CPQ Enables Faster Sales Onboarding and Quicker Organizational Growth
Your first day on a new job! Is there a better feeling?
If you switched from a lousy job, the world just looks better. If you were hired out of unemployment, a load is off, and the future is bright once again.
It’s just a great day! You haven’t screwed anything up yet, and everyone still likes you. It will never get any better than day one on a new job!
In the old days, you knew you were on an extended honeymoon. You looked forward to months of training. Perhaps you would rotate through several positions just to get the lay of the land. I knew a guy who was hired by IBM back in the mid-1970s. He was bundled off to Endicott, New York for a year of IBM school with several return trips scheduled during year two.
Lack of Product Knowledge Can Impede New Sales Reps
Employers don’t work that way anymore. They can’t afford to spend two years educating employees that, according to the Bureau of Labor Statistics, will likely stay for less than four years.1 You come onboard with the basic tools in your possession; they will teach you the unique aspects of selling their products; and technology will fill in the blanks.
Frankly, prospective sales reps aren’t interested in long training cycles either. Being able to promise the new rep quicker access to the revenue- and income-generating aspects of their job is a real advantage when you are trying to attract the best sales talent available.
The fact of the matter is slow onboarding processes aren’t conducive to growth, and that should be the goal of your sales organization. As you expand to new regions and verticals, you need more sales staff, and there simply isn’t time to bring new blood up to the level of a seasoned veteran within your organization, on top of the aforementioned issues.
The expectation today is to be instantly effective on not just one product but many products! Most sales organizations carry larger portfolios with more product variability aimed at more diverse markets. Customers still demand sales reps with specialist capabilities, but the economics are requiring companies to field generalist sales reps.
Entrenched sales forces trying to make this transition are subject to high turnover. A 2013 study published by Bain & Company shows that B2B companies undertaking single-product to multi-product portfolios are experiencing turnover rates as high as 60% over less than three years.2
The fact is, whether you are training new hires or re-training your existing sales force, product knowledge is the constraining factor in transforming sales talent into effective selling professionals.
Guided Selling and CPQ: A Smart Combination
So, how do we load all of that product knowledge into their collective brains? The short answer is they just need to know how to read.
CPQ (configure-price-quote) solutions provide a repository for all product data and pricing. Guided selling prompts within the interview functions of the CPQ solution guide the sales rep and the customer through the process of evaluating the customer’s needs and matching those to assorted selection choices.
Complex products typically require a decision tree of choices, options, materials used and features selected. These are presented as a menu-driven script to be followed as the needs and requirements are discussed between the seller and buyer.
If the sales rep can read the script and the customer can answer the questions, the job will get done effectively. Product knowledge is built into the system and does not rely on the rep’s memory.
The knowledge of employees in the company—the ones with product and application knowledge—create the scripts. The scripts eliminate the misapplication of product to inappropriate use and ensure that the product matches the customer’s needs and specifications.
You don’t have to haul the new hires into a room for weeks of product familiarization, and you don’t have to pull in your entire field sales force for an all-expenses-paid week in a hotel learning about new products, pricing models or new features.
Let’s talk some more about the pricing functionality. Pricing models can be as complex as necessary to align price with value delivered. The pricing calculations can accommodate different types of customers such as GSA or national-account, discount-eligible customers.
Volume price breaks and other scaling metrics can be built into the pricing model and automatically calculated as quantities are entered. The calculations and the invocation of the specific applicable discount calculations are automated based on quantities and customer classifications associated with that opportunity.
Reps will not need to learn obscure formulas or consult complicated charts or other tools to correctly apply pricing models; CPQ does the learning and the quoting.
People look for flexibility in pricing. Valid pricing tries to match price with value delivered. The problem with complex pricing is that it is frequently abused to justify a discount that really has not been earned.
You don’t have to teach the complex pricing to new hires of veteran sales folks; you build it into the interview questions. The customer’s answers drive the discounts applied transparently.
Productive New Hires and Existing Sales Pros
It bears repeating that this type of updatable intelligent CPQ application serves the existing reps as well. New pricing, new products and modified or expanded product lines are all accommodated by the updatable CPQ functionality. As new sales forecasts drive new pricing plans and new product development drives improved products and new options, CPQ reflects these changes. The sales force does not have to spend a week at corporate every year learning the ropes for the modified product line.
Updates can be summarized in short memos, examples are provided and CPQ is updated to reflect the change. This means more time in the field, less time learning, more sales and a more efficient, effective sales force.
People who sell products for a living do not like to spend time learning complicated product lines, pricing structures and other esoteric information related to the job. For your new hires, CPQ allows you to promise a fast path to sales revenue production. For your valuable sales veterans, CPQ promises them minimal time out of the field and maximum opportunity to generate revenue.
CPQ Provides Competitive Advantages
In the highly competitive marketplace of attracting the best sales personnel, CPQ provides you with a distinct advantage over competing companies and faster access to productive selling opportunities. The best sales reps don’t care about plush offices or winning steak knives; they want an opportunity to move your product and generate commission-paying revenue. And your ability to get them to that level of productivity efficiently and effectively is going to allow your organization to grow and succeed as it sets its sights on new opportunities.