A Sales Configurator is an efficient offer calculation tool

17.01.2022 Pinja Blog ERP

A smiling man working with laptop

Sales configurators are gradually becoming salespeople’s secret weapons, which, among other things, make offer calculation faster and more consistent. In addition, they help ensure that offer calculation covers all aspects and the offer sent to the customer includes all the necessary elements priced in a desired way. Besides the offer stage, the sales configurator also streamlines communication during the order and delivery stages – both inside the company and with the customer.

A sales configurator is a tool that works as a reliable background support and memory aid for salespeople during offer calculation. For example, the configurator can be a part of the ERP system appearing to the user as an offer calculation form that guides through the entire offer in a predefined way helping to consider all of the essential elements of the sales item and, if desired, automatically suggests a predefined pricing scheme.

When using a sales configurator, salespeople can perform offer calculation by themselves and customize the calculation model to suit their own line of business and organization.

A shift to using a sales configurator is often made from a situation where offer calculation has been performed using Excel formulas. However, with growing volumes and a more extensive product range, the complicated calculation models, poor repeatability and challenging version management of Excel spreadsheets often prove to be their weaknesses. In an Excel based operating model, an offer also easily remains detached from the other activities, and it is necessary to manually copy data from one system to the other. More and more often, there is a desire to move forward from Excel spreadsheets, also for data security reasons.

When using a sales configurator, salespeople can perform offer calculation by themselves and customize the calculation model to suit their own line of business and organization. At best, advanced configurators can offer salespeople benefits that they find hard to give up after testing once.

Salesperson's checklist

A sales configurator streamlines the salesperson’s work by changing customer hopes and requests to concrete product names and structures that also include product property and controllability information. In addition to helping salespeople perform this independently without a planner’s or quantity surveyor’s help, the configurator also enables calculation of several optional offers based on the same background information. Furthermore, the configurator supports additional sales by helping management of changes and extra work – in a traditional operating model, salespeople often have to rely on their own memory to take these into account. 

Briefly, a configurator helps salespeople focus on the most essential, that is, serving the customer and offering alternative solutions instead of repeating basic calculations and recalling technical offering details.

Clear and consistent pricing + efficient matrix pricing

When using a sales configurator, offer calculation is based on offer forms customized in the system based on the company's product range and associated calculation recipes. The calculation template guides the salesperson, among other things, to select component quantities and structural and material alternatives according to the customer’s wishes. In this way, offer calculation is a more aligned and conscious activity while it simultaneously reduces key-person dependency in calculation logic.

Advanced sales configurators can also utilize so-called matrix pricing, which enables automatic application of stepped pricelists. This increases the flexibility and realisticness of the pricing system, since not even purchase prices always change linearly as the number of items or the volume changes.

Flexibility and coverage

One of the best sides of the sales configurator is its virtually unlimited customizability. Flexibility is needed, not only because different lines of business are governed by different factors, but also because each organization has a unique operating model and market situations also vary under economic fluctuations.

Various pricelists can be configured in the background and the sales configurator can be conveniently used to price both physical products and services – or combinations of these. Calculations can consider cost prices and sales provisions, and subsupplier pricing can also be included. 

Finally, the configurator defines a list price based on the target margin to guide salespeople. If it is desired to sell the item with a margin lower or higher than normal, this can also be done – consciously and in a way that is verifiable afterwards, if needed.

Traceability

During offer calculation aided by a sales configurator, a structural offer is created to the customer for approval, which then forms a deal or contract in the system. The deal includes all customer, contract and delivery information enabling its further processing in the company’s process.

When the company’s offers are calculated according to a jointly agreed and predefined process, and data and documents related to the offer are stored in one place, they also enable an easy review at a later stage.

Other functionalities related to offer calculation include planning of billing and installments, rough scheduling and resource booking, checking customers’ credit reports, electronic signatures, provision calculation and attachments to the offer.

When the company’s offers are calculated according to a jointly agreed and predefined process, and data and documents related to the offer are stored in one place, they also enable an easy review at a later stage. This allows key-person independent tracing of the logic behind the offer also later, in both the offer and order stage and the delivery step. In this way, the sales configurator partly also facilitates internal communication in the company.

From manual to automated

A sales configurator helps salespeople’s work, for example, because it allows automation of practically all elements that repeat in a standard format in an offer. Nevertheless, the configurator does not reduce the possibility of customization – if a default option suggested by the tool does not suit a particular offer, the salesperson can modify it manually to the extent desired.

Ideally, the sales configurator works as a part of an efficient and comprehensive ERP solution, with which the path from a bid won smoothly goes forward from production to delivery and aftersales. Efficient offer calculation and an Enterprise Resource Planning system that solidly supports the delivery process can together create a strong basis, not only for good internal communication but also for convincing customer service.

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Ari Harjula

Ari Harjula

I work at Pinja as the head of Total business unit. In addition to our ERP solutions, I help our customer companies streamline business and knowledge management with various BI and integration solutions. In my work, I am particularly inspired by interesting customerships and solving customers' diverse challenges. Due to my background in industrial economics and process industry, the company’s production processes as well as building bridges between technology, people and commerce are close to my heart.

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