Our series of deep-dives into the real benefits of implementing a Configure, Price, Quote (CPQ) system has covered many general topics so far. Now, let’s take a look at a slightly more niche, but great potential benefit of one of the newer features of CPQ – Asset Based Ordering (ABO).
ABO, which is sometimes referred to as Subscription Ordering, is a powerful capability that really extends the reach of CPQ. For businesses that sell subscriptions, recurring licenses, support agreements or modular solutions it can allow these transactions to be handled effectively beyond the initial sale and gives great scope for managing renewals. Critically it also provides the capability for up-sell and cross-sell opportunities to be captured, delivering enhanced revenue and profit for those who implement it well.
First, let’s understand exactly what ABO is. To take a B2C example, imagine that at home you have a fixed telephone line contract with your national provider. You’ve had this for several years. Then your old TV breaks down so you go out and buy a shiny new 60 4K HDR TV. Naturally you want great content to watch, and your phone provider also offers digital TV services, so you call up and you add a basic TV package to your contract. Three months later you receive a letter advertising the start of the new football season and your football mad son pesters you in to adding on a Sports Package to your TV contract. You agree a discount with your provider based on extending your original contract for a further 12 months. A year later you see that another provider is offering a great deal. You call your provider up and either they agree to terminate your contract, or they offer you a discount for a renewal.
ABO allows the provider to use their knowledge of what services you have and your contract status at any time so they can offer you an appropriate product, service or contract. It can also calculate any adjustment to pricing. Finally it can also issue the correct instructions to supporting systems so that they can move, add, change or delete (MACD) the records for each asset. In the earlier example this might show as an add for the TV service, a change to add the Sports Package, another change to the contract length, and finally a delete should the contract be terminated.
The key benefits of working with an ABO capable system is the ability to manage all these transactions in a sales facing system. Traditionally contract changes such as these were a back-office maintenance process, disconnected from the sales or service teams who face the customer. For industries like telecoms, its invaluable to have this information linked in to the sales tools and ABO provides a crucial advantage in terms of giving a customer the right deal at the right price.
The benefits aren’t limited to telecoms companies either. Any organisation that sells subscriptions, license contracts or support agreements can benefit. Software companies, facilities management companies and maintenance providers are all examples of the type of business that can use ABO technology to its maximum potential.
Finally, a good CPQ system should allow ABO to draw information from different sources – a CRM opportunity, an ERP system or an asset database. By using all this information and being smart about the logic of how it drives buyer behaviour, ABO can be a fantastic asset to many organisations.
The series “What CPQ Can REALLY Do For You” is written by Walpole Partnership’s MD, Andy Pieroux.
