A growing number of equipment manufacturing companies are realizing the value of upselling their product lines by bundling them with advanced service offerings. This is like creating a new revenue stream but without the risk and overhead required for the development of new equipment since they are often much less expensive to create and more profitable than products. Also, given the important market advantage of reduced product introduction time, bundling advanced services has an added appeal.
Bundling two or more products/services has a tremendous reward for the customer and commonly saves the buyer between 7% - 15% over the cost of purchasing the services separately. But the rewards for manufacturers are also significant in terms of producing higher revenue, lower operational costs, and better profits. It’s not uncommon for manufacturers to boost revenue by as much as 60% by bundling. Manufacturers that are successful often outpace their competition by over 30%.
Top Strategies and Tools
To cash in you need to develop a thoughtful strategy and adopt tools and techniques that enable your sales teams to easily add services. This will ultimately drive success or failure. As the approach involves combining a range of products and services, it exacerbates the complexity and importance of systems and steps that ensure you reap the potential profits from bundling. What appears to be a winning profit strategy could end up with disastrous results for a company’s bottom line if not managed correctly.
Use CPQ Software to Cash In
That is where XaitCPQ comes in. At the heart of this configure-price-quote solution is the ability to collect all of your complex product and services information into one place and make it accessible in real time. Guided selling features help reps quickly understand the various options, configure tailored quotes and scenarios on the fly, and collaborate with other team members, resources, and customers no matter where they are located. This puts your organization several steps ahead of your competition while enabling your sales teams to quickly and easily sell more, make more, and drive revenue with bundled products and services.
With a configure-price-quote solution, your sales teams have an advantage that boosts the bottom line. These ancillary service revenue streams are effectively out of reach for companies using old-school spreadsheets and file shares. And while many manufacturers may be equipped with advanced CRM systems that manage the sale of equipment, advanced service-based programs are often not as easy to configure and measure - particularly if they are interdependent with the equipment. XaitCPQ speeds the pace of the sale and captures revenue that would otherwise be left behind in an equipment-only sale. Now you can meet the expanding needs of your install base and capture the full revenue potential of every customer.
How can you make the most of XaitCPQ to drive more revenue? Here are three best practices to consider.
- Configure your services as products – Today’s customers are no longer interested in purchasing one-size-fits-all solutions. Consumer preferences are trending towards personalization. In fact, one in five buyers is willing to pay a 20% premium for personalized products. Configuration is one of the best places to start. Through configuration, you can give buyers the custom and bundled products and services they’re looking for — working with them to ensure your offering has the specific features and functionality they're after. XaitCPQ makes it easy to do through one straightforward, easily trackable system. If your company has an extensive product catalog and a variety of different service options, the configuration features within the tool can help you quickly and easily create a bundled offer, and easily modify and refine that offer until your prospect gets what they want.
- Define your pricing strategy – Once you have configured an offering to a buyer’s liking, flexible price functionality within XaitCPQ allows your teams to optimize the price they give to the customer by taking into account the nuances of their purchase and their relationship with your organization. Extend additional incentives and further bundling and take into account any applicable discounts or taxes. Competition-based pricing, cost-plus pricing, rate-based pricing, and value-based pricing models provide a variety of approaches and options to make the deal work for everyone involved.
- Take advantage of reporting features – Once the deal has been closed that doesn’t close out the lifetime value of your customer. XaitCPQ software can help you facilitate more robust reporting practices to drive more sales in the future. What’s more, the solution can connect directly to your CRM — Salesforce, MS Dynamics, Hubspot, and more — where you can maintain accurate records of what was sold in each deal, the pricing, and discounts, all accessible through your current CRM.
In the end, automating and easing the process with XaitCPQ invariably leads to best practices that lead to increased revenue for manufacturers. It enables sales teams to consistently produce compelling proposals and bundle products and services together for broader and more profitable deals. The overall approach makes it easy for buyers to see the extended value of engaging with your business over time. The built-in capabilities are especially powerful for large manufacturers with multiple product offerings, multiple service options and programs, and multiple countries involved.
Related articles: Virtual Selling with XaitCPQ