CPQ Repost from Cincom Corporate blog
CPQ software gives sales forces a decided advantage. CPQ is adept at isolating product capability with product requirements and available features. This is critical when your sales prospect starts asking what-if questions about your product.
On the pricing front, the same thing is true. Customers always want to know something about price. They will insist they just want a ballpark or they want an “idea” of how much this or that will be. CPQ provides you with the ability to create an exact, correct, error-proof quotation based on a specific set of inputs that are documented. The quotation is generated and stored for later review if necessary.
This is how relationships are built, how trust is established and how you set your company up as the preferred source when the vendor selection comes around. When you add pipeline dollars for prospects under this system, you will find you have a much better ratio of dollars quoted to business closed.
This differs from upselling, which as a goal, seeks to push buyers toward higher-priced versions of what they are looking at. It is also different from cross-selling in that we are not talking about moving the conversation to an entirely different product based on some correlation or coincidental interest.
This process increases quotation volume by making sure that all of the relevant questions are asked, all of the conditions for use are understood and that the solution recommended fully and completely addresses the need.
Talking the Talk
Sales is a numbers game, and dollars won is the only metric that counts. No one cares if you do everything perfectly according to your tactical plan. No one cares if you are elected chapter president of some relevant professional organization. No one cares if you made a thousand calls or ten calls last week. It’s really all about the numbers you generate—it’s the sales you close.
Once you are into a real discussion, the subject will become more finite and product-centric. So far, you have proven yourself and your company to be valuable, reliable sources of information. Don’t blow it now by overpromising product capability or price.
Equally important is to maximize the value of each transaction you are involved with. You have your prospect’s attention. You are successfully building your reputation in their eyes. Taking the path of least resistance may seem to increase your odds of closing a deal, but the reality is, by ignoring the opportunity to leverage your discussion with the prospect into a larger discussion involving a more complete or better solution will likely result in under-serving your prospect.
When you go to the well, bring back as much water as you can carry.
The Wrong Way
It has happened to all of us. We go to the car dealer with a budget number in mind, based on the price of the car we see online.
The sales rep goes through the car’s features you build out exactly what you had in mind and then the sales guy says he has to get the deal approved. That’s a bad sign.
A few minutes later, your suspicions are confirmed when you are asked to talk to the business manager. This guy is a bit less affable than the sales guy. He has a large stack of forms on his desk and a couple of display screens that you are not allowed to see.
After shaking hands, he starts on a whole new round of questions. He tells you that the undercoating process they use is unique to the industry and is specially formulated for the local climate. He remarks that your wedding band means you are married and before you know it, you’re signing a credit life insurance policy. These cars are well-made, but the extended warranty will give you stem-to-stern protection for a hundred thousand miles.
In the blink of an eye, your “deal” has disappeared and is now waddling around with roughly US $5,000 in add-on stuff. Your payment is over your budget by a hundred bucks, and what really irritates you is that you know you are still going to sign.
I have never understood why car dealers embrace this type of selling model. I think it’s some kind of perverted good-cop/bad-cop routine. All of the goodwill the sales rep has earned doing business with you is destroyed by the business manager trying to squeeze out a few more bucks.
A Better Way
What if the sales rep handled the whole deal except the final approval? What if the sales rep had questions that drove the answers appropriate to the situation?
Wouldn’t it be nice to arrive at the dealership and sit down with the rep who would ask you about what your expectations are for your new car? Perhaps you even share a top-end number.
In our perfect world, you might tell the rep you are interested in a certain SUV. The rep responds with questions about your driving and hauling requirements. Do you go off-road, do you regularly haul more than 1,000 pounds? Do you spend extended time near the seashore?
These responses would drive recommended options such as undercoating for the seashore months, a heavy-duty suspension for the hauling performance and an appropriate-size engine. Your annual mileage estimate helps you decide whether or not you need an extended warranty.
At the end of the process, a number is produced and depending on that number, you and the rep can decide whether or not certain options are worth the extra money. You can add and remove features and make alternate option selections until you work toward the perfect car and the perfect deal.
When you build your quotations and proposals in this fashion, you are maximizing the dollar value of each quote. Your pipeline will be built around real value proposed and under consideration by your prospect. Instead of tracking a bunch of percentage-driven, close-rate, ratio-produced numbers, you are tracking actual deals with actual dollars in play.
It’s really all a matter of how you present the choices. Are you trying to blow them by your buyer at the last minute, or do you work the questions into your normal conversation with the buyer?
This maximizes the value of the sale. For the customer, it maximizes the value delivered. For your pipeline, it means alignment between value offered, considered and prices quoted.