Creating a seamless flow of work, especially when you are selling a service or a product, is all about organizing various elements that then work in tandem. This is not an easy task. But it is one that can be accomplished with the Salesforce CPQ sales tool.
What is Salesforce CPQ?
CPQ is an abbreviation for configure, price, quote. Its primary job is to generate quotes for any orders placed – quickly and accurately. CPQ tools usually work alongside CRM platforms and enterprise resource planning (ERP) programs, as well as other business technology-related tools. This assures a smooth integration of data. Quotations are generated with CPQ tools based on pre-set rules. This ensures that information related to quantity, discounts where applicable, any customization, optional features to be included, revenue forms, any incompatibility, is automatically taken into consideration. It reduces the margin of error in the delivery of a quote.
Sales representatives spend almost 34 per cent of their time working on proposals, quotes, and the correspondence needed to get approvals. This cuts into their actual selling time. With CPQ software in place, user feedback has shown that it can:
- Speed up the quote-generating process 10 times over
- Reduce approval time by as much as 95%
- Move quote to cash as much as two times faster
- Ramp up new representatives ramp to around 30% faster
5 Questions Why Your Business Needs Salesforce CPQ
With this understanding of what CPQ is, here is a detailed look at why your business needs Salesforce CPQ and how it can benefit from it through these five scenarios:
If your company is looking at expanding and customizing its product portfolio, your representatives will have to work with dynamic price structures. What they will need is a user-friendly catalog that provides them dynamic flexibility to bundle together products, features, and pricing when they work on customizing. This is quite complex if done manually and sales representatives can easily lose track of what they are doing, leading to costly errors. Balancing multi-layered discount offers, product bundles, renewal of subscriptions, etc., are all based on complex formulae, which can be difficult for an individual to do. The result can often be error-filled proposals and contracts – all of which lead to an extended sales cycle. It also results in embarrassing situations with your client. At the very least!
How Salesforce CPQ helps: With the Salesforce CPQ tool your sales representatives will be able to provide complex pricing and multiple choices in product-feature bundling easily and confidently. The system eliminates any manual calculations and automatically updates pricing lists based on product inputs and volume discounts. Pre-approved pricing levels and those that need approval can be pre-set, reducing the time taken for decision-making. Additionally, the Salesforce CPQ system ensures that any change in pricing is automatically updated with the legal and finance teams, for review and approval, if it is required at any stage.
Automating the system of quotes and prices completely removes the element of human error. This reduces the number of iterations that go back and forth between a potential customer and your sales representative. Salesforce CPQ also has an advanced rules engine that does not allow customers to create orders that may be outside the purview of the organization’s abilities. This brings down the chances of non-fulfillment of orders. Research by the International Data Corporation and Aberdeen Group has found that the use of CPQ tools brings down the number of quotation revisions by 13 per cent.
Amazon has attributed up to 36 per cent of its revenue to cross-selling initiatives.
A common problem for most organizations that are adding new products to their portfolio is that their sales representatives are often not in the loop. This is especially so when there is no guided selling system in place. Representatives find it extremely difficult to track newly catalogued products and often lose out on opportunities for upselling or cross-selling. A guided selling system that is manual can be implemented only by seasoned sales representatives who have been in your system for a long time. Newer recruits can find it quite difficult to do this manually. This can lose your company many sale closures and renewals of contracts. It can also slow down the quote to cash movement and result in quotation delays or errors related to complex bundling options.
How Salesforce CPQ can help: Guided up-sell for Salesforce products helps representatives instantly connect to a large portfolio of products that have been sorted based on value. All new products are instantly updated and the tool offers suggestions to representatives for upselling when they are quoting, and during the renewal process. Representatives are shown multiple suggestions where products can be matched with associated services or other products. Since the process is automated, it plays a huge role in renewals. Quotations are drawn up well in time, speeding up the pricing process, and as a result closures.
In a business cycle, approvals play a huge role in expediting the process. However, it is also a stage that is riddled with multiple challenges because of which the quoting process is often delayed. This can impact any sales strategy that is set. When approvals are multi-level, it can get rejected at one stage requiring an iteration and a restart of the process. Manual delegation is not an option in such cases as it further slows the process. Such delays can leave clients in limbo, or worse still, disappointed. Sales representatives often get caught in iteration cycles and lose out on good deals.
How Salesforce CPQ can help: Salesforce CPQ’s framework is created with multiple functionalities that automate the sales cycle. The tool works not just for sales representatives, but everyone who is part of the sales cycle – team managers, finance department, legal department, inventory, and more. The tool helps keep everyone on the same page. If a certain set of choices made on the sales side require approvals from either finance, legal, the managers, or even a combination of them all, then the system automatically alerts them and they get involved. These approvals can then be managed to work out pricing.
For salespeople specifically, CPQ systems allow you to create a combination of bundles and pricing automatically rather than manually, which can be time-consuming. A subject matter expert (SME) can set down the rules for the CPQ system on these bundles and the system does the work, offering a wide range of options for consumers. Additionally, Salesforce CPQ system can be used to determine demand and product trends that can also help the R&D department. Your product and organization, therefore, become much more solution-oriented and customer-centric.
Without a software solution, the quoting process can be a difficult one for your team. Because of the complexities involved, it can get tough for them to gauge the exact needs of a sales inquiry. Based on the information they have, they may cobble together a few earlier quotes to create a new one, but this may not be effective. To support their quoting abilities, sales representatives often take to data entry – tasks that are considered administrative. Managing several systems and client relationships manually can take up a lot of their time. All this combines to bring down their efficiency in functioning. With CPQ software, aspects of creating quotes, ascertaining prices, and managing proposals can be automated, making things easier.
How Salesforce can help: Employees of an organization end up using as many as four systems of working to access the information they need to get the job done. Where contracts are involved, almost 75 per cent of companies don’t have the process automated. However, sales teams with high-performance ratings have been found to use three times more sales technology than those who are not. The importance of technology to enhance team efficiency therefore cannot be undermined.
Salesforce CPQ gives sales teams the flexibility they need in the selling process, no matter what the size of their business. CPQ tools scale up or down based on the needs of the team and work on the framework of your existing business protocols. Automation of the process creates the necessary audit trails, creates reports needed by finance, accounts, legal, and the tax department. In cases where the business is international, Salesforce CPQ also manages currency exchange rates and applicable taxes. From the customer perspective – the tool will help manage aspects such as credit card dealings, payment installments, and bounced checks. The automation process enables product offerings to be sent across multiple channels. All this gives the sales representative immense flexibility to do what he is hired for – sell more, sell better.
ny manual intervention. The sales representative can use these immediately with his client, who in turn will appreciate the efficiency and the personal touch.
Since the Salesforce CPQ has all the information needed to create quotations, customizing for bulk orders, their pricing and applicable discounts also become easier. The ease of going through this process can make a world of difference to each sales representative’s performance. Quickly coming through on such orders ensures that your company has a reputation for knowing their job well and executing it. It keeps the sales pipeline moving constantly.
The good thing about the Salesforce CPQ program is that easily integrates into your ERP systems. This further streamlines things. With CPQ and ERP integrated, a bridge develops between the sales and operations teams and this is an added benefit to the company. Sales representatives will observe the sales process, inventory can manage deliveries, and operations will look into the pipeline and line up newer deals to work out, keeping the materials and manufacturing departments in the loop.
Salesforce CPQ provides organizations, irrespective of size, a massive improvement in functionality and the potential to enjoy a large return on investments (ROIs). The adoption of CPQ software is increasingly on the plan of action of companies across the globe. With more companies understanding the benefits of the system, especially when integrated into ERP, the pros of investing in Salesforce CPQ are many.