In the early 2000s, executives at Cleaver-Brooks realized they had a problem: sales quotes were inconsistent, error-prone, and time-consuming to create, given the complexity of their products. They tried a distributable product selection and an online ordering system, both of which failed to take off. Boilers are complex products with numerous controls and components. For instance, to sell a Firetube Boiler, the company’s bread-and- butter business, one would have to choose what fuel it would run on, drives, controls, safety valves, etc. Some of this was driven by specs, others by customer requirements, code, and how the equipment was to be applied. There are thousands of options and millions of different combinations for just the Firetube boiler. Due to the complexity, it was impossible for reps to be experts on all the products. So reps would quote equipment they were more familiar with, rather than what the customer really needed. To sell, reps needed to lug around some heavy material: a 575-page price book and a 1,000-page boiler book listed all the product specifications. Quoting was a time-consuming, manual process; reps often used outdated material and inconsistent branding, causing many mistakes. And mistakes were expensive to fix, running into tens of thousands of dollars, especially if the equipment had already been deployed.
In 2005, Cleaver-Brooks adopted SAP’s CPQ and has used it ever since. The entire product portfolio was built into CPQ with 43 different configurable products, representing five different divisions, two different channels, operating under unique brands with thousands of variables and tens of thousands of rules built-in. With CPQ, all the complexity is still there, but it is all buried behind the scenes so the rep no longer has to deal with it directly, with calculations done automatically, and appropriate options listed. In order to smooth the transition from the paper world to the online world, the company created the same tabs within CPQ that the reps were used to in the offline world. So if reps knew where a particular option was in the price book, they knew immediately where to find it within CPQ. That really helped people get comfortable. Cleaver-Brooks now generates accurate, consistent proposals all of which carry the most up-to-date pricing, correct options, uniform branding, and terms and conditions in a 30- to 35-page indexed format for million-dollar boilers in a matter of minutes. Based on the configuration, the pictures, diagrams, and copy change automatically. No longer can the reps configure something the company can’t build. CPQ enabled the sales force by putting information at their fingertips, making selling easier, faster, and repeatable, thereby increasing sales and margins. The tool encourages reps to upsell; if a rep is preparing a quote for a boiler, the tool suggests an economizer, which the rep can select in a series of clicks and put in front of the customer along with its performance information and potential for monetary savings.
Generating a quote for a complex product was a four-hour process, which CPQ reduced to just 15 minutes. Between the company’s reps and distributors, about 1,200 people use CPQ to generate some 500,000 quotes. New reps are onboarded faster because CPQ puts all the information at their fingertips. Despite the complexity of the equipment, new reps have actually gone from quote to close in their first five days with the company. In terms of intangible benefits from CPQ, the company reexamined and simplified its business processes, filled gaps in its product definitions and pricing, and captured tribal knowledge.
“You basically give the sales rep 1-2 days of their week back (with CPQ)…When you give back time to reps you are encouraging them to sell solutions to customers instead of just reacting to specifications.”
– Chris Weckler, Development Manager - Sales Tools, Cleaver-Brooks