CPQ: The Often-Overlooked Necessity to a CRM System
CPQ (Configure-Price-Quote) software extends CRM (customer relationship management) systems and enables visibility to all customer interactions and provides accurate data for enhancing customers’ experiences.
As businesses, we know more about our customers today than we did five years ago. Yet, we still need to improve our customer knowledge to continue to retain, engage and acquire them in large numbers.
Companies not only need to have accurate account and contact information and customer-transaction data, they also need to go a step further and gain more visibility into their customer buying habits. We need to know, what types of products are they buying? How are they buying? What vertical markets are they buying in? When are they buying? What are they willing to pay for a product? This is only a snapshot of the types of information companies may need to improve and support the overall customer experience.
CRM Systems Provide Visibility to Customer Interactions
To help drive the improvement of the customer experience, companies implement Customer Relationship Management (CRM) strategies to manage and gain visibility to all customer interactions. They frequently use CRM software solutions to facilitate and capture these interactions in a systematic, automated, unified approach.
CRM is One Piece of the Puzzle
But CRM software is only a piece of the puzzle. What else should be captured and currently isn’t? Extensive product-knowledge data.
Most standard CRM systems include, at best, very elementary product-quote and product-order functionality. I believe this is a major gap in CRM systems today, and I know from my experience this gap is sometimes taken lightly and skirted over by businesses, vendors and consultants alike.
The Value of CPQ
How can we bridge the gap and begin to capture this much needed data to gain extensive product information? You do this by integrating a CPQ (Configure-Price-Quote) solution with your CRM. Think of it as blending the best of CRM and CPQ functionalities to produce a robust customer-to-order solution. Commonly, when companies think of CPQ, they think of standardizing the selling process and configuring a product or a service through guided-selling methods or engineered-to-order configuration selections. Although this is true, they do so much more.
The value of CPQ is often hidden and not thought about until:
- you can’t produce a product that has been quoted,
- your customer isn’t happy with the service you have provided or
- your company can’t produce the kind of reports they need to make key business decisions.
Customer Interactions Rely on Data Accuracy
A pet peeve of mine is the vicious cycle of creating or modifying reports because they aren’t producing the type of information you were expecting and needing to make more informed business decisions. Instead of realizing there is a data problem, you think it is a report criteria problem. It goes back to the saying “garbage in garbage out.” If you have a CPQ solution integrated to your CRM, you may already experience the hidden value that such an offering presents, but if you haven’t, the light bulb just went off. CPQ bridges the gap between customer-account and contact information and your customer’s buying cycle.
Every interaction with your customer relies on the accuracy of your data. With CPQs, you aren’t allowed to enter inaccurate data. You are guided to the right product or you are systematically constrained by selection rules to product selections.
Evaluating a CPQ System
When it comes to the configure-price-quote process, ask yourself: How will this help you manage your customers? When evaluating your next CPQ software solution, here are some features you might consider to improve your customers’ overall experiences.
- Provides 360-degree-view, meaningful dashboards
- Offers personalized interactions
- Improves analytics
- Produces correct product the first time from quote-to-order and manufacture to ship
- Reduces errors and redundancies
- Improves customer interaction
- Reduces internal and overhead costs
Products and Services
- Offers customer-preferred products
- Shows products being won and lost
- Offers lower-cost product alternatives when necessary
- Supports product marketing campaigns
- Shows best customers and products
- Supports standardized pricing
- Supports target-market pricing
- Enables you to react proactively to market changes
- Provides accurate and easy-to-understand documentation
- Reduces phone calls to fix pricing issues, shipping errors and lead times
- Improves relationships between buyers and sellers
- Improves data integrity, which is the root of all accurate information
- Provides accurate information to guide accurate decision-making
Combined with your CRM strategies and system, a configure, price, quote software system should help you build a value-based relationship with your customer since they don’t have to worry that something will change from quote-to-order to shipment. What would improving your customer relationships mean to your company?
Shelley Meiners contributed to this article.
Source: Smart Selling