Smart Selling

Five Things We Learned about CPQ in 2015

  1. CPQ is part of a B2B-to-B2C sales evolution

Companies are changing the way they buy. B2B sales and marketing efforts are starting to look more and more like B2C sales and marketing efforts (more on this in #2). And companies that sell B2B are, right or wrong, benchmarking themselves against B2C counterparts. Configure-price-quote sits right in the middle of this strategic realignment.

According to Forrester:

“This means they need solutions with a best-in-class foundation of B2C features such as robust marketing, merchandising and experience management tools upon which unique B2B capabilities such as contract pricing, quotes pricing lists, eProcurement, product configuration and customization, guided selling, bulk order entry, dealer management and account, contract and budget management are then layered on top.”

Combine that with the other necessary functionality to keep up with this evolutionary shift in B2B sales and marketing, and it’s easy to see how the marriage between CPQ and CRM will grow even tighter (and more critical).

  1. Self-service consumer culture is a big reason behind the CPQ boom

Consumers as a whole want to cut out the middle man. If they don’t have to talk to someone, they’d rather not. This is increasingly true in B2B sales. As Jim Wilson points out, 56 percent of respondents to this survey that investigates the self-service economy prefer self-service solutions when researching a company, compared to 26 percent who would prefer to jump on a phone call.

Companies are recognizing this need, as customer self-service was listed as one of the top CRM priorities in Gartner’s “What’s Hot in CRM Applications in 2015” report.

While not a first-degree connection to CPQ in most cases, this makes a statement about how people buy and sell, and that is one of the big reasons for CPQ’s growing popularity. It empowers the current consumer culture to be able to buy and sell the way they want.

  1. CPQ has to be able to integrate with a mobile workplace

At this year’s Microsoft Dynamics® User Group Summit, one of the biggest topics was the “mobility” of CRM and CPQ, as Cory Hudepohl discusses:

“Just about everyone I or my colleagues spoke with asked about mobile. Businesses are rapidly changing the way they operate thanks to mobile and remote technology. If they are going to invest in something like CPQ, they want to know that it’s going to accommodate their business operations as they continue to evolve.”

That is only going to become more of the case going forward. CPQ is digital by nature, and thus has some inherent mobile capabilities; but that’s not the issue. What vendors have to answer is how does CPQ’s mobile functionality change when it’s tied to other systems? If it isn’t already, 100 percent feature access will be the expectation of CPQ users working on any device from any location.

  1. CPQ is just as powerful as a back-end solution

It’s easy to think of CPQ as just a front-end sales tool, and that is indeed how many people view it. But, as many businesses and manufacturers are finding out, it is also quite powerful as a back-end solution. It is plugging the gaps where process breaks down between sales, engineering and even delivery.

Enterprise Irregulars explains: “While mostly front-office salespeople use CPQ, the data they access has a strong back-office flavor. It includes the product catalogue, price lists and existing customer information that can drive things like cross-selling.”

And they are correct. But configure-price-quote is also being used to help manage inventory, free up back-office personnel from vetting product orders and facilitate streamlining of supply chain processes. If businesses hope to maximize the value of their systems beyond sales functionality, they’ll need to re-examine implementation processes to make sure they’re affecting both front- and back-end processes in a positive manner (which the vendor should be helping them do anyway).

  1. Configure-Price-Quote is here for the long haul

Analyst firms have been coming out with reports for the last how many years looking at the business impact of configure-price-quote. The numbers comparing Configure-price-quote users with non-users have generally made a very good business case for CPQ. Well, they published reports again this year (it’s kind of their thing) and the numbers still look good.  In 2015, we learned that this isn’t really anything “new,” rather the takeaway is that CPQ has staying power, and the continued consistency in metrics back that up.

In fact, the demand for CPQ is going to increase before it diminishes. But, to put numbers to the argument, check out this post from Aberdeen. A chart at the end compares year-to-year change of certain variables between CPQ users and all other users. Here’s the breakdown:

  • Reduction in contract/proposal generation rate: CPQ users +4.9%, others +1.9%
  • Customer renewal rate: CPQ users +3.9%, others -0.6%
  • Lead conversion rate: CPQ users +3.6%, others -0.5%

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