May 15, 2018

3 Things CPQ Must Do for B2B Services in the Digital Era

Next-gen CPQ offerings should be able to keep pace with enterprise digital needs in the fast-changing B2B market.

Maybe the most important question in any purchase is “what does this cost?” If referencing a simple product like a sandwich, pair of shoes or even an automobile, this question can be relatively simple to answer. But as soon as any product becomes slightly more complex, take mobile services, for example, the answer requires informed input from the customer and several calculations to derive an answer. Multiply this complexity by a larger set of B2B services and it becomes very difficult to present a friendly digital shopping experience to the buyer. This is exactly the problem service providers have faced for years in the B2B market, but the emergence of the digital world brings about a new set of challenges to address with the next generation of configure price quote (CPQ) technology. Here are three things CPQ must help service providers simplify across digital initiatives.

1. Multivariable Orders

Consider a massive order for mobile devices and services placed by a large enterprise customer. Across dozens if not thousands of users, the order must identify specific device types, appropriate rate plans and add-on services like device insurance. Variables increase as service providers layer in more cloud-based apps for everything from security to supply chain operations. Some devices will need access to these apps, some devices will not be allowed to access them and others will simply be ineligible, e.g. smartphone apps will not run on mobile hotspots. These combinations of available products and governance rules must be automated by the CPQ solution to simplify and apply important business controls to the sales and ordering process.

2. Custom Pricing

In consumer markets, mobile services tend to have set prices. They may fluctuate over time and may be modified with promotions and discounts, but the number of variables remains relatively small. For B2B orders, highly customized pricing is the norm. Sometimes custom pricing is based on discounts applied to an available group of rate plans from which enterprise customer can make selections. Those discounts and other add-on promotions are often negotiated between the service provider and the enterprise. This traditional approach does not lend itself to a simplified, digital process, much less one that is self-service driven. Part of the challenge of digital transformation is to identify domains where old processes are, effectively, anti-digital and to find ways to transform them. CPQ solutions should play an important role here and will need to help facilitate and reflect negotiated pricing in the creation of large, complex sales orders.

3. Adjusting Through the Customer Lifecycle

Mobile and digital services occupy highly competitive markets in which price and pricing models are moving targets. A contract for services that is negotiated and documented today could be completely obsolete within six months because products, prices and discounts change so frequently. At the same time, the customer’s usage profile and devices can change radically. New smartphones, tablets, hotspots, accessories, applications and now IoT devices enter the market quarterly or faster. As such, the idea that a large enterprise customer maintains the same needs or demand profile today that it had when the contract was signed is flawed. A digital CPQ solution should be able to reflect a customer relationship as it changes over time, ideally updating prices, discounts, service availability and eligibility over time to provide the best and most personalized level of service to the enterprise customer at any given time. This should not only lead to more sales, but also to better customer experiences and a greater sense of partnership between the service provider and its largest customers.

Download the brochure for more information on CPQ and related digital marketplace solutions.


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