Bundle Building: 10 Benefits to Boost Your CPQ Performance

When you think of a bundle, I would imagine your first thought of is the commercials on TV advertising the packages put together to bundle phone, TV and Internet in amazing packages aimed at getting you as a customer and treating you to a nice discount for the first 12 months of the deal.

What we are referring to when we mention bundles is a bit different from what is advertised on TV. The concept is similar but different in application and execution.

When it comes to bundles in the world of VARs and MSPs, we are referring to the action of combining products and services during the CPQ process to accomplish several end results:

1. To speed up building solutions and getting that quote to cash timeline shortened. 
2. To ensure accuracy when you are building solutions for customers that have many different pieces.

However, these are not the only results that bundling accomplishes. There are ten distinct advantages to leveraging the "power of the bundle" when building technology quotes.

Before we dive into, we should probably give a little background on what a bundle is and some of the challenges with legacy CPQ software in managing bundles.

What is a bundle?

A bundle is the combination of products and services to provide a managed service or solution. There are many different examples of what a bundle can look like, for example:

• Hardware and licensing to create a unique or custom solution
• Software, services, and licensing to create a managed service offering

A bundle if created properly can speed up the quote building process and eliminate errors as well.

Types of Bundles

Bundles can come in different configurations to achieve specific end results. These are two of the configurations that are the most common when it comes to bundling.

Standard Bundle - A standard bundle allows you to combine multiple items that are typically sold repetitively and add them to the catalog as a bundle. When you are creating BOMs either manually or by using one of the guided workflows, these standard bundles can expedite the process. For instance, if you were selling a WiFi installation bundle with an access point, mount, cable, installation and licensing would ensure you had the correct items every time and the correct quantities every time.

One SKU Bundle - A one-SKU bundle combines multiple components into a single line item, simplifying what the customer sees while keeping your operations organized. For example, a managed firewall service bundle could include:

• Monthly management
• Onboarding fees
• License costs for monitoring or management software

To the customer, it’s a single line item for the managed service. For your business, it separates into recurring, one-time, or term-based charges, streamlining both sales and operations.

3 Problems with Today’s CPQ Software and Bundles

Multiple challenges exist with current bundling methods in legacy CPQ software.

Problem #1: Manual Pricing Updates

Manually updating pricing for bundle components instead of having it automated is frustrating when you factor in the number of bundles that you have created and the number of products, and services that those bundles contain.

Problem #2: Combining Services with Labor Agreements

Being able to dynamically address these combinations was fraught with complexity and made it painful to achieve a simple process to bundle them together. The ability to have granular, flexible control of pricing, discounts and margins was also missing for us with the CPQ solution we were using. This inability forced more manual intervention to adjust these items and, in the end, forced us away from being able to effectively utilize bundles in our sales process.

Problem #3: Fulfillment

I know this is outside of the CPQ process, but it impacts your quote to cash workflow and should be addressed. The fulfillment process requires bundles to be “unbundled” to separate out all the components that needed to be ordered from different vendors and suppliers. Again, we had to resort to a manual, burdened process to perform this and it added to the pain of managing bundles to the point it reduced the efficacy of what we were trying to accomplish.

Ideally, what we were trying to achieve in the end was also the ability to realize some automation of building solutions by attaching bundles to products. Again, those efforts were thwarted by the inability of our legacy CPQ solution and how it imposed limits on what we could do.

Modern Bundle Building: 10 CPQ Benefits

To properly modernize the CPQ process there needs to be a way to address how bundles are built, managed and presented.

A complete rethinking of bundles is necessary including everything from the sales process through to fulfillment. If built correctly, and we believe we have done that, here are ten benefits your business can gain from modern bundle building.

# 1 - Efficiency

The faster you can get an accurate quote and proposal into your customers’ hands, the higher your win rate. Bundles help by ensuring the right components, peripherals, and services are included in every solution. This eliminates the tedium of manually adding items like power adapters, mounts, cables, and services every time hardware is added to a bill of materials. With a bundle, select the hardware, and all accompanying components and services are automatically included.

#2 – Accuracy

Accuracy is a margin killer if there ever was one. With a bundle you can realize a reduction or ideally an elimination of errors in your quotes and proposals. If the bundle is arranged correctly and all the components to a solution are included, then no matter how many times that solution is added to a quote it will be accurate every time. Throw in some pricing automation and intelligence around deal structure limitations and your business is a quote generating machine!

#3 – Quote Shopping

As a VAR/MSP, we knew our quotes were sometimes shopped to competitors. In one case, a manufacturer we worked closely with sent us a proposal they believed was ours—only to discover another partner had submitted it for the same customer. The customer had removed our name and logo, shared it with another company, and that company submitted it for deal registration as their own. Bundles help prevent this by combining all components and services into a single package, concealing individual line-item costs and making it harder to shop your quotes.

#4 – Increase the perceived value of your solution

Perception is nine tenths of the battle and if you can achieve a higher perception for the value of your solution, you are much closer to the goal line. By combining the tools, products and services that encompass a complete solution, the perception of the value of your offering is heightened by the fact that it appears unique and custom. It also appears cleaner and elegant when the customer does not have to see the half dozen lines of SKU’s that comprise this solution.

#5 – Differentiation from the competition

Building out unique solutions is just one way to differentiate yourself from your competitors. Achieving that can be accomplished by leveraging the power of the bundle. Combining the tools, products and services that you offer into a bundle or bundles that uniquely address challenges or pains for your customers makes you stand out. Your solution then is your own and cannot be shopped, compared or evaluated against your competitors.

#6 – Pricing Flexibility

Another advantage to leveraging the power of the bundle is being able to have pricing flexibility. With bundles at your disposal, you have the capability to strategically build solutions that are targeted at specific price points. You can even play with margins between the cost of hardware, licensing, tools and services so that you can maintain a high profit margin but still offer a very competitive solution offering.

#7 – Make your business “sticky”

Acquiring customers is one thing; keeping them is another. We always compared the cost of acquiring customers to the cost of retaining them, and retention was consistently less expensive—but it required strategy and consistency. Bundling can support this effort. Unique, bundled solutions not only deter customers from shopping around but also make renewals more likely. Bundles also simplify purchasing, increasing your “stickiness” and reducing the chances of customers switching to competitors.

#8 – Operational streamlining

Bundling allows you to adapt your solutions when changes arise, such as migrating to new tools or products. Companies cease operations, sunset products, change functionality, or impose price hikes, often forcing solution adjustments. With a bundle, you can make these changes within a single SKU, maintaining consistency for your customers.

Bundling also drives operational efficiency by enabling unbundling for fulfillment. While bundles simplify quoting and proposals, fulfillment requires ordering individual components. As a former VAR/MSP, we faced this challenge and the inefficiencies it caused. The right bundling solution addresses this need, streamlining fulfillment without sacrificing efficiency.

#9 – Simplify decision making

Vendor comparisons drag out the sales process and waste time. Pitching your solution’s features against a competitor’s is costly and often unnecessary—both vendors likely meet or exceed the customer’s needs. Simplify the decision for your customers by eliminating the need for side-by-side comparisons. Bundles shift the focus to solution selling, addressing customer challenges and pain points. By emphasizing the solution’s benefits over product details, you make it easier for customers to choose you.

#10 – Enable cross selling

Bundling enables seamless cross-selling with minimal objections. Pair complementary products and services into bundles to create easy cross-selling opportunities and potentially enhance support operations. For example, bundling tools that improve oversight and network management can lead to better support outcomes.

An effective bundling practice modernizes your sales process, but without the right tools, you’re left managing bundles manually—or not offering them at all.

If you would like to see the power of bundles at work and how TechGrid can modernize your CPQ process, contact us for a demo.