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Expert Advice for Medium and Midsize Businesses

What CPQ Can Really Do For You: #8 - Asset Based Ordering

Andy Pieroux
Founder and Managing Director, Walpole Partnership

Asset based ordering (ABO), which is sometimes referred to as Subscription Ordering, is a powerful capability that extends the reach of Configure, Price, and Quote (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 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. 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 that advertises the start of the new football season.  Your football mad son pesters you to add a ‘Sports Package’ to your TV contract. You agree to 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 an even better 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 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, these contract changes were a back-office maintenance process, disconnected from the customer-facing sales or service teams. For industries like telecoms, it’s invaluable to have this information linked in to the sales tools where ABO provides a crucial advantage in terms of giving a customer the right deal at the right price.

The benefits aren’t limited to telecom companies. Any organization 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 businesses 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 behavior, ABO can be a fantastic asset to many organizations.

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* Originally published on walpolepartnership.com.

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