18 Feb 4 reasons product bundling should be part of your CPQ strategy
by Kevin Willemse
If you’re like many sales teams, you tackle the core responsibility of generating complex, customized, but accurate sales quotes—less than 30% of electronics manufacturers, for example, can generate accurate quotes within 24 hours, according to Adeon industry research.
Most businesses recognize the value of sales quotes that are optimized for each customer’s preferences and needs, as well as for the company’s bottom line, but they don’t necessarily have a strategy in place for ensuring that these quotes are generated in a timely, efficient way (while protecting your margins). This can often be alleviated by introducing a bundling strategy into this process.
Product bundling enables businesses to create configurable, customized packages of items that are more valuable to customers than the sum of their parts. More importantly, predetermined rules and logic ensure any bundle configuration quoted is both technically and financially viable. With product bundling, sales teams create new opportunities to recommend bundled solutions and add-on products (as opposed to myopic unit sales) that are optimized to the customer’s needs.
Without the correct tools, automation, and front-end configuration and guidance in place, introducing bundling into your sales process becomes unwieldy or poorly governed. But when integrated into your Salesforce CPQ platform, product bundling becomes automated, seamless, and a powerful asset to your sales team. Here are four essential reasons that you should integrate product bundling into your Salesforce CPQ selling strategy:
1. Product bundling will increase your deal size
Intuitively, the average business understands the power of product bundling as a strategy for driving sales, and academic research backs up this intuition: Not only do businesses sell more when they offer bundled products, but businesses also are more likely to recognize holistic solution value and make purchase decisions sooner, according to a seminal study on product bundling by researchers at Yale and Carnegie Mellon University. CPQ-powered product bundling is especially powerful because it takes the guesswork and inconsistency out of maximizing the potential bundle options you are quoting. With CPQ bundling, sales reps can also automatically be prompted about cross-sell and upsell opportunities that they can share with customers, including lucrative recurring revenue opportunities such as optional warranties and service add-ons.
2. Bundling will mitigate human error
One of the most frustrating parts of product bundling is ensuring that the products are eligible and appropriate to bundle together. When a product is improperly added to a bundle, it creates confusion, frustration, and waste for all parties. In the end, the customer doesn’t get what they want, the salesperson loses credibility and commission, and often a downstream party—likely the order fulfillment team—ends up dealing with the error; a negative, highly inefficient outcome unlikely to stimulate repeat business. Salesforce CPQ’s product bundling helps avoid this unfortunate scenario altogether. CPQ automatically blocks attempts to add products that cannot be part of a bundle and takes care of automatically adding mandatory components such as accessories, shipping, and warranties and making recommendations for popular cross/upsell or complementary products. CPQ also offers sales reps powerful, customizable search options when retrieving information from the product catalog, helping sales teams quickly find accurate information for sales quotes and ensure they are offering the correct product in the first place, even where the catalog contains hundreds of thousands of SKUs.
3. Product bundling will boost customer satisfaction
To many sales reps, closing deals is the most important part of building customer relationships. But what the customer cares most about is ensuring that they’re getting the best possible product mix (solution) from the most trustworthy, helpful seller. A particularly effective way to help ensure customers form these impressions is to adopt a sales philosophy known as value-based selling. In value-based selling, the sales rep serves in a consultative role, helping the customer make optimal purchasing decisions that, in turn, help the customer to see their purchase in a more favorable light. Effective value-based selling requires an intimate knowledge of your product catalog applications and your customer’s needs which can take many years to establish, but bundling can massively reduce this learning curve. Salesforce CPQ helps sales reps optimize customer buying decisions by offering up helpful, insightful ideas for product bundles and add-ons that feel relevant and tailored to the customer. When customers sense that their sales rep is knowledgeable and helpful, the sales rep becomes a true partner and asset for the customer throughout the sales cycle, which ultimately enhances customer satisfaction.
4. Bundling will ensure sales success strategies become replicable
On any sales team, there are all-stars who have such command of SKU catalogs (and their customer preferences and habits) that they instinctively know how to present and bundle solutions that customers will instantly love and want to buy. The challenge is that this intuition doesn’t come naturally or quickly to every sales rep. Salesforce CPQ helps even the playing field by helping even a new sales rep walk through the bundling and solution selling process like a seasoned pro. Even better, sales reps can add particularly popular product bundles to their favorites list for quick reference and quoting and share their lists with other sales reps on their team. Finally, coupling features such as CPQ bundles alongside guided selling questions means that suggestions automatically pop up in the CPQ system as soon as the sales rep begins selecting products, which further enhances credibility, efficiency, and deal value. These customized questions update in real-time based on input, consider all deal criteria, and then gather key information to ensure the viability and mutual benefit of the proposed quote. This may include product application information, quantities required, potential add-on recommendations or mandatory items, and specialized customer/deal specific needs.
When sales teams use Salesforce CPQ, they never have to worry about the clumsiness, inconsistencies, and risks commonly associated with product bundling. CPQ’s product bundling feature enables complex, custom, and accurate quotes to be generated on the spot, helping businesses to increase their deal sizes, accelerate the deal cycle (preconfigured bundle rules mean fewer approvals required), mitigate errors inadvertently made by sales reps, boost customer satisfaction, and readily replicate winning product bundling formulas.
Simplus has helped countless businesses streamline and automate the custom quoting process. To learn about how Simplus helped a company reliably generate quotes for complex multi-product bundles (where every product had a different discount amount!), please check out this Simplus case study with EC Hispanic Media.
If you’re interested in learning more about how to configure product bundling to supercharge your Salesforce CPQ instance, please reach out to Simplus’ CPQ implementation experts. We’ll be glad to walk you through the best-practices approaches we would take to streamline, automate, and simplify your sales team’s bundling features.
Kevin is a Director in Simplus’ Strategic Advisory Practice, focused on bringing valuable transformation to customers looking to maximize their investment in Salesforce.com alongside their integrated systems and business processes.