One of the biggest trends in sales and marketing at the moment is to increase sales efficiency and effectiveness, mainly through the streamlining of the sales process. This leads to increased productivity of your sales department, decreased sales cycle times, a massive reduction in order errors, all of which help improve customer relations and increase revenue. One of the main features of the streamlining process is to integrate any new process into existing software rather than introducing new and unfamiliar processes that can slow down the sales system.
One of the best ways to streamline the sales process in your organization is to implement a Configure, Price and Quote (CPQ) software system that can be integrated into any customer management software you already run. There are plenty of questions that businesses can have about CPQ systems, so we’ll take a look at answering some of the more common ones.
What is CPQ?
CPQ describes the process that leads up to a sales proposal, and a CPQ system or solution is software that helps businesses configure complicated product offerings, price them in the best possible way to generate a sale and then create quotes based on the pricing and product information. Ideally, CPQ software should be the bridge between front and back-end systems and take your business from lead to order in the shortest amount of time and least possible effort.
Who needs CPQ software?
Companies with complex sales processes.
If you offer a wide variety of products in a myriad of different combinations, chances are your sales reps are cutting through this complexity by resorting to familiar combinations that have been shown to work well together, even though they may not be the best option for the client. A CPQ can control the number of SKUs by indicating what types of products can be offered in the place of discontinued products and avoiding the generation of new SKUs for existing combinations. Any updates are sent out globally through to software, meaning that these updates can be rolled out rapidly and accurately. Finally, CPQ software can make the quoting process much easier for sales reps since they can tailor the product combinations to the client, and if the system is merged with a CMS, existing product combinations can be easily retrieved for re-quoting.
Large companies with rapid growth.
If your organization is growing, either internally or globally, manually updating product configurations and pricing becomes impossible due to rapid changes. As companies grow internally, they tend to add staff to various departments that need to provide quotes. If they do so on disparate systems, there’s a good chance of errors and misunderstandings creeping in, increasing the delay between lead and quote delivery.
Why would you want CPQ software?
CPQ software can provide a large number of benefits for a variety of different aspects of the sales business. For instance, in terms of configuration, CPQ software can lead to faster sales cycles which translate to the opportunity to win more deals and increased deal profitability overall. Pricing benefits can include the ability to avoid pricing errors and better visibility of pricing changes to existing products which can protect your margins and allow you to control excessive discounts offered by sales reps in hopes of sealing a deal. A CPQ will give you the control you need over your product and pricing system.
Is the investment into CPQ software worth it?
Research done by Gartner show that most sales reps spend less than half their time selling your products, with the rest of the time being devoted to travel and admin tasks such as generating quotes. Integrated CPQ solutions minimize the time spent on generating quotations, giving sales reps more time to sell, resulting in a 10% growth in sales. Also, a study by Ventana Research shows that only 14% of sales departments operate at peak efficiency and that while most companies agree that increasing sales is a key concern, they still use inefficient spreadsheets as their main way of managing sales. Investing in a CPQ is a great way to put yourself ahead of your competitors, increase revenues as well as broaden your client base.
When should you start implementing a CPQ software system?
If you’re a small business, you may feel that now is not the time to spend extra money on a solution you don’t need. Only consider CPQ software when you find the following:
Your homegrown systems are no longer adequate.
If you don’t have a large volume of products or orders, a spreadsheet can do quite well to maintain your product and pricing catalogue. However, spreadsheets don’t scale very well, and if you find that using spreadsheets is inhibiting your ability to up-sell or cross-sell, or if your staff are making more and more pricing errors, it may be time to consider getting a dedicated software solution.
Errors are costing you time and money.
If you tend to generate quotes manually, the chances of making errors is quite high, which can become devastating instead of merely irritating. If your staff spends more time re-quoting or re-doing incorrect orders due to incorrect quoting, a dedicated system may be for you.
Which CPQ system should you choose?
There are plenty of CPQ solutions on the market, and finding the right one for you can be intimidating. The first step is to consider what your needs are and how many people will be using the software. Do you want desktop-based or web-based software? Do you want to integrate the system with your existing CMS system? Most reputable developers offer free trials, so narrow down your options to a couple of systems that look good, and give them a try before settling for one.
CPQ software can help you streamline your sales process, leading to increased sales and a much better reputation with your existing and potential clients. If your business is growing, consider finding a system that suits your needs and integrate it into your CMS systems for best results.