Have you ever gone online to purchase a sofa for your new home? With the help of AR technology, you can go to the furniture dealer’s website, choose a sofa, point your device towards your living room, and instantly see what the sofa would look like in your home. You can mix and match colors and designs to complement the existing decor in your living room, effectively eliminating any guesswork from your purchase. Then you put the options in your cart, check out, and your pricing—with all of your custom options—is configured for you. Easy, right?
While you’re basking in the ease of online shopping, there’s some serious work going on in the back end. Configure, Price, Quote software, or CPQ, is doing the heavy lifting, simplifying the robust and often confusing practice of factoring a sale price across a vast spectrum of variables within a company. CPQ doesn’t just slash the time and money required to run these operations; it empowers businesses with the ability to scale and grow easily.
But how does a CPQ software solution help a business realize these benefits? I had the chance to talk with Frank Sohn, President and CEO of Novus CPQ, about how CPQ is revolutionizing retail and many other industries.
Take advantage of revenue benefits
The Aberdeen Group has found that 44% of all sales teams express hitting revenue goals as their top pressure. Oftentimes, burdensome sales processes contribute to this pressure.
“One of the biggest benefits of CPQ adoption is the increase in revenue that you’ll see,” Sohn said. “That means less stress on your sales team and more money in the company pocket.”
As Sohn explained, there are three big revenue benefits you will see with a CPQ solution: process, upsell, and optimization.
- Process: CPQ processes reduce the resources required to operate your quote-to-cash endeavors. While this benefit isn’t easily quantifiable, you’ll notice a reduction of overhead costs, which will lower your bottom line in the long run.
- Upsell: This is where you’ll see real revenue flow. By standardizing offerings in the system and eliminating the need for a rep to think about the sale, you ensure that every combination of products or services has an upsell or cross-sell opportunity.
- Optimize: While easier said than done, maximizing your margins is at the center of how you drive your business. Getting the most out of your profit margins takes a lot of logical thinking and data. Most companies already have these logistic algorithms tucked away in a tool such as Enterprise Resource Management (ERP) software. But unless you are applying this knowledge to your quoting practices, you are not operating as efficiently as you could be.
As Salesforce CPQ black belt Gilles Muys states, “When you put the highly flexible price configuration environment into human hands, there are bound to be errors. This means a lot of time and money falling through the cracks.”
But it’s not just the manufacturing industry that is at risk for error. Humans, as much as we may try not to, make mistakes. And when you consider the myriad of mistakes that can happen throughout a sale (missed opportunities, improper discounting, bad approvals, etc.), the results can slowly bleed you dry.
Let’s say you are a sales rep. You are building a quote for a customer, but particular components of that quote are only valid for 30 days. So that means if the customer returns for a renewal of the product after the 30-day period, the quote will be higher. A human is likely to click through the order and then find out that the old part isn’t even available anymore after 30 days.
A CPQ solution allows you to eliminate errors like this as early and quickly as possible. Rule sets and built-in automation helps you and your reps adhere to certain guidelines.
Close more deals
Most people moan and groan just at the sound of the word “training,” especially in a sales environment. The more time you spend training, the fewer deals you are closing. You want your team on the sales floor as quickly as possible, so it is in your best interest to adopt a centralized and streamlined workflow that is quick and intuitive to use.
The numbers don’t lie: another study from the Aberdeen Group concluded that the top Best-in-Class firms turn 30% more of their quotes into sales. This has a direct correlation to the number of Best-in-Class firms who have adopted a CPQ solution—a number that is still on the rise amongst the top performing companies.
The ability to convert a quote to a sale is all about the timing. That means minimizing roadblocks, internal friction, and operational confusion for users. Let’s take Salesforce, the world’s biggest Customer Relationship Management (CRM) platform, as an example.
As Sohn explains, “Salesforce has seen such success because it’s simple: the look and feel is familiar, users know where every function is, and the system automates the functions they don’t know. With Salesforce, a quote is just a button away. The tool’s ease of use allows users to focus on more value-added tasks, like closing deals.”
Produce a better customer experience
With the seemingly infinite number of consumer options available today, it’s all too easy for a customer to leave you for a competitor. In fact, 66% of consumers say they would be likely to switch brands if they are treated like a number instead of an individual. You don’t want to have your customers feeling rushed through the quoting process and scare them away. In the same vein, you want to make sure it is streamlined as much as possible.
“Clunky sales processes are also a waste of both you and your customer’s time,” Sohn said. “There is a fine line between a machine-like sales process and an unrefined slog to the end of a deal. That is where a CPQ solution shines.”
Each person or business that you engage for a sale is different. But, in some ways, they are also the same. CPQ software helps you identify those static attributes from customer to customer, allowing you to create automation and rules that speed up the quoting process. For the less predictable quoting operations, you are still able to quickly and efficiently tailor a deal that’s right for them, giving every customer a customized experience.
Whether you are trying to climb to the top or maintain your revered position in the marketplace, a CPQ solution is a necessary addition to any company’s sales efforts. It’s a no-brainer: no other single piece of technology will provide you with the same breadth of capability, customization, savings, and ability to scale as a CPQ solution will. If you care about the future of your business, it’s not a matter of if. It’s a matter of when.