Making B2B2C and mass customization strategies easier for manufacturers

Profile picture for user barb.mosher By Barb Mosher Zinck June 18, 2019
Summary:
CPQ for manufacturers - self-service tools to make customer lives easier.

Most of us have gone online to price a new vehicle. It’s pretty straightforward (most of the time). Pick the vehicle type and color, select an options package, maybe add in an extra option or two, and boom, get a price. It’s fairly simple if you know what you want. But go online to price a highly specialized medical device, a piece of manufacturing equipment or anything built to order that has a lot of options, customizations as well as operational rules, and it’s not so easy. Most of the time, you can’t do it at all.

It can take weeks to work with a salesperson to get a quote and order for a product like one of those mentioned above. Not only because you can’t do an online order but because there is often a disconnect between sales and the engineers who have to build the products to order.

This mass customization challenge is something the manufacturing industry has dealt with for a long time. But fierce competition requires a change, and there is software available that can help.

KBMax provides CPQ software that can help manufacturers reduce the time it takes to quote, order, build, and deliver a built-to-order product. The company started in 2009, and Kris Goldhair, Strategic Accounts Director at KBMax, was one of its first employees. He shared his insights into the challenges manufacturers face today and how CPQ solutions can help.

Dragging manufacturing into the digital age

First, a definition if you aren’t sure what CPQ software is:

Configure, Price, Quote, or CPQ, is software that helps companies accurately define the price of goods across a huge and constantly changing spectrum of variables.” (source)

There are a lot of CPQ solutions available, including Salesforce CPQ, CallidusCloud CPQ, IBM CPQ, and so on. This type of software is not new, but like most software, it has gone through an evolution that brings new capabilities to support their use not just by salespeople but also consumers directly.

Goldhair told me that many manufacturers are starting to look at B2B2C strategies to boost sales, selling their products through another business, and direct to consumer. Advances in CPQ automation technologies are supporting that approach, enabling industries, like manufacturing, to sell direct to customers in a way they never could before.

The idea is to help salespeople or the customer configure a product that is in alignment with the manufacturing specifications through an ecommerce, CPQ experience using features such as a full-featured rules builder, 3D visualization, CAD automation and integration with Salesforce, Oracle and other software vendors.

Snap your rules into place

KBMax Snap is a visual rule language that a company uses to build its configuration tool. The person who understands all the rules necessary would use Snap to create all the options a customer can select to custom built their product. The image below shows you what the rule builder looks like.

If you have a complex product with a lot of options, it will take some time to set up the configurator, but there are a lot of features that make the setup process easier (like debugging and validation). Once it’s set up, the result is a 3D configuration tool that any non-technical user can use to build the product they want. It’s a lot better than a spreadsheet of options which, according to Goldhair, is what many manufacturing companies tend to use.

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KBMax Snap visual rules writer

One example Goldhair talked about was Tuff Shed, which makes build to order sheds. You can go on the Tuff Shed website and using a configurator (built with KBMax), build and price the shed you want to buy.

For KBMax, the goal is to allow at least 50% of people ordering a product to execute that order without any assistance. Right now, only about 10% of customers can do that.

For Tuff Shed, revenues increased when they implemented their shed configurator. Goldhair said that even Home Depot employees use it to configure the sheds for customers.

A CPQ tool like this one works best for discrete manufacturing, like heavy equipment or build to order products, where there are clearly defined rules and standards that you can apply.

A digital showroom is another good example. Even for brick and mortar stores, the idea of providing a way to show variations of products that are sitting the physical showroom is gaining popularity. Goldhair talked about how a furniture company with a flagship store in a location with little real estate can provide iPads for customers to look at custom fabrics, trim, and other options. Not only can the customer look at the options, but they can also custom-build the piece of furniture they want and order it right there.

Helping sales work smarter

Many manufacturers have been slow to understand that they need an innovative approach to selling their products. The way it often works today is that Sales have a quoting tool that is not connected to the manufacturing process at all. They take an order and pass it over to engineering which then has to fix it because they can’t build the product to the specs provided. There’s often a lot of back and forth until the right product customization is finalized.

Manufacturers need better tools for sales, and they need self-service tools for customers. Specialized software like CPQ, rules configurators, and visualization can reduce the time it takes to get a product to the customer.

My take

A B2B2C strategy is smart. It’s a way to reach customers directly, while at the same time working with other companies that sell your products as well. It’s a strategy that manufacturing is only getting started with, but with the right software, can be successful at it.

I don’t look at the Snap rule builder and think it will be easy to configure if there are a lot of rules and restraints. But for someone who knows their product intimately, it seems like a much better option than passing Sales a complicated spreadsheet that’s hard to understand.