As disruptive enterprise tech products have increased in complexity, configure price quote (CPQ) software has become a mainstay of CRM integrations.
One of the biggest benefits of adopting CPQ software is that sales can use product complexity as a strategic advantage, rather than a roadblock. This leaves product teams free to enhance features that serve customers better, without sales processes sustaining too much operational friction.
The result is lower times to quote and a larger suite of features designed to solve customer issues. Here's how modern enterprise teams are using CPQ software to supercharge their quoting and circumvent operational complications in the process.
Customizing configuration and removing pricing errors
Before the widespread adoption of CPQ, salespeople had only one way of accounting for product complexity when preparing price quotes: manual calculations using convoluted formulas.
For instance, a sales rep might work through a checklist of features and match them to client needs, with each feature's price listed separately. Once done, they would apply a bundle discount to the package, multiply it by the number of seats or licenses the prospect needs, and then package it all as a proposal. Often, these quotes would need review by sales managers before reps could submit them to prospects.
If a prospect requested changes or asked questions about changing the scope of each feature, the salesperson had no way of adjusting the quote on the fly, increasing the likelihood of lost opportunities. CPQ has dramatically changed this picture.
Sales teams can now build quotes from any starting point and option instead of following a prescribed path. By incorporating dynamically synced data points into automated formulas, the software crunches numbers behind the scenes and ensures optimal quotes at all times. Salespeople can present quotes with relevant features and account for substitutions immediately, instead of having to circle back later with an updated quote.
CPQ is also minimizing errors in the quoting process since the software excludes irrelevant features, depending on how a company has set up its product configuration. For instance, a rep might include the full scope of a function in their quote and then charge accordingly if the client needs just a fraction of it.
CPQ software allows sales teams to pick and choose individual product features on a granular basis, leading to accurate and customer-relevant quotes. It also simplifies discounting, removing any complexity in the process. In turn, this helps organizations standardize their sales quoting process, which also helps with revenue projections and quota fill estimations.
Reduce time to quote
Reconciling quote data with contract terms in Salesforce (or other CRMs) and further matching that to RFP requests used to consume significant time. CPQ software automatically matches data and helps sales teams maintain consistent branding throughout, reducing response times.
CPQ automation features include highly customizable templates that sales teams can use to quickly build and modify quotes, leading to shorter sales cycles. When salespeople don't have to spend hours modifying and building quotes, sales cycles get faster, and they're able to prospect, nurture and close more sales at once.
Automation is the key here. Market-leading CPQ software offers salespeople product configuration suggestions based on previous sales data. These suggestions open opportunities for cross and upselling, both key elements in increasing subscription revenue. Salespeople can easily substitute options and modify quotes accordingly.
Automation of this kind reduces the time to quote but also shortens ramp-up times associated with onboarding new sales team members. Typically, sales hires spend months ramping up before they hit full capacity. CPQ software doesn't eliminate ramp-up times altogether, but it does augment guided selling programs.
As a result, new hires spend less time manually configuring quotes and more time learning how to best communicate the value of the product. This reduces ramp-up time, since new hires get up to speed on important matters quickly and can rely on software to generate accurate quotes.
Incorporate complex pricing models
Enterprise software is complex, and given changing business environments, their pricing is too. Large companies have long toyed with value-based pricing as a means of extracting more revenue from customers. However, this model is challenging to implement when combined with complex products.
The primary reason is, the combinations of features change value dramatically and leave salespeople with too many variables to consider. When calculated manually, value-based pricing is virtually impossible to execute with a complex product. CPQ software's automation and integration abilities are changing this picture, with more enterprises adopting value-based approaches.
Instead of teams importing pricing data into Excel to compute configuration prices, CPQ software now presents salespeople with pricing options automatically with a few clicks. These software integrate with different deal sources to account for variables when constructing quotes, giving salespeople the freedom to adopt different pricing models based on customer needs.
Value-based pricing isn't the only model CPQ software accounts for. Companies are now modeling different strategies, such as cost-plus and price optimization depending on customer size, interest, and resources. The result is a dynamic pricing strategy that reflects customer needs at all times, increasing the odds of a successful close.
Over time, CPQ also offers sales directors insights into pricing journeys, allowing them to further optimize their quoting process and revenue generation.
CPQ has changed enterprise sales
Enterprise sales was always complex, but CPQ software is offering companies the ability to account for complexity while delivering customers a great quoting experience. Enterprise software is unlikely to get simpler any time soon, which means that CPQ software is becoming more essential than ever.
