What is CPQ
What is Configure, Price, Quote (CPQ)?
Unstick your operations with CPQ
It’s one thing to make a sale. It’s quite another to find that too much was promised in hopes of closing the sale. Many companies have experienced the uncomfortable position of having to go back to the customer to let them know the options they’ve chosen aren’t available or the discount they’ve been promised is simply impossible. Often, companies will meet the initial agreement, if possible, but at great expense. The simple truth is--inaccurate quotes are time consuming and costly.
Almost every company has had an experience with errors in quoting. Based on these experiences, specific rules are set in place. Some of these might be a more stringent review process, or having engineering sign off on every configuration, or perhaps checking to see if materials in stock before an order can be approved. But with each review and each safeguard put in place, the quote process becomes clogged in internal processes and becomes more tedious for the customer, weakening the chance of a sale.
So let’s face it: it doesn’t matter if your salespeople are making sales if your manufacturing can’t produce the orders. And, it doesn’t matter if you have an order for a million widgets if the discount given makes it a dubious endeavor to produce. And, of course, you don’t want to lose the customer in the entire process.
Enter CPQ. What does CPQ stand for? Literally, CPQ stands for Configure, Price, Quote, but CPQ represents a sales solution that leads to quicker and smoother closings. This software is designed to provide accurate pricing across any given scenario; taking into consideration optional features, customisations, quantities, discounts, and rules, therefore allowing sales reps to quote prices with accuracy. Eliminating the need to jump through various departments for approval. CPQ understands the inter-functionality of the organisation.
While not many companies report using CPQ in addition to their CRM and ERP, the trend is growing. That’s because when CPQ is deployed effectively, companies are reporting very successful results. Let’s look at how CPQ can lead to increased closings:
CPQ helps focus on process
Most of the sales journey can be managed through CRM (Customer Relationship Management) software, though many businesses don’t take advantage of full integration of the software into their sales processes. Full integration between CPQ and CRM, allows for an entire updated approach to sales. Denis Pombriant, industry CRM expert and author of the book, Solve for the Customer, explains in his CRM Management article about the importance of taking a process approach in selling. CPQ, he explains, is a crucial piece to looking at the entire scope of the selling process and making it flow smoothly. Of course, delivering a quote and agreeing to terms is the part of the sales process we want go off without a hitch.
“Until recently, CPQ was a completely manual process that sales reps engaged in without much oversight,” explains Pombriant. “Today we try to generate just one quote, and the available technology helps us avoid making what were once common mistakes. For instance, modern CPQ can help ensure that if product B needs to be included with a sale of product A, it is.”
Having preset rules for configuration in the system ensures configurations requested are possible and discounts are already approved or will be routed to people who can approve them. “Best of all,” explains Pombriant, “the technology can accomplish all this much faster than email or other types of authorisation that sales people sometimes forget to follow through on.”
By allowing CPQ technology to oversee the quoting process, the customer’s journey from initial research to price requests can flow smoothly. In an age where buyers complete most of their research online, it’s essential to have a Configure Price Quote system in place to match the ease of online research.
Implementing CPQ shows you understand the customer’s journey
While it’s common knowledge that the buyer is engaging with sales staff later and later in the sales process due to the availability of online research, Lori Wizdo of Forrester notes, “In a recent survey, 74% of business buyers told Forrester they conduct more than half of their research online before making an offline purchase.”
However, each industry’s customer is different and Wizdo cautions not to make sweeping assumptions. “All of these arresting statistics about buyers represent buyer behaviour on average,” she stresses. “Averages are great because they show us directional change in the aggregate. But savvy marketing practitioners know that it’s irresponsible to build your customer engagement strategy on aggregate trends.”
Both Pombriant and Wizdo highlight the importance of journey mapping, the visual understanding of a buyer’s process in making a purchasing decision. CPQ integrated with CRM adds more data and insight into purchase decisions, allowing companies to improve their strategy. CPQ Software can help sales reps determine how likely customers are to buy, what types of discounts to offer, and what other services or products would be of interest.
CPQ reduces friction at the closing stages, making the deal more likely
Providing a quote should be a quick and simple process for both the customer and sales staff. Oren Similansky interviewed Peter Ostrow, principal analyst of sales effectiveness at Aberdeen Group, and explains that “keeping friction to a minimum at a sale’s closing stages is crucial.” Companies that use CPQ with their CRM platforms, Ostrow asserts, perform better than those that don’t. Ostrow insists that the discussions sales staff have with customers need to be “more to the point.”
If the quoting process is cumbersome, inaccurate, and slow, your credibility is eroded. Throughout the customer’s sales journey, your company should be vying for the position of trusted advisor and solutions consultant. Whether it’s an individual buying a new car or a business looking for office equipment, buyers are looking for solutions. Effective salespeople listen to customers’ concerns and help find solutions to their problems. Smooth configuration and quoting procedures not only make the buying experience less tedious for customers, they reinforce your company’s and your salespeople’s position as a trusted advisor.
CPQ helps sales flow smoothly
By paying attention to the customer experience and making the buying journey--from initial research to closing-- a smooth one, industries are seeing an increased ability to help their customers find solutions. CPQ ensures the close of the buyer’s journey can be efficient. Salesforce customers are seeing good returns as a result of adopting CPQ. Domino Printing Sciences is seeing 80% faster quote delivery. Cloudera is reporting their quoting process is three times faster. On average, Salesforce CPQ customers are seeing the quoting process speed up by three times, all with higher quote accuracy.
When your business focuses on the entire sales process through integrated CRM and CPQ, you will be able to assist the customer on their journey while making the quoting process run smoothly and efficiently.