I recently celebrated my eight year anniversary at Salesforce, and over the years I have worked in three different orgs: Sales, Alliances, and Product Marketing. Even though those roles sound pretty different, a common theme has impacted my work every single day at Salesforce — quoting. I have created hundreds of customer quotes and contracts of my own and have done hundreds of demos of Standard Quotes.
Now, in my new role as Director of Product Marketing for Salesforce Quote-to-Cash, I am regularly showing people how Salesforce CPQ works. Everyone always asks, “Why would someone want Salesforce CPQ when they can use Standard Quotes?”
That's an important question. After speaking with countless Salesforce CPQ customers, five key reasons emerged as to why someone would want to make the move.
According to Gartner, more than 80% of software vendors will change their business model from traditional license and maintenance to subscription by 2020. With new business models, there must also be new technology put in place to support quoting, contracts, and revenue recognition. Even companies who aren't traditional software providers are getting into the subscription business. Look at GE, “The 124 year old software start up!” Who would have seen that coming?
The move to subscription business is happening all around us, and companies must put the right tools in place to be able to work effectively with this new model. Quoting for subscription products means that your tool has to support the concept of time, and be able to support add on and co-terminus quotes to align with existing contracts. And unlike tradition software models, those contracts also need to go through renewals—a critical step in the customer lifecycle.
The buying process today is more complex than ever before. According to an Accenture study, 94% of B2B buyers conduct online research at some point in the buying process. So while buyers are more informed, there’s less relationship selling, and sales cycles are definitely getting slowed down. In fact, B2B sales cycles have increased in length by over 20% in the last five years. Once your reps have navigated through the complexity of the sales cycle and negotiations, all they want to do is get a quote in their prospect's hands ASAP!
Companies who move to Salesforce CPQ want empower their sales reps to quickly create their own quotes while still ensuring accuracy and compliance. By leveraging the product configurator, you can create complex product rules and logic to ensure the correct product makes it to your customer every time. You can also implement pricing rules, such as volume discounts or tiered pricing, which don't need to go through a lengthy approval process. This improves the customer buying experience and accelerates the overall sales cycle. More importantly, your reps can focus their time and energy on selling, not trying to figure out correct product SKU combinations. Our customers have told us that Salesforce CPQ decreases their average time from quote to close by 26%.
With cloud software, buyers often want to start with a pilot group before they are ready to commit to a complete roll out. From a sellers perspective, your reps need to be able to quote license quantities with different start dates, and Sales Operations needs to manage those start dates both for provisioning and to report back to Finance for revenue recognition. When selling physical products, companies are often shipping products to multiple locations. Being able to create multiple error free orders to support that is critical! Salesforce CPQ recently release Advanced Order Management functionality to streamline and automate the order fulfilment process—whether you are provisioning software in the cloud or shipping physical products!
In any subscription business, customer success is essential to secure renewals... but as former rep, I know that when you are in a hurry to close a deal it is easy to forget about critical add-on products like premier support or an extended warranty. With product configuration rules, services and support are either required or clearly suggested, which increases service revenue and ultimately customer satisfaction. Our customer Grovo included professional services in their product bundles and increased the revenue from those services by over 300% within just a few months! Not only that, their customers are happier than ever before!
Salesforce CPQ has also released an enhanced integration with Service Cloud. Now when quotes convert, entitlements are automatically created so Support can immediately see which products are covered and the different levels of support associated with them. This provides a much better customer experience and also opens the door for support reps to create quotes of their own—to upgrade or add-on support and warranty coverage.
There are so many external factors that can make a deal go sideways or slow it down—the tools you give your reps should not add to that risk. Can you imagine if you went to a store to buy something, you had the product in your hand ready to go—and then the salesperson told you they could take your money and give you the product in about a week? That would be nuts! Customers expect a frictionless buying experience and your reps expect tools that help them sell faster and smarter.
There is no better way to deliver ROI than by extending your CRM deployment with Salesforce CPQ. I am fortunate enough to get to talk to our customers every day and hear how Salesforce CPQ is transforming their business. Mitsubishi has eliminated thousands of emails and phones calls with the Salesforce CPQ resellers network, and Grovo, the same company that increased service revenue by 300%, also sped up their sales cycle by 10%.
Want to try Salesforce CPQ yourself? Check out this interactive Guided Tour.