In part one of this blog series, we took a look at how CPQ has evolved. Here, we take a look at what that evolution has done to improve the sales process.
3 CPQ Benefits for Sales
CPQ can make a big difference for sales teams today. Here are three benefits:
- Offer your customer a quote faster than your competitor
- Offer your customer correct and buildable products every time
- Offer your customer prices based on product, customer and buying behavior
Let’s look at each of these CPQ benefits in more detail.
One of the key challenges for every sales rep is to provide an interested customer a quick quote. We have to keep in mind that a “quick” quote can mean something different for every customer/industry/location etc. In some cases it may mean preparing a quote in 2 minutes, in other cases it can mean preparing a quote in 4 hours. For our purposes, let’s define ideal as when a quote can be started during a meeting with the customer. This is important because according to Gartner, the first quote has a MUCH higher probability of winning.
To create a quote quickly, sales reps or channel sales partners basically require the following from the CPQ solution:
- Easy access
- Access to the CPQ Solution from any device, at any time
- CPQ tools must make a sales person’s life easier; it shouldn’t be another tool they have to maintain for the benefit of their management team. It must be possible to learn how to use the CPQ tool quickly since extensive training classes/webinar etc. typically inhibit the adoption of the tool
- The information needs to be accurate so sales reps and channel partners trust the information
Another key challenge for sales reps whose companies offer customizable products is to know at all times what is and what is not a buildable product, what is the correct price for a product and what approvals are required before a quote can be issued. In many cases this is not a simple exercise and to make mistakes here quickly translates into an undesirable user experience. To ensure a great customer experience and to get satisfied return customers it is important to get the quote right every time.
To create accurate quotes every time, sales reps or channel sales partners should require the following from a CPQ solution:
- Up to date rules (e.g. engineering, sales)
- To ensure all product, pricing and workflow related rules are up-to-date at all times, it is best to have business owners maintain these rules.
- Frequent and infrequent users need to get appropriate help to ensure a good user experience and hence it should be possible for different users or user groups to use the tool differently.
- Do not allow users to make inaccurate decisions such as configuring a product that can’t be built. Alternatively if the user configures an unbuildable product they need to get clear guidance on how they can get back to a buildable product. The option to allow unbuildable products is typically required when all product options are shown at all times.
The last key challenge for sales reps and channel sales partners is the need to offer every customer a specific price based on products and buying behavior. This price should be precise and visible during product configuration. Margin health as well as required approvals should also be shown during product configuration. This shortens the quote life cycle, improves the user experience and the company’s bottom line.
Here it is important to note that the pricing source can be in an ERP system, a third party system or in a CPQ tool. This needs to be taken into account (by IT) regarding CPQ tool performance and scalability.
Since offering the wrong price (e.g. discount is too high) to a customer is a common and expensive challenge for many companies, the following CPQ capabilities are important. They also ensure that a company can run profitably while the user experience gets better with more precise data.
- Sales reps and channel sales reps benefit from accurate pricing information (or Price Guidance) in the configurator by understanding the margin health and what discounts require what approvals
- AI / ML / NLP
- Use of Artificial Intelligence/Machine Learning and Natural Language Processing to get the most precise price for a customers quote
While a CPQ tool provides more advantages than I can mention here, I hope it became clear what every sales user can expect from a CPQ solution.
Editor’s Note: For more information on how to maximize every quote, see Vendavo Intelligent CPQ.