This is what needs-based configuration means.
The dynamic Configure Price Quote (CPQ) software feature called “needs-based configuration” is meant to improve the user experience by choosing the best combination of product choices in real-time based on the user’s specific needs. Being able to do this is necessary for quickly making custom products from a list of product choices and making sure the configuration is correct.
Word for
Product design based on needs
Setting up a product in CPQ
Why needs-based configuration is important
To make accurate quotes and bills of materials (BOMs), you need advanced technology to configure goods that vary a lot. When new things, parts, and product features are added to the system, the needs-based configuration ensures that they work with the sales application without problems. This gives buyers more ways to customize the product and brings in more money for the company. The program’s rules-based logic also ensures that only valid BOMs and product configurations are sent to engineering for production.
Here are some benefits of using needs-based configuration to sell complicated, custom items like industrial tools.
Changing things
Needs-based product configurators let you make a lot of changes to the product. Customers can tell the system exactly what they need, and it will make a product design that fits those needs perfectly. By making goods that work perfectly for each customer’s needs, this level of customization makes them happier.
More sales in less time
Setting up complicated goods by hand can take a long time and lead to mistakes. This process is automated by needs-based configuration, which cuts down on the time it takes to make accurate quotes and offers. Because of this, sales processes are shorter; companies can answer customer questions and get orders faster.
Being accurate and consistent
Automated setup eliminates the chance of mistakes people make when setting up products and giving quotes. This ensures that the goods customers buy are always correct and consistent, lowering the risk of mistakes, rework, and disputes that cost a lot of money.
Needs-based configuration software can offer options that work well together or are an upgrade based on the customer’s wants. This is called upselling and cross-selling. This makes it possible to upsell and cross-sell, which raises the business’s average order value and income.
A better experience for customers
Giving customers an easy-to-use, streamlined way to make complex product configurations improves their overall experience. Customers can quickly look at different product options, make wise choices, and get solutions made just for them. This makes customers happier and more loyal in the long run.
Visualization of Products
A visual configurator is an integral part of the needs-based configuration in many CPQ manufacturing systems. A visual configurator has a virtual user interface that makes setting up things easier. Visual tools like drag-and-drop, selection menus, and 3D models make connecting with product options and parts easy for users. This ease of use makes it easier for buyers and sales teams to describe their needs.
Efficient Resource Allocation: Companies can better use their resources when they use a needs-based setup. The software can handle routine configuration tasks so the sales and tech teams can focus on more challenging tasks and talking to customers.
Ability to adapt and grow
When new goods come out, or customers’ needs change, CPQ systems are easy to update to meet those needs. This ability to change helps a business keep its products competitive and valuable.
Thoughts on Data
During the product configuration, these systems collect valuable data that helps businesses develop intelligent product and marketing choices.
Cutting costs
CPQ cuts down on the time and resources needed for manual setup and quoting by streamlining the configuration process. This cuts costs and makes the business more profitable.
The process of setting up based on needs
This feature depends on a solid rules-based configuration engine built into the CPQ program. Using AI to determine what rules and limits mean based on the product’s features speeds up the setup process for complicated items. Also, it lets various teams within a business handle the creation of products, rules, and market-specific logic in their way.
In general, this is how it works:
From the user: The process starts when the user, usually a customer or salesperson, tells the CPQ software what they need. These needs include technical details, features, quantity, price limits, delivery dates, and more. The software might have an easy-to-use guided sales dashboard or a questionnaire to get this information.
Product Catalog: The CPQ software comes with a complete product catalog that lists all the available goods, options, and parts and gives detailed information about each. This catalog has information about product features, prices, availability, and connectivity.
Set of rules and limits: Some rules and limits are already set in the CPQ program. Based on technical, operational, or business reasoning, these rules say how different product options and parts can be combined or kept separate. You can discuss these rules regarding dependencies, compatibility, or factors for not including something.
Engine for Configuration: CPQ is built around a powerful configuration engine. This engine uses algorithms and artificial intelligence (AI) to look at what the user types in, the product list, and the applicable rules. It intelligently sorts through many possible combos and permutations to find the right and most helpful product configuration.
Optimization: The configuration engine could have optimization algorithms that find the best configuration based on already set factors. These categories can be anything that can be measured, like price, lead time, weight, performance, or anything else. The goal is to find a configuration that meets the user’s needs and makes other factors work better.
Feedback in Real Time: The CPQ system gives real-time feedback as users type in their needs or change their choices. It immediately checks the choices against the rules and limits to ensure the user’s choices are legal and correct.
Quote Generation: The CPQ software makes a full quote or proposal once the user chooses how their product will be configured. This quote includes the configured product and all its details, including pricing, wait times, and other terms and conditions.
Documentation and Approval: You can add more information, technical drawings, or contract terms to the created quote to make it more specific. After that, it can be sent to the customer or another part of the company for review.
Integration and Collaboration: CPQ software often works with other business systems, like CRM (customer relationship management) and ERP (enterprise resource planning), to efficiently manage orders and supplies. Collaboration tools let teams from different companies work together on complicated quotes and setups.
Updates and the power to grow: Systems based on needs are scalable and flexible. As products, rules, and market conditions change, they can ensure the software stays up-to-date and valid.
How Needs-Based Configurators Make Guided Selling Last Longer
By adding needs-based product configurators to guided selling, businesses can give customers a very personalized and involved shopping experience. As customers answer questions and enter their criteria, the configurator cleverly searches through large product catalogs and rules to show them the best product combinations. This makes the process of making decisions more accessible and increases trust in the suggestions that are made. Whether they are setting up industrial machinery, complicated software solutions, or vehicles that can be customized, needs-based configurators make guided selling possible by giving customers specific product choices that meet their needs. This ultimately leads to more successful sales and happier customers.
