Top 5 Challenges CFOs Face When Implementing CPQ
The automation of business operations currently holds a leading position in the development priorities of many firms. Automation has developed new forms and capabilities since the initial CRM and ERP systems, including the popular Salesforce platform.
The following trends stand out among the vast range of those, currently dominating business automation:
- Use of chatbots and virtual assistants
- Compilation and analysis of customer behavioral data
- Self-service options and customer virtual desks
- Automated workflows for sales reps (approval templates, revenue reports, customers)
Numerous apps created for Salesforce CRM already have self-service and automated workflows embedded. One of the most advanced solutions for automating various business processes, accelerating the sales cycle velocity, and ultimately raising a company's revenue is Configure-Price-Quote (CPQ) solutions.
The Emergence of CPQ
An old-school quoting process in a traditional sales flow was as follows:
- Determine the best products and the required configurations
- Refer to pricing documentation or static systems for the basic price
- Track down eligible discounts and apply them manually
- Wait for approval if a large discount is requested
- Create the final quote document that will be delivered to your customer
In a highly competitive environment, sales representatives deal with complex products and services, create quotes, and interact with customers. Excel and other data sales tools are no longer effective to provide deal velocity without errors and recalculations.
The key challenge has always been to improve the automation, predictability, and efficiency of the quoting process for both sales representatives and clients. It has triggered different vendors all around the globe to develop CPQ solutions. At the very least, CPQ software implementation reduces the use of paperwork and documentation. Sales reps benefit from having price books available at hand and save time by reducing manual calculations and routine operations.
But CPQ is more than that!
Implemented CPQ solutions provide such out-of-the box capabilities as product bundles configurator, guided selling, automated pricing rules, and interactive web quotes to help streamline sales flows.
According to recent Gartner research, the CPQ software market size grew 15.5% in 2019 to an estimated 1.42 billion USD. The configure price and quote (CPQ) software market size is anticipated to grow at a CAGR of over 14% during the forecast period.
Don't forget to check out: Managing Product Bundles Effectively with Salesforce CPQ
CFOs meet CPQ
How can a company’s decision-maker identify internal signals indicating that business flows need to be tuned up and automated?
We will outline the biggest challenges every company faces when considering CPQ implementation. These observations are based on the interviews with CFOs that the Sculptor CPQ team conducted through 2021-2022 years. All the represented companies used Salesforce CRM to run their businesses, with no CPQ solution. These are the industries covered by this questionnaire:
- Logistics and Shipping Services
- Financial Consulting
- Marketing Agencies
- Software Services
- Retail Business
Top 5 questions the CFOs refer to the Sculptor’s team about CPQ implementation:
- How to evaluate whether a company needs CPQ in the current business life cycle?
- Is implementing CPQ a reasonable investment?
- How many resources are required to deploy CPQ and set up a relevant business process?
- How long will it take for sales revenue to increase as a result of CPQ-based sales flows?
- How will CPQ implementation enhance communications with clients and increase
How to evaluate whether a company needs CPQ in the current Business Life Cycle?
Some companies do quite well without CPQ. Sometimes, their business doesn’t provide a broad range of products or services to customers, or there is a sufficient number of sales reps successfully managing the flow of orders using standard tools (Excel) for calculations and generating commercial offers (quotes).
The primary indicators for a CFO to consider the feasibility of implementing CPQ are:
The speed of attracting new leads has slowed down. This may indicate that sellers spend much of their time working on accurate quotes, approving discounts, and discussing pricing policies with management, leaving them with less time to grow relationships with new customers.
The product (service) range is constantly expanding (changing) or includes a large number of independently configurable features, and subproducts options with individual attributes (price, block pricing, quantity discounts).
Your pricing policy has become increasingly complex, and sales reps have already worked out all the pricing rules in Excel to calculate discounts for various customer groups. While keeping the option for sales representatives to manually set up prices or discounts in some circumstances, you wish to automate the application of pricing rules
Although the workload for sales reps has increased, you don't want to hire more people. The average time to quote is growing concurrently.
Your business has expanded into new markets with strong competition. As a consequence, multicurrency management, frequently changing pricing policies, and quote approval management for VIP clients have become more time-consuming, preventing sales reps from closing deals quickly.
Check out another amazing blog by Sculptor CPQ here: How to Improve Revenue with CPQ Software in 2023? | Salesforce CPQ
Is Implementing CPQ a Reasonable Investment?
Obviously, business owners want to ensure they receive a return on their investment. CPQ vendors vary in their pricing models and subscription plans.
The ''try before you buy'' formula is the best way to determine whether a CPQ solution is worth purchasing. On the AppExchange platform, for example, Sculptor CPQ offers a great opportunity: you can install a free version of CPQ in your production with no expiration date (but with some minor limitations).
Alternatively, you can try a Test Drive and jump into the CPQ environment to play with product and bundle configuration, and pricing rules in just a few clicks.
Regarding return on investment, you may determine how many man-hours will be saved annually by comparing the amount of time a sales representative would need to generate a typical quote using outdated techniques and software (such as Excel) with the time it would take to get a quote with CPQ guidance.
How many Resources are required to Deploy CPQ and Set Up Relevant Business Processes?
It depends on a specific CPQ solution and your current business needs. For instance, a typical Sculptor CPQ installation takes half an hour, while its customization for customers’ needs may take 2-3 weeks. No integrator is needed, a company’s Salesforce administrator can easily set up CPQ for sales reps.
At the same time, the majority of CPQ solutions will require 3-6 months and a certified CPQ specialist or even a third-party Salesforce consulting firm to implement CPQ and tailor everything to the business needs.
How long will it take for Sales Revenue to increase as a result of CPQ-based Sales Flows?
Our research provides helpful indicators for CFOs to assess when a company is receiving a return on investment. We can share these common benefits of Sculptor CPQ that companies see a year after its implementation:
CFOs admitted that sales reps generated more leads and accurate quotes several months after Sculptor implementation.
How will CPQ Implementation help to improve Interaction with Clients and Improve their Customer Success Experience?
Customers have become more sophisticated and demanding. They tend to stay with companies that can provide self-service capabilities with a user-friendly interface.
In terms of CPQ, self-service capabilities are represented by the opportunity to edit online a proposed quote. Sculptor CPQ, for instance, has an integrated interactive web quote functionality. That means that a customer can receive a published secure link via Salesforce notification, a messenger or email, edit it online, add missing products and services, approve the quote, and send it back to a sales rep. In this case, we achieve a flawless and adaptable collaboration between a company and its client.
Higher productivity, sales flow acceleration, and automation of routine operations are the key benefits a company gets by implementing CPQ in its business CRM environment.
Originally published at Sculptor.Cloud.com