The price is right: Hear about modernizing sales from the PROS

PROS manufacturing industry experts shine a light on how manufacturers can modernize their sales processes.

In the digital age, manufacturers must focus on their sales process just as much as their products – as the overall sales experience is the most important factor in a decision to buy.[i] In a world where globalization, disruptive competition, and increasing costs make it difficult to grow profitably, competing on product features is no longer enough. PROS is a Microsoft partner helping manufacturers uncover hidden sales opportunities, configure products and services, optimize and tailor prices, and deliver exceptional customer experiences by accelerating and personalizing the sales process for each customer.

Microsoft’s Colin Masson, Global Industry Director of Manufacturing Solutions, sat down with the PROS team to discuss how manufacturers can modernize their sales processes. Below is an interview between Colin and three PROS experts with decades of combined experience in the manufacturing industry: Director of Strategic Consulting Kevin McCraw, VP of Technology and Platform John Salch, and Senior VP of Sales Excellence Tonya DeWeese.

Colin Masson (CM): Let’s start with pricing, which is a hot topic in manufacturing right now. Why is there an increasing focus on pricing?

Kevin McCraw (KM): Historically, manufacturers and distributors have been able to keep their pricing information private through special price agreements. But in the digital age, buyers have unprecedented visibility into price points and associated fees, so as they are shopping, they are much more informed. Nailing down a price the customer is willing to pay is already complex, and this increased transparency is making it even more challenging.

In addition, manufacturers are uniquely challenged because they have an enormous range of products, from a 2-cent washer to a $2 million piece of equipment, and they need to sell them through so many channels. Plus, they aren’t just selling products anymore, they’re including value-added services in SKUs as well, which further complicates pricing.

CM: You mentioned a growing number of sales channels. How are manufacturers dealing with the rise of e-commerce?

Tonya DeWeese (TD): Manufacturers need to handle more channels than many other industries. They may be selling directly to customers via catalogs, websites, mobile apps, or retail stores, or selling indirectly through a distributor, partner, or agent. To be successful, manufacturers need to maintain consistent pricing and product descriptions across every channel.

Consumers today want the flexibility to shop through any sales channel, and they expect consistency. No one wants to get one answer from an e-commerce site and another from a sales associate. Forward-thinking manufacturers have to let customers buy the way they want to buy and give sales teams the tools to seamlessly switch between channels as well.

             

 

   

    

     

     


Kevin McCraw, PROS Director of Strategic Consulting

John Salch, PROS VP of Technology and Platform

Tonya DeWeese, PROS Senior VP of Sales Excellence
Colin Masson, Global Industry Director, Manufacturing Solutions, at Microsoft
Colin Masson, Global Industry Director, Manufacturing Solutions, at Microsoft

CM: As the sales process becomes more complex, how can technology help sellers?

TD: There’s one thing I always say: your data is possibly your largest underperforming asset. By combining their data with the techniques we’ve proven to be successful in the market, manufacturers can net tremendous benefit.

For example, advanced analytics can surface potential leads, helping sellers uncover hidden opportunities in their account bases and grow their sales. Machine learning also generates cross-sell and upsell guidance for sellers based on what the customer has purchased in the past and what similar customers are purchasing.

When it comes to pricing, manufacturers need a rationalized pricing strategy that’s based on data rather than gut instinct. In the era of enormous price pressure, the last thing you want is to leave money on the table. Advanced analytics produces tailored prices aligned to what each customer is willing to pay.

CM: Manufacturers are comfortable with advanced analytics for maintenance and operations—but do they need it for pricing as well? 

TD: The manufacturing industry has long-tenured sales reps, operations staff, and CEOs. We have to do a lot of evangelism. In terms of sales processes, we see everything from printed catalogs to Excel spreadsheets. Part of our work is educating people in the art of the possible.

One of our challenges is that not everyone knows what buzzwords “configure, price, quote” (CPQ) and “pricing science” mean, how to use them, and why they add value.

But when you start talking about the experience for end customers, over-discounting, or price variability for a single product across sales reps—those are things that people understand. We empower sales reps with the right information, at the right time, and at the right level of detail so they can keep sales cycle moving and win customer trust. This is where PROS sets itself apart.

CM: Can you tell us more about how the PROS Smart CPQ solution helps manufacturers?

KM: PROS is taking 30+ years of pricing experience and bringing it full circle to cover the last mile between sales reps and their customers. We are the only company that's offering a complete CPQ solution that covers everything aspect of the quote process, using science to identify the right product for the customer and to tailor that pricing to the specific customer.

In terms of pricing, our platform helps sales teams generate personalized offers based on algorithms and machine learning. Every manufacturer already does some segmentation by basic categories like size and industry. But sellers end up with widely different net prices for the same product, potentially losing revenue to over-discounting. PROS helps manufacturers take segmentation a step further, incorporating a number of additional attributes to determine the optimal pricing window for each customer.

Plus, as manufacturers move from selling standard products toward selling tailored services, our platform helps sales reps seamlessly bundle offerings as an individual SKU, with guidance that helps them craft the offerings.

It also makes it easy to maintain these targeted prices over time. It used to be an administrative nightmare to maintain a non-standard price in legacy ERP systems—like if a seller negotiated to $4.95 instead of $5.00. Our dynamic pricing helps you administer prices consistently with segmentation.

CM: How have some of your customers used CPQ capabilities to change the way they sell?

TD: We have worked with leading customers like Hewlett-Packard to replace complex, manual deal approval processes with an intelligent pricing system. Using our solutions, Hewlett-Packard shortened the sale cycle, automated the approval process for 80% of cases, and cut quote response time by 25%.

We also worked with Honeywell to integrate pricing information from multiple decentralized systems. In just 3 weeks, they implemented a price setting process that sped up pricing by 40% across 140 countries.

While we’ve worked with some of the most advanced companies in the business, one of our goals is to reach smaller firms and help them think about things at their next level.

CM: What would you say to those smaller manufacturing firms—how do they get started?

KM: You don’t have to be a multi-billion-dollar company with a team of data scientists to transform your sales. We help smaller firms lay a solid foundation for growth by pricing consistently, packaging solutions properly, and identifying where they are losing business.

Smaller firms are no longer at a disadvantage. They don’t have to expend all their IT resources on infrastructure to get going. And as we’ve built a lot of the “Smart” into CPQ, they don’t need a team of data scientists either. That’s one of the reasons we’ve chosen to work with Microsoft—because Microsoft has the experience of taking intelligent cloud systems to companies of all sizes with Dynamics 365.

CM: What other reasons did you have for working with Microsoft in this area?

John Salch (JS): We view Microsoft as a strategic partner for PROS—for everything from the sales cycles to operations. Microsoft has the most complete and logical end-to-end platform story. With Office 365, business apps like Dynamics 365, and a cloud platform to build on, our customers get a complete foundation as they modernize their business.

Microsoft boosted our credibility among notoriously risk-averse manufacturing companies—the majority of whom have trusted Microsoft with their IT departments for many years.

In terms of CRM systems, Microsoft is the way of the future. Many companies are moving away from legacy CRM systems to a more agile business platform like Dynamics 365. Integrating our solutions out of the box with Dynamics 365 makes it possible for us to provide a single tool for managing accounts, pricing, and quotes.

CM: What about companies that are running legacy systems like SAP?

TD: We are actually working with some of SAP’s largest and oldest customers. PROS solutions make it possible to integrate with customers’ existing legacy systems, including SAP. It also gives us the flexibility to provide robust or simple integrations, depending on the customer’s business needs. Our approach empowers customers with the choice of how they drive their solution—whether it’s leveraging legacy systems or the latest integrated business platforms like Dynamics 365.

CM: We’ve talked about how companies of all sizes need to rethink their sales processes or risk falling behind. For those that are already familiar with CPQ, why should they take a fresh look? What’s coming next?

JS: We’re going to be taking Artificial Intelligence to the next level with chatbots that engage customers on one end, and provide sellers with expert advice on the other. AI will soon be an expectation rather than a differentiator, especially with cognitive sciences like natural language processing, speech recognition, sentiment analysis, and external data mining. I think of it like the auto industry: features like autonomous driving and automatic braking are new now, but in 5 or 10 years we'll be laughing about the time we were living without them.

We’re also planning to integrate mixed reality and virtual reality using Microsoft HoloLens, which creates a compelling, immersive experience for customers. You can imagine the delight and unique experience a customer has when they get the opportunity to visualize and configure complex products with life-like detail.

Finally, we are looking to help manufacturers bring data from IoT equipment sensors into the sales process. Most are already familiar with how IoT is used for preventative maintenance, but they don’t know that the same type of information can be used to improve sales as well. By monitoring equipment performance after purchase, manufacturers can better anticipate the need for spare parts, and what products are suited to each customer’s needs. 

CM: Thanks so much for your time. It’s been great to get the perspective of seasoned professionals who have so much experience in complex manufacturing sales.

 

Try PROS Smart CPQ today

According to a recent Forrester report, “businesses that are content in automating administrative activities are two steps behind…The next evolution in selling comes in the form of predictive analytics, next best actions, and the tools that supply them.”[ii]

Don't get left behind. Try the PROS Smart CPQ for Manufacturing solution for yourself on Microsoft AppSource today.


[i] CEB global, 5 Customer Buying Trends You Can't Ignore, 2015

[ii] Forrester, Prescriptive Advice: The Salesperson’s Crystal Ball, 2017