Adding the right CPQ software to your sales process is a game-changer for your organization’s growth and profitability. The automation and rules-based elements take so much time, energy, and risk out of the equation, setting you up for lasting success. In this article, Mitch Lee, Profit Evangelist at Vendavo, explains how to integrate CPQ into your sales process, the benefits of having the right software, and what goes into making the entire setup as effective as possible.
CPQ, or Configure, Price, Quote, is an instrumental sales tool that helps businesses optimize their sales process. CPQ enables sales teams to efficiently and accurately configure complex products or services, determine precise pricing, and generate professional quotes – all within a single platform.
By integrating CPQ software into the sales process, B2B companies can achieve several key benefits at scale.
- CPQ automates many manual tasks in the sales cycle, allowing reps to spend more time selling and less time on administrative tasks.
- A CPQ-driven sales process also leverages rules-based pricing engines to ensure consistent, up-to-date, and error-free pricing across all quotes and proposals.
- CPQ streamlines the approval process by automatically routing quotes to the right people, which can be a time-consuming and cumbersome process internally for businesses.
Building a sales CPQ process has become essential for companies looking to achieve successful selling, faster pricing, and accelerated approvals.
So how do you integrate CPQ into your sales cycles?
This article breaks down the stages of the sales process, and how to integrate CPQ into this vital cycle that directly influences a company’s profitability and ability to accomplish its greater mission.
Why Build a Sales Process?
The sales process is especially critical in B2B markets as the sales cycles tend to be longer and more complex, involving multiple decision makers, higher price points, and more extensive research and evaluation by the buyer.
By building a clearly defined sales process, businesses can ensure their sales teams are effectively prospecting and qualifying leads, presenting solutions persuasively, and closing deals efficiently. A clearly defined sales process is also a starting point for improvement and optimization.
Optimizing the sales process helps drive predictable revenue growth and cultivate strong customer relationships. It also helps businesses achieve several key objectives:
- First to quote
By streamlining the quoting and proposal generation process, companies can ensure they are the first to present a comprehensive, professional offer to the customer. This “first mover” advantage can be crucial in competitive B2B sales environments.
- Pricing with precision
An effective sales process, powered by CPQ, enables companies to dial in the right price point that is both competitive and profitable. This helps avoid the credibility issues that can arise from pricing that is either too high or too low. - Data-driven recommendations
A robust sales process allows companies to leverage customer data and past purchase history to make informed, personalized product recommendations. This demonstrates the vendor’s deep understanding of the customer’s needs and can foster a stronger, more strategic commercial relationship. - Faster approvals
By automating the approval workflow within the sales process, companies can ensure quotes and proposals are reviewed and signed off on quickly, minimizing delays and providing customers with a seamless experience.
Establishing an effective sales process empowers companies to be more responsive, relevant, and valuable to their customers. This, in turn, can lead to higher win rates, faster sales cycles, and stronger long-term relationships – all of which contribute to sustainable revenue growth.
The challenge is, how do you build a more effective sales process? Here’s how to use CPQ to improve your sales cycles.
How to Build a CPQ Sales Process in 7 Steps
The CPQ process is a critical sales framework that enables companies to more efficiently sell complex, customizable products and services at scale. There are several fundamental steps B2B companies should consider when establishing an effective CPQ sales process.
1. Assess Your Current Sales Process
Begin by thoroughly documenting your existing sales process. Evaluate each step to determine its necessity and effectiveness, ensuring the right resources are involved. This initial assessment helps identify potential bottlenecks, improvements, and areas for optimization.
2. Evaluate CPQ Capabilities
Research and identify CPQ solutions that best fit your business needs. Focus on platforms that offer essential functionalities while being user-friendly and easy to implement. Consulting with experts who have experience in deploying CPQ systems in similar business environments can provide valuable insights.
3. Configure Your Products
With the help of your chosen CPQ solution, take the time to utilize product and service configuration tools to enable sales reps and customers to easily select appropriate features, components, and options. This step ensures that every configured offer meets specific customer needs and is accurate, reducing the need for extensive training.
4. Align CPQ Strategies with Your Sales Processes
Customize your CPQ strategies to fit your organization’s specific requirements. Avoid overly complex features that do not add significant value. Concentrate on core selling activities that directly address customer needs.
5. Determine a Rule-based Pricing Strategy
Utilize the CPQ system to automatically calculate accurate pricing by considering various factors such as costs, promotions, inventory levels, and competitor pricing. A rules-based pricing engine supports sales teams by providing the necessary data to optimize pricing strategies and improve margins.
6. Automate Your Quoting and Approval Workflow
Leverage the CPQ system to generate professional, branded quotes and automate the creation of these sales documents to streamline the sales process and better position your company as a strategic partner well before the close. Before finalizing quotes, ensure they undergo a predetermined approval process. The CPQ should automate this by routing quotes to the correct approvers based on predefined rules, minimizing delays, and facilitating quicker responses.
7. Embrace Contract and Change Management
Manage various aspects of contract administration within the CPQ, including subscriptions, licenses, and renewals. Features should include prorated pricing, end-date tracking, and tools for comparing and merging contract versions, ensuring flexibility and compliance. In the same vein, recognize that implementing a new CPQ process is a significant organizational change. Develop a comprehensive change management strategy to address potential cultural and operational challenges, ensuring smooth adoption and effective use of the CPQ system.
Why is a Structured Sales Process Important?
Implementing a well-defined, structured sales process is crucial for companies looking to drive success and growth. Below are several compelling reasons why a fleshed-out sales process is so critical for organizations, particularly those in B2B markets:
- Consistency and efficiency
A standardized sales process ensures that every sales representative follows the same steps, maintaining consistency in the way deals are approached. This not only helps deliver a unified brand experience but also allows companies to identify best practices and optimize their sales strategies over time. - Improved productivity
By breaking down the sales journey into distinct stages, sales reps can focus on specific tasks and activities at each step. This improves time management, reduces wasted effort, and enables reps to be more productive overall. - Predictable revenue generation
A structured sales process provides visibility into the sales pipeline, allowing B2B companies to forecast revenue more accurately. This predictability is essential for effective business planning and resource allocation. - Enhanced customer experience
Companies can better understand their customers’ needs, pain points, and buying behaviors with a standardized sales process. This insight allows reps to deliver a more personalized, consultative approach that builds trust and strengthens customer relationships. - Identification of bottlenecks
A clearly defined sales process makes it easier for businesses to identify areas of improvement or bottlenecks in the sales cycle. This enables them to optimize their strategies and address any inefficiencies in a targeted manner. - Scalability and growth
As B2B companies expand into new markets or add more sales reps, a structured sales process ensures consistency and scalability. This allows the business to maintain high-performance standards and drive sustainable growth. - Onboarding and training
A documented sales process serves as a valuable resource for onboarding new sales team members and training them on best practices. This helps ensure a shorter ramp-up time and more effective sales execution.
By fine-tuning a sales process tailored to the unique needs of their customers, companies can optimize their sales strategies and empower their sales teams to be more productive and successful.
What Makes a Great Sales Process?
A well-designed, comprehensive sales process is the foundation for driving successful selling, fast pricing, and faster approvals in a B2B context. But what exactly defines a “great” sales process? Here are the key attributes that characterize an exceptional B2B sales process:
- Repetitive tasks are automated for better time allocation
A seamless sales process streamlines and automates repetitive tasks, allowing sales reps to spend more time actively engaging with customers and less time on administrative work. - Prospecting, pricing, and sales cycles are optimized
By guiding reps through a structured series of steps, a great sales process enables them to move prospects through the pipeline more quickly, reducing the overall sales cycle. - Workflows for quoting and approval are streamlined
An effective sales process incorporates automated approval workflows that route quotes and proposals to the right stakeholders based on predefined rules, minimizing delays. - Leverages data-driven insights and strategic throughput
With an optimized sales process supported by CPQ technology, businesses can capture valuable customer and deal data that can be analyzed to identify trends, optimize strategies, and make more informed business decisions. - Lead qualification and conversion rates continually improved
Well-designed sales processes ensure sales reps focus their efforts on the most promising prospects, improving lead qualification and conversion rates. - Emphasis on strengthened retention and repeat customers
By delivering a seamless, personalized customer experience, a great sales process can foster stronger, longer-lasting relationships and drive higher customer retention and repeat business.
Automation and rule-based processes are key to improving the sales process and enabling sales teams to focus on the most critical, high-value activities. By leveraging technologies like machine learning and AI to support sales effectiveness tools, companies can offload routine tasks and free up their “deal desks” and “approval committees” to concentrate on the complex, nuanced situations that require their expertise.
Ultimately, a great B2B sales process balances structure and efficiency with the flexibility to adapt to each customer’s unique needs, effectively driving sustainable revenue growth and a superior customer experience.
The CPQ Sales Process Bottom Line
Implementing an effective CPQ sales process is a critical step for companies looking to actualize successful selling, quicker pricing, and faster approvals. By guiding sales reps through the key stages of product configuration, pricing, quoting, approval workflows, and contract management, CPQ empowers teams to be more efficient, responsive, and valuable to their customers.
By leveraging the best CPQ tools on the market and following these proven best practices, companies can transform their sales operations and position themselves as strategic partners to their B2B customers. With a well-designed CPQ sales process in place, businesses can look forward to increased productivity, more accurate pricing, faster closings, and stronger, more profitable customer relationships.
Reach out to Vendavo to speak with an expert about how CPQ can help your operations
Frequently Asked Questions (FAQs)
What is a Sales Process?
A sales process is the series of systematic steps your sales team takes to move a prospect from an early-stage lead to a closed customer. In short, this structured approach provides a framework for sales reps to consistently close deals.