The Quest for SKU Simplicity

"We have too many SKUs," proclaimed the new executive as he dispatched his team on a mission to find the root cause. His hypothesis was that a business with too many SKUs is overly complex for sales and channels, so they waste time looking for the right SKU instead of quoting new business.

His team heads off to figure out why there are so many SKUs and whether they are all needed. Eventually, the SKU data is loaded into a Business Intelligence tool, sliced and diced, and reviewed by multiple people. They all arrive at the same inevitable conclusion: Every SKU was created by a product manager to solve a specific market need, and we can't live without them.

So, if all these SKUs are necessary, why did we think it was a problem in the first place? After all, shouldn’t we be able to sell some products in a tiered pricing model, offer volume discounts on other products, and let the sales team offer meaningful discounts to our biggest customers? It seems that as business ebbs and flows, we need to be able to adjust our product and pricing strategies to accommodate.

And if that is the case, we will always have many packages for our products and services. It’s a chicken and egg puzzle; how are we supposed to untangle the mess?

Uncovering the root cause: Are all SKUs truly necessary?

In order to get to the bottom of it, we have to understand why we thought there were too many SKUs in the first place. Undoubtedly, the problem isn’t the number of product combinations but the inadequate tools that exist to find the correct products, customize them, and present them quickly to customers.

Most OEM quoting tools were born in a generation when we quoted perpetual software and software maintenance. Most Channel quoting tools were born in the era of downloading and uploading price books. Imagine what had to be done to turn those quoting tools into subscription quoting machines.

The asset database was tricked into thinking that annual maintenance programs were subscriptions, then bolted to a workflow engine designed for price exceptions and glued to a legacy custom quoting tool. The result is a patchwork of systems that frustrates sales, finance, and operations teams.

Good luck finding someone in the company who remembers how workflow routing rules are applied to multiple products, let alone what needs to be done when you want to make a change!

Innovating from Frustration: The Birth of Vendori

Fueled by the frustration of dealing with complex, outdated systems, Vendori was born. It is a purpose-built, multi-tenant CPQ that allows the entire sales ecosystem to work seamlessly on the same platform.
It’s structured for success:

• The no-code solution: Allows CPQ administrators to easily set up and modify the models.

• Streamlining the Quoting Process: Quotes flow effortlessly from OEM to Distributor to Reseller to Customer, eliminating the need for uploads and downloads into multiple systems. This approach creates a sales velocity measured in minutes, not days.

• Customized Pricing and Transparency: The native pricing waterfall is entirely customizable. This flexibility allows you to create discount programs with transparency so that back-office teams are aligned on what can and cannot be offered as a discount. Pricing models for tiered, volume, and consumption pricing are also native to the tool.

• Efficient Workflow and Real-time Feedback: If a quote triggers a pricing rule, then Vendori’s native workflow routes the quote for approval by the proper stakeholders. Real-time feedback exposes discounting irregularities, providing Sales teams with valuable insights on how to maximize their quota attainment using pre-approved quotes.

Embracing Future Growth with Vendori

In order to foster growth in your business, you need a CPQ that allows you to prepare, package, and deliver multiple options to customers. The answer isn’t offering fewer options to customers but rather implementing a forward-thinking CPQ designed for the future.

Experience the power of Vendori firsthand. Book a demo and let us demonstrate how Vendori can bring control and velocity into your sales process. Or get in touch here - we love feedback.