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10 Strategies For Revolutionizing Customer Relationships with Configuration Lifecycle Management

Bottom Line

Closing the gaps between what sales sells and production can deliver takes more than a sell-side CPQ app.

Managing products as platforms is the future, and it’s coming faster than many realize.

Real-Time Product Collaboration Is Revolutionizing Customer Relationships

Solving the many disconnects across selling channels and integrating product catalogs, pricing, contracts, and quotes are where CPQ apps excel today. And for all the hype that surrounds CPQ, they still aren’t scaling to be true product platforms. The gap between what sales believe they can sell and what products can deliver has never been bigger, and it’s growing fast. What’s causing the disconnect is the lack of scale CPQ apps have in response to the need to develop products as platforms..

CPQ Apps Alone Accelerate Sales At The Cost Of Manufacturing Scale

Sales, Sales Operations, and Marketing teams have their own product rules, constraints, and strategies for selling the most popular products and programs. CPQ apps are designed for these teams and accelerate sales cycles. Engineering, Product Management, and Manufacturing also have their definitions of the product to the constraint level. These teams often don’t get the same level of detail included in CPQ apps, causing disconnects leading to product quality errors and incorrect orders. The answer to this challenge is to support each product like a platform, instead of an extension or worse, compete on price alone. In all this intensity to compete on technology alone, many world-class companies forget about the Voice of the Customer and fail.

The Best Product Decisions Are Customer-Driven

  • Integrating Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and Product Lifecycle Management (PLM) systems to gain insights into product-based customer needs is the catalyst that drives consistent, strong revenue growth.
  • Instead of relying on CRM as the system of record, as CPQ systems often do, it’s best to rely on the intersection of CRM, ERP and PLM systems for an accurate 360-degree view of customers.
  • Nearly all manufacturers are in a hurry to drive additional revenue and sometimes resort to price cutting when accelerating new products to generate more profitable growth. Getting sales, marketing, engineering and manufacturing teams all focused on delivering outstanding product introductions delights more customers and drives faster growth.
  • Capturing customer complaints in a PLM system and adding insight via CRM customer records leads to new products that more closely match customer needs, revolutionizing customer relationships.

To excel at manufacturing today, customer complaints, concerns, plans, and recommendations need to respected and selectively included in future product direction. Voice of the Customer (VoC) programs matter more than ever. Balancing the need drive innovation and stay in step with customer requirements is why CPQ apps are not enough. It takes a product platform to bridge the gap between what sales promises and what engineering and manufacturing can deliver. The following are ten strategies for closing the product gaps, improving order performance and revolutionizing customer relationships.

10 Strategies For Revolutionizing Customer Relationships

  1. Move beyond transactions and manage products like platforms using a lifecycle approach to configuration management – and create more Lifetime Customer Value in the process. CPQ apps are riding a wave of hype because they are effective at creating more opportunities for customer-configurable products. But what about Customer Lifetime Value (CLV), creating customers for life instead of just cranking out another transaction? CPQ apps have no answers to that challenge. Configuration Lifecycle Management (CLM) apps and platforms do. They set you free to manage products like a platform and see customer relationships as long-term – not just slamming another order through. The following graphic illustrates the differences between siloed CPQ apps and defining each product as a platform using Configuration Lifecycle Management (CLM).

Managing Products Like Platforms Creates Stronger Customer Relationships

  1. Scale, accelerate, and simplify product strategies with a focus on turning them into platforms that can quickly react to customer requirements. The faster an individualized, often isolated, product can be turned into a platform, the fewer the gaps in product knowledge between sales and production. This platform approach will help to create a solid foundation to manage product- and solution-specific requirements.
  2. Capitalize on APIs powering a CLM and Cloud Platform revolution. New business models are pushing every organization past the limits of their existing IT architectures, systems and apps. The only way to keep up is to embrace Application Programming Interface (API)-based architectures that support on-premise and cloud-based applications with equal accuracy, agility, and scale. 2017 Is Quickly Becoming The Year Of The API Economy, and in 2018, the pace will accelerate as integrating CRM, PLM and ERP systems together will be essential for supporting the fastest growing business models manufacturers have today. The following graphic is the Cloud Platform Maturity Model mentioned in the Forbes post, 2017 Is Quickly Becoming The Year Of The API Economy.

Capitalize on APIs Powering a CLM and Cloud Platform Revolution

  1. Deliver configuration apps faster using APIs. Legacy CPQ, and even some cloud-based CPQ apps, aren’t as open as they are advertised and cost more in professional services to integrate than one would expect. The future of configuring, pricing and quoting products will be based on platforms that can scale using APIs and integrate into diverse enterprise systems. APIs are fuel for growing new business models and keeping architectures open.
  2. Attract new customers with excellent experiences at each step of the sales cycle. Imagine being able to provide an order status for the most complex, customized product configuration your company has ever created in less than a second. Or launching mass customized products in a fraction of the time a new product launches today. Taking a platform-centric approach to managing products opens up entirely new ways to delight customers with new experiences and deliver products that meet and exceed quality levels.
  3. Rewiring reseller relationships using CLM brings greater accuracy, speed, and scale to all channels. Taking a platform-centric approach to defining new products opens up distribution channels to more cross-sell, up-sell and team-based selling. What’s essential to drive revenue through channels is to minimize and ultimately eliminate the gaps between what sales is capable of selling and what production capable of delivering.
  4. Gain greater contextual intelligence about customers to act faster on their preferences and needs. A CLM-based approach to creating, launching and managing configurable products opens up the opportunity to create an entirely new system of record and analytics layer. The open architecture shown in the previous graphic enables manufacturers to create entirely new analytics and business intelligence layers (BI) in their CLM go-to-market systems.
  5. Expect IoT to change the speed and scale of customer relationships. Only by taking an API-based approach to defining product lifecycle platforms can a manufacturing organization support the massive amount of data being generated by the Internet of Things (IoT). Manufacturing leads all industries in the amount of data generated. Capitalizing on IoT and manufacturing data to gain new insights is how many organizations are hunting for new business models today.
  6. Cut through PLM and ERP complexity to deliver more perfect orders in every production period. Closing the gap between what sales are promoting and production can deliver increases the ‘perfect order’ metric by over 10 – 20% in one month or less. Combining  PLM, CRM, and ERP data results in fewer order errors and more on-time delivery; both essential elements to drive up ‘perfect order’ performance.
  7. Discover customer preferences by combining pricing, configuration and PLM data into selling & offer strategies. Using CRM data to gain insights into customer preferences and create customer-centric data models that provide pricing, configuration, upsell and cross-sell recommendations is the future of mass customization. Taking a platform-centric approach to defining, promoting, customizing and selling is taking organizations to the next era of demand-driven manufacturing based on customers’ unique preferences and needs.