I’m sure you’re hiring sales reps with the intention of increasing the amount of deals and growing your business. However, according to analysts, sales reps spend only 34% of their time selling, with the rest of their time spent on activities such as creating proposals and generating sales quotations, which require an average of 17-33 hours to complete. That is one of the primary reasons why an increasing number of businesses are considering a CPQ solution as a strategy to achieve the next level of sales performance.
Working with different customers,
we frequently hear the same challenge — delivering quotes to customers takes too long.
It is common to hear figures such as many days or even a week. Clearly, this is a significant disadvantage when compared to potential competitors who can provide a quote in hours, not days. According to one of the surveys, customers prefer to prioritize RFP participants who responded first. This definately illustrates customer expectations for a typical B2B organization to be able to provide the same experience customers receive in a B2C environment.
Major CPQ benefits
When customers searching for a CPQ solution ask to outline major CPQ benefits, I usually respond that there is one major benefit that is
Allow sales representatives spend more time with customers rather than handling paperwork.
This, I believe, is why we hire salespeople, and
we want to see sales reps in front of the customer, not in front of the spreadsheet.
Then there’s a second layer of benefits, which illustrates the first: You provide your sales team with a sales tool that significantly improves their performance, allowing them to spend more time with customers, improving customer experience, and generating more deals.
We’ve been told for years that “people buy from people.” Today, sales professionals have access to tools that provide them with a purchase propensity score for their existing customer base or intent databases that indicate which companies should be engaged. However, this is useless if sales reps do not have time to pick up the phone and call a customer or a prospect to have a conversation and learn about their needs.
So, let us break down our basic benefits that we discovered into more granular components to see the improvement we could bring to the sales team and see how it affects the organization.But first, let’s take a look at a typical sales quote journey without CPQ
One of the most significant challenges for sales representatives when preparing quotes is gathering data from multiple sources/systems and different stakeholders within the organization that are responsible for keeping this data up to date, such as product catalogues, price lists, and so on. This usually involves engineers dealing with manufacturing configurators, who should provide or validate the product configuration and, in some cases, calculate and provide pricing for complex product configurations.
After completing the product configuration and assuming that the most recent price list is in place, the next question is how to apply the correct price to the quote items. In some cases, a sales representative will look for a customer contract to check contract conditions and the discount level that should be applied, or in the case of a new customer, to define a discount level that will help them outperform the competition. In most cases, the discount exceeds the level that the sales representative is able to provide and must be approved by management, operations, finance, IT, or anyone else, depending on the complexity of the configuration, discount level, or margin.
Hopefully, our fellow sales rep has finally gotten his quote approved and can begin working on a proposal for a customer. He gets his most recent proposal template (hoping that branding, colors, and company name haven’t changed) and begins copying and adjusting information from various sources, such as documents required for RFP participant qualification, the quote itself (probably excel-based), and finally the product information (thank god if it is not in PDF format). Another option is to send a large number of attachments and allow the customer to browse through them.
In any case, the quote is now available and sent to the customer. Then there’s the issue of receiving customer feedback, which may require changes to the product configuration or a price review. And then the process starts over again.
Let’s take a look at how the CPQ handles the same scenario.
Because CPQ is integrated with both the front-end (CRM or Commerce) and the back-end (ERP), all product and pricing information is accessible directly from the quote configurator. Besides the beauty of a capable CPQ system, the manufacturing configurator is available for sales reps to use without the need for verification with manufacturing engineers. This gives the sales rep the ability to generate any complexity of products on their own.
Pricing is not only replicated from the ERP system, but it is also maintained in CPQ with pricing logic for specific territories, channels, customer segments, or even specific customer price conditions. This enables sales representatives to apply relevant pricing automatically and without any effort.
Once the price is applied and a non-standard discount is required, the sales rep will automatically see the margin health indicator, which can be applied to the entire quote, a specific product, or a component. If these special conditions differ from the predefined policies, the approval process is automatically triggered based on the approval workflow, which includes relevant stakeholders in the organization who must approve the quote. They receive notification of the approval request and can immediately view details and additional information, allowing them to approve it without delay.
When the deal is approved, sales representative generates a proposal based on a predefined template, which automatically pulls in all relevant customer, quote, and product-related information and generates a professional-looking document in PDF or Word format in a matter of minutes. When the proposal is complete, it can be sent to the customer. The ability of CPQ to negotiate the quote and provide feedback in real time allows sales reps to receive necessary updates based on customer requests, and once the quote is accepted, it can be signed using the integrated e-signature tool. The creation of a Sales Order in the ERP system is automatically triggered by the confirmation of a quote.
As seen in the second scenario, a
CPQ system enables sales representatives to create complex configurations, apply relevant pricing conditions, obtain approval, generate quote documents, and negotiate with customers with minimal effort.
And as the cherry on the pie, it is worth mentioning the most recent trend related to Intelligent Automation of the sales tasks like a complex customer request specification that must be analyzed and mapped to relevant products from the product catalogue. This task could be completed by AI, eliminating 85 percent of the manual labor required.
As the result, we see different small components that are affecting sales productivity increase and allowing to increase speed, efficiency, and transparency of quoting related processes but more importantly get your sales reps back to customer meetings – the place where they belong.