optimizing your SKU catalog

5 best practices for optimizing your SKU catalog to support CPQ product bundling

by Kevin Willemse

For most businesses, product bundling nirvana is having a SKU catalog that makes it easy for sales teams to bundle products together and maximize their respective opportunity values while increasing overall customer value and satisfaction.

Building this SKU catalog, however, is usually much tougher than it might intuitively seem, and not tackling this rationalization and bundling challenge usually continues to result in catalog bloat and growing SKU redundancy. A few years ago, consumer-products behemoth Unilever discovered that 60 percent of the variance in its SKU products was responsible for just five percent of the company’s sales—a shocking finding that resulted in the company ordering its SKUs to be cut by 20 percent.

Like Unilever’s SKU catalog, businesses of all sizes and industries struggle to develop and maintain a SKU catalog that optimally supports product bundling without placing perceived limits on sales teams and their customer offerings, but rather opens new means to achieve full deal potential. 

As you’re thinking about how to use Salesforce CPQ to support product bundling, one of the foundational steps you should be taking is a pragmatic and critical update to your SKU catalog (not just its size and cleanliness, but evaluating structure, taxonomies, data fields, and their relationships). The size and makeup of your SKU catalog have direct, consequential impacts on both the volume of your sales and the length of your sales cycle. Regardless of whether you’ve already implemented Salesforce CPQ, or you’re planning to, you absolutely need to get your SKU catalog right before considering how all its other automation features and sales processes enhancements may be leveraged.

Here are five best practices for optimizing your SKU catalog that will support product bundling (and other inherent features) using Salesforce CPQ:

 

1. Eliminate duplication

The first step to optimizing your SKU catalog is to simply review your existing SKUs for quality and consistency. Over the years, your SKU catalog is likely to have been modified by various individuals who weren’t necessarily focused on catching duplicated SKUs. Thus, it’s your job to methodically go through your catalog and weed out this duplication. A common misstep occurs where organizations create whole new SKUs which represent a bundle of two or more products commonly sold together. This replication often gets out of control very quickly, and before you know it, your catalog of 1,000 products is now 2,000, since half of them are actually mashups of other SKUs. These need to be identified and separated back into their separate parts, so that CPQ bundling logic can properly build these bundles and apply rules to each. Admittedly, SKU deduplication can be…

 


 

Want to keep reading? Download the complete white paper: Guide to Product Bundling: Firsthand Experience and Knowledge From Salesforce CPQ Experts.

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