Read Time: 10 minutes

Commercial Excellence for Inquisitive First Graders

Jordan Hahn< Jordan Hahn July 28, 2021

As my kids get older (now 4 and 6 years old), I’ve occasionally had impromptu opportunities to shed some light on just what it is that we grown-ups do when we’re “working.” Perhaps surprisingly, these moments have been even more of a learning opportunity for me than for them. 

As a product manager, describing my job–even to adults–has often been sort of a challenging task. It doesn’t help that I can also tend to be someone who goes off the deep end in my pursuits and frequently wanders down obscure research rabbit holes. But one of the convenient things about working on a CPQ solution is that at the end of the day, it does exactly what it says: enables sales teams to do the essential activities of Configuring, Pricing, and Quoting their products and services. 

I’m sure many of us have been asked by a colleague to “explain it to me like I’m a five-year-old,” which can seem sort of silly at first. But just how far can we boil down B2B commercial excellence? Sometimes you just have to look around at everyday life. 

Configuration Variants at the Construction Site 

The first time it clicked for my older son was when he watched some nearby construction. He loves vehicles and noted that some steamrollers have (pneumatic) tires at the back, but others have another roller drum. This was coincidentally right around the time that a new customer (a future Commercial Excellence Award winner, no less) was going live on Vendavo Intelligent CPQ.

He was also starting to get more sophisticated with technology like tablets and computers at home and school. So when I explained that those two steamrollers were different configurations, with different parts, and my app helped someone figure out what to charge for them, it made perfect sense (and he can be a critical audience!). 

Agricultural CPQ at the Hardware Store 

More recently, that same kid came with me to the hardware store on the way home from a swim lesson. He’s always been curious, but it’s really taken off since he learned to read. It’s amazing how much you can cover in just a few minutes while standing in the lawn and garden care aisle with a receptive audience.  The paraphrased conversation went something like this: 

“So, where’s the grass seed aisle?” 

That’s what the signs are for, so let’s make use of them. 

“’Please write SKU on bag.’ What’s that mean?” 

We talked about how everything in the store has a SKU (right there on the price tag), so the register knows what to charge and the people who run the store know when they need more. 

I had to write the number on the bag because I was getting bulk seed, but most products have a barcode. “Yeah, we can’t read barcodes.” But computers can! 

I wrote one SKU on the bag, then almost started pouring from the wrong bin– not only was it different from what I needed, it would have been the wrong price. 

“New Lawn Starter Fertilizer..?” 

We discussed how that product had ingredients for a specific purpose, in this case for new grass. 

Found and read the N-P-K numbers and what they mean (9% nitrogen, 13% phosphorus, 7% potassium). 

“Super Liquid Iron. So what’s that one for?” 

Different plants need different ingredients, and at different times. 

Yet another product (for newly planted flowers) had much higher phosphorous content than the rest. Using the wrong fertilizer can waste money or even hurt your plants, so… 

You need the right information to make the best decision. This is why I got a soil test when I was renovating our lawn.

I also did research–or you can rely on experts at the store–to learn about what was best for the type of grass I was growing and our local environment (where 40% of our precious water supply and 55% of residential usage goes to outdoor watering).

So, for instance, Colorado soils are usually high in phosphorous, and tall fescue shouldn’t get nitrogen in summer. So an iron supplement with no N and low P-K was the best choice for our particular lawn at this particular point in time. 

After all of that, he was surprised and impressed to know that Vendavo customers make use of Intelligent CPQ to select the right fertilizer for what a farmer is growing, where they’re growing it, and determine a price based on all of that, plus the distance trucks have to drive to deliver the product. He’d probably tell you the best part was the lollipop he got at checkout, but it was a fun and unexpected conversation for what was going to be a quick in-and-out. 

Elementary Commercial Excellence 

Trends in tech, AI, and data science can make it easy to focus on the flashy bits and their optimistic promises to solve all your problems. But even our teams who work on those very things to build industry-leading, AI-driven optimization solutions will tell you that to be successful in those pursuits, you still have to get the basics right. High-quality source data will lead to more accurate models and more useful guidance. And efficient, accurate product selection is necessary to most appropriately serve–and price–a given customer’s needs. 

Value-based pricing strategies aren’t simply about charging higher prices for higher margins, but rather about making more relevant value propositions at a price that best meets your customer’s willingness-to-pay, the value your product creates for their business, and your company’s particular objectives (which could be margin, revenue, market share, or something else altogether).  

It doesn’t always happen when or where you expect it to, but it can be a useful exercise to break things down and restate the basics of your strategy, goals, and approach–maybe not to a first-grade level, but certainly to a level that everyone in your company can understand, from the C-suite down to a newly hired grad.

When everyone is reminded what you’re doing, who you’re doing it for, and why, the day-to-day choices they make can aggregate more cohesively–and profitably.

Could you explain your business to a first-grader? Give it a try some time. It can be surprisingly insightful.