Many Configure, Price, and Quote (CPQ) projects that start with good intentions for sales somehow change into ‘an administration efficiency project’ along the way. While that’s a great benefit of implementing CPQ, let’s keep looking at the way CPQ can drive sales opportunities.
CPQ is often the salesperson's key portal into the world of their deals. Having the ability to present the right prompts and information to a salesperson at just the right moment opens up amazing opportunities for decision making.
Thinking of this I was reminded of Bill Gates' speech at Comdex in 1995 (now I really am showing my age!) He introduced the concept of “Information at your fingertips.” This was a powerful message. As I moved into a career in sales, I kept coming back to the disconnect between Gates’ vision and the reality of a laptop, which was big and heavy, had a slow, beeping modem with a wire plugged into the wall, and disconnected software. My conclusion was that Bill's fingers must have been a lot different than mine if his fingertips could reach all the information I would need to make a good decision for my customer.
Fast-forward a mere 22 years and it really does feel like the vision has come true for salespeople equipped with cloud-based and mobile enabled CPQ systems.
There are many examples of how CPQ can enable smart decision making for a salesperson. One is the ability to recommend cross-sell and upsell opportunities to the sales representative as they’re building up a deal.
Product marketing departments can easily specify configuration rules that show recommendations for extra products and services that complement the main product a salesperson adds into their CPQ quote. These are often higher margin items that really unlock the potential profit in a deal.
Recommendations can be softer too. For example, highlighting price-breaks for higher quantities ordered has just enough information to drop into a sales conversation to prompt further discussion. Being in the customer's interest reinforces your reputation as a trusted advisor.
Once products or services have been configured in a deal, it's very easy for CPQ to enable the right pricing decisions to be made by a salesperson. Smart deal management tools can enable historical pricing trend information to be shown to a salesperson just as they are deciding at what price to bid. Win/loss pricing data from the past can be brought into view, represented graphically, or, giving a win probability figure that can help the salesperson decide whether to push harder for a higher price or to discount to win.
It's even possible to link sales commission systems into CPQ to help a salesperson maximize their own earnings opportunities. If your compensation plans are well designed and they drive the correct behaviors, then this can be an amazing multiplier on performance, resulting in happier salespeople and happier management.
The key to any successful CPQ implementation of these smart decision making tools is to have good data and a clear understanding of what decisions you want your salesperson to make. Companies like Amazon in the B2C space understand this perfectly. If you look at the sophistication of their recommendation engines ('People who bought this also bought….', 'What did other people buy after viewing this item….' etc.), the mechanisms are the same as those that can be implemented for B2B in CPQ.
If you know your customers well, understand the logic in the buying decisions, and have the data to back it up, CPQ can help you maximize the revenue, profit and chance of success in any deal. It will finally put the critical information into the fingertips of your sales teams.
* Originally published on walpolepartnership.com.