This article is a guest post written by Aleksandr Peterson. Aleksandr is a technology analyst at TechnologyAdvice. He covers topics around marketing automation solutions, best CRM software, project management, human resources, and other emerging business technology.
Enhancing Your Sales Process with Integrated CPQ
Sales teams are constantly trying to increase their win rates and shorten the sales cycle. To that end, most have adopted CRM software. A CRM automates lead management and helps you identify new opportunities with existing relationships. These are all necessary tools for business growth.
But if you know anything about CRM, you know it’s meant to serve as a foundation, not as an entire infrastructure. There are dozens of other tools and applications that a business needs to work efficiently. One of the most commonly neglected is CPQ (configure-price-quote) software.
Despite being an integral part of the sales process, many teams are still configuring products and approving quotes through a maze of spreadsheets, emails, and documents.
These manual methods may work at a small scale, but as your business grows, you’ll begin to see their limitations: too much back-and-forth between sales and other departments (manufacturing, fulfillment), bloated sales cycles, delayed approvals, and data entry mistakes. Meanwhile, you’ll lose business to competitors with more efficient CPQ workflows.
The Need for a Company-Wide CPQ Solution
Deploying a CPQ solution across your entire company removes impedance from the CPQ process and ensures all sales reps are following the same workflow. According to a recent study by the Aberdeen Group, “best-in-class” firms convert 30 percent more quotes into closed deals, and CPQ deployments are correlated with 45 percent higher proficiency in responding to RFPs (requests for proposal).
It’s no wonder that Gartner called CPQ one of the “highest CRM application priorities” for sales teams last year, second only to lead management.
If you’re unfamiliar with CPQ solutions, they basically work like this: an automated wizard walks the sales rep through product configuration (based on customer interests, needs), triggers an approval request, and releases a quote to the potential customer. If your rep wins the deal, many CPQ tools will automatically create a new customer record in your CRM.
CPQ solutions are especially pertinent for organizations that sell complex, customizable products, such as software, high tech devices, industrial equipment, or multi-product systems.
The Importance of CRM Integration
If you’re going to use a CPQ tool to streamline sales, it makes sense for that tool to integrate with the system your sales team already uses: CRM. Integrated CPQ/CRM lets users manage the whole process in one place, without needing to open a separate program and perform cross references or duplicate data entry. In most cases, a CPQ app will function as a “tab” in your CRM, similar to the way you manage forecasting or inventory.
Here are some common features to look for in a CPQ add-on:
- Proposal and document managementd
- Guided sales and product selection
- Dynamic pricing
- Mobile support
- Reporting/analytics (analyze feature popularity, sales activity, promotion effectiveness, margin performance right in your CRM) (“deal intelligence”)
There are a number of strategic benefits that come from adding CPQ to your CRM. If you implement a new solution, you can expect to see the biggest return in these areas:
Respond Quicker to RFPs
In many cases, sales effectiveness is about being quick on your feet. After identifying a customer need, you should be able to quickly offer a solution that matches their specifications. About 75 percent of B2B companies say a knowledgeable rep and an appropriate time frame are critical to a successful follow-up.
With direct access to CPQ tools, your sales team can easily pull customer data and requirements into a product configuration and ship an accurate quote to the customer as soon as possible. This is especially true with mobile CPQ solutions, which help your reps quote and sell away from the office.
Improve Your Win Rate and Margins
Pulling all of your product and customer data into an automated system greatly reduces the effort required to adjust pricing or contract terms. That means your sales reps can sell more competently, and your potential customers will be more likely to find a configuration that matches their needs and budget. An automated system also helps reduce human error and prevent unexpected surprises in the deal closing stage. Ultimately, that means you’ll sell more products and close higher-value deals.
Reduced Selling Costs
Integrated CPQ eliminates the need for circuitous conversations between manufacturing, fulfillment, and sales. Instead of going back and forth between various departments, sales reps can check pricing and inventory, place a new order, and track fulfillment without leaving your CRM. The time and resources saved help reduce overhead costs and maximize profits.
Increase Customer Satisfaction
Perhaps most importantly, a seamless CPQ process improves the customer experience. Instead of waiting around for a quote that’s inaccurate, incomplete, or doesn’t quite match their requirements, your leads can get the information they need from a single interaction. Research has shown, time and again, that customers will pay more for a positive experience.
If you sell custom products and plan to grow your business, integrated CPQ is a must-have. But it’s important to keep in mind that CPQ solutions, though incredibly valuable, can be challenging to set up. Unlike some of the simpler CRM apps on the market, the implementation process is typically more involved than “plug and play.” You’ll need to load all of your product and pricing variables and connect the app with relevant back-end systems. To avoid costly mistakes, try to get everything right (and test it) before the app goes live.