Effective digital transformation can be a game-changer. When Nike, a world leader in athletic apparel, began falling behind their competition in the digital realm, they committed to investing heavily in everything from new apps and e-commerce options to digital marketing campaigns.
In 2017, the company’s leadership promised to double their innovation, speed-to-market and direct connection points to customers, within a decade. In the end, they hit their targets much sooner than that.
And this is just one example. Whether it’s Netflix beating out Blockbuster for video on demand, Apple reinventing the way software is sold via their App Store, or Spotify changing how we buy and consume music, embracing the latest digital tools is a necessary path to success.
And digitization initiatives don’t need to shake up your entire industry to have a dramatic impact on your business.
The need for digital transformation of B2B sales
According to a McKinsey report, well-executed digital transformations in pricing generates two to seven percentage points of sustained margin benefits, with the initial gains seen in as little as three months. This is accomplished in a variety of ways, such as by reducing manual quoting errors, reigning in inappropriate discounting, better management of renewals and subscriptions, and increases in profit margins.
And when it comes to streamlining the sales process and driving greater revenue, few sales tools are as powerful as CPQ. For those unfamiliar with it, CPQ stands for configure-price-quote. This is a class of B2B software applications designed to assist sellers when quoting complex products with a large array of options, packages and other variables.
Most legacy software tools aren’t up to the challenge, and this is why sales teams need the latest CPQ software. CPQ tools can assist B2B sales organizations when it comes to configuring product offerings, setting up pricing rules and discounts, and generating error-free quotes and professional proposals that are customized to buyers’ needs. CPQ software also streamlines the sales process and reduces administrative tasks for sales reps and operations teams.
Why is CPQ important?
When it comes to the reasons why you might need a CPQ in your sales stack, here are a few key business benefits:
Greater speed and accuracy of quotes. Many companies launch digital pricing transformations in order to maximize incoming revenue and minimize revenue leakage (the unintended or even unnoticed loss of revenue). CPQ software makes this possible by enabling sales reps to quickly generate accurate quotes, and to change quantities and apply discounts, without any complicated calculations or data entry. It can also be used to ensure consistent pricing across your organization and support any level of quote complexity.
Streamline the pricing and configuration process. CPQ software enables sales teams to send price quotes and proposals quickly. In our benchmark report for revenue leaders, we found that 84% of SMB companies with a CPQ are able to send a quote within 30 minutes – compare this to just 57% of SMBs without a CPQ. And when it comes to winning deals, greater speed is a major benefit. Superior momentum will generate the credibility and the standard of speed, efficiency and delivery that your customers are looking for.
Enforcing pricing consistency and best practices. With CPQ software, reps can rapidly send out personalized quotes that reflect the guidelines and strategy laid out by sales management. Configured properly, it will ensure sales reps are pricing products and providing discounts in a way that maintains profit margins – even if they’re not fully aware of them. It also makes it easy to support different languages and currencies, which can be crucial for business that have multiple office locations and/or sales teams. And for companies with especially large product catalogs that require months of sales training, a CPQ system is nothing less than a must.
When should you implement CPQ software?
The timing for adopting CPQ is something organizations must consider carefully. Do so too early, and you may not see a return on investment; in situations where deals are extremely simple, there may not be sufficient volume or complexity to justify investment in a dedicated enterprise-grade solution.
Leave it to the last minute, however, and your business will already be set back by sales inefficiencies and revenue leakage.
Your company needs to start looking into a CPQ solution once you find it necessary to:
- Streamline the quoting process and/or reduce the amount of time it takes to generate quotes
- Configure pricing and product configurations more accurately and quickly
- Eliminate quoting errors and inaccuracies, whether due to reps’ mistakes or out-of-date pricing
- Ensure quotes and other deal data are synced to your CRM
- Eliminate inappropriate discounting decisions
- Configure pricing strategies that make it easy to manage renewals and expansions
- Ensure greater adherence to commercial, pricing and legal policies
- Streamlined approval processes for price quotes
- Standardize the look of quotes and proposals
How do you choose a CPQ?
Selecting and implementing a CPQ solution can sound like a big, scary and expensive project. And it often is. But it doesn’t have to be!
DealHub is the #1 leading CPQ platform and can be implemented in a matter of weeks, with no external developer resources, supported by a dedicated in-house deployment team. Contrast this with other CPQs, which typically take 9-12 months to implement and experience a failure rate of 30-35%.
DealHub is the only solution that can fully support the dynamic needs of mid-market fast-growing SaaS companies, and is equally a powerful solution for enterprise businesses.
To find out more about DealHub CPQ, speak with one of our product experts. Whether you’re looking for a CPQ solution or questioning whether you’re at the right stage to adopt one, we’d be happy to answer your questions.