while providing the customer something they should perceive to be fair based on their market and circumstances.

What happens when you create a customer-centric quotation process? You win too, of course. Here are the results you can expect:

• An increased total number of quotes, which boosts orders
• Increased revenue and market share
• Sell more products with higher margins
• Enjoy shorter sales cycles and higher sales quota achievement
• Higher customer satisfaction and increased brand loyalty
• Increased control over forecasting, cash-flow and profitability
  
  

Now let’s talk about how to get there.

07. Low-code CPQ solutions

Why leading manufacturers choose low-code CPQ solutions

In the classic debate between “build vs. buy,” manufacturers are realizing there’s a powerful third option that offers the best of both worlds. Low-code development is revolutionizing the way businesses solve problems using technology and offers the key to the next generation of quotation management applications.

What if the way you harnessed technology to drive your business forward didn’t have anything to do with the size of your IT department? What if the needs of your customers and employees – real business needs – drove the development of unique applications, and not the myopic view of “what’s feasible” given budget and resource constraints, which will only intensify? Does this sound too good to be true?

More and more manufacturers are seizing their competitive edge through low-code app development. Low-code is especially effective for the quotation process because it makes it simple to integrate with all the relevant systems – without having to reconfigure those systems (great for organizations that don’t have a huge IT department or consulting budget). Low-code apps sit like an agile layer on top of the systems you already use every day, pushing and pulling data seamlessly without an army of software engineers needed to keep it running.

Low-code is the best of both “build vs. buy” worlds because, with the right platform, you get all the benefits of “buy” – scalability, user-friendly design, low maintenance, cloud hosting – with all the benefits of “build” – a perfectly tailored custom application that does exactly what you want it to without any compromises.

Low-code also smooths out the downsides of both sides of the “build vs. buy” coin. Choosing to “build” the traditional way – using developers to code an app from scratch – is very expensive and resource intensive, both up front and over time as needs evolve. Low-code is much lower cost, both initially and to update as the business grows. Low-code also sidesteps the negatives of “buy” – typically when you get something off-the-shelf, you end up paying for features you never use, and it’s never quite a perfect fit no matter how hard you try to customize it.

But don’t take our word for it. Learn why the biggest manufacturer in Europe decided to use a low-code approach for its quotation management application.

08. Siemens business case

Driving competitive edge at Siemens

One stunning example of how manufacturers are taking control of their quotation process using low-code is Siemens. A global leader who develops software themselves, they decided to use Flowfactory’s low-code platform to build their quotation management app – and the results are incredible.

Instead of starting the story of Siemens’ low-code journey at the beginning, let’s jump to the middle. As a digital transformation leader, Siemens didn’t just offer those services to customers, but lived it internally. In order to accurately measure the progress they were making on digital transformation within their own walls, they needed a standardized KPI to help them compare apples to apples. This would help them identify what was truly effective across their sprawling global organization.

This new KPI powered analysis uncovered some surprising results. One business unit in one country scored off the charts. Everyone was wondering: how did they achieve such high scores?

Now, back to the beginning. Siemens Digital Industries in Sweden knew their quotation process was holding them back from reaching greater heights of sales productivity – which impacted the customer experience. They examined their options and carefully considered the resources at their disposal, which were extensive. And then they did something surprising.

Siemens chose to work with Flowfactory, a leading low-code development platform provider, to build their quotation app. Business users kicked off the project without IT help, and before they knew it, over 1000 sales executives were using the application to send over 1000 customer quotes every day in 12 countries – increasing to 30 by 2024. Instead of jumping from system to system, salespeople have one streamlined application that perfectly suits their needs – turbocharging their productivity. Customers love getting quotes that look great and are ready fast.

If that was the end of the story, that would be enough of a reason for every manufacturer to use low-code to replicate Siemens’ success. But it gets even better.

Further analysis revealed that development projects using Flowfactory are 10 times faster and cost only 1/10 of similar projects.