But they also mentioned they are looking at other solutions. Time is of the essence. You need to work quickly and efficiently to get the quote out before your competition. But if you work via manual sales processes, you will have a lot of things working against you. That’s where CPQ comes in.
CPQ stands for “Configure-Price-Quote”. Data proves that the best CPQ solutions optimize sales teams’ effectiveness in a number of ways:
Below, we examine what makes CPQ more effective than manual processes. However, not all CPQ solutions are created equal. We’ll also look at what differentiates basic CPQs from today’s advanced solutions, and why this new type of CPQ is so much better at enabling sales teams to achieve higher revenues.
Why Quoting with CPQ is Better than Manual Sales Processes
CPQ is a powerful sales technology that empowers sales reps to produce accurate pricing and generate faster quotes.
Now, let’s do a deeper dive into why exactly it is an improvement over using an old fashioned manual quoting process:
Configure. For starters, you’ll have to figure out the product configuration. That requires you to review your product documents. Finding what your lead wants is straightforward. But because it’s a complex order, you’ll also have to review product dependencies to make sure you send them everything they need to make it work.
With manual processes, this takes a long time and it’s easy to make mistakes. In contrast, CPQ is a powerful sales tool that will automatically show you what products are relevant and which ones must be packaged together. This is much faster and accurate, and helps to minimize the possibility of oversight. Research from Oracle found that automating quoting and approval workflows can improve order accuracy by nearly 100%.
Price. Once you get the product mix right, you’ll have to set a price. You’ll also have to take into account any discounting you want to offer.
If you do this manually, you’ll need to pull up the separate price list document, which may or may not be accurate. You’ll also have to pay attention to any pricing differences from bundling before applying your discount. But with a CPQ, pricing strategies are updated automatically and all the calculations performed for you instantly.
Quote. Now that you’ve got all the information you need for your quote, it’s time to send it to your lead. That requires you to take everything and organize it into a single document.
When this is handled manually you’ll need to manually communicate the quote to the customer. With a CPQ, the quote will be automatically generated for you, so you can send them off for approval. But then, whether you are using manual processes or a CPQ, you will need to transfer all of the information into a PDF or Word document that you create yourself.
And it’s here that a huge divide opens up between the basic CPQ of the past, and the evolved CPQ software of the future.
5 Capabilities of the Best CPQ Software Sales Teams Use to Achieve more Revenue
A CPQ is required to create accurate quotes quickly, but sending your quote off for approval still requires you to coordinate conversations and feedback from both the Procurement and Sales managers. That takes time, slows down movement of your prospects through the sales pipeline, causes confusion, and risks errors.
The reason all this is necessary is because many CPQ solutions only do pricing and product configurations. In fact, the reality is that document generation is not the only place where CPQ technology benefits from innovation. Many CPQ solutions will be more effective if they are augmented with new capabilities in a variety of ways.
Let’s look at the five best CPQ software features successful sales teams are using right now to grow revenue:
Configured Rules and Pricing
A basic CPQ allows companies to input their pricing and product catalog. That removes the time-consuming task of having reps manually go through Excel sheets and product catalogs. However, it doesn’t fundamentally change the way sales reps interact and use the information to generate their quotes.
DealHub’s advanced CPQ technology lets leadership teams input product configuration and pricing rules. The effect is sales strategies for how products interact together can be automated, ensuring accuracy while removing all the time and manual work it takes to achieve the same result manually.
For example, you can make pricing flexible to account for different regions where you sell. Or, you can make sure that certain products that must be sold together are, in fact, always sold together. All the adjustments are made automatically by the CPQ based on rules input into the CPQ by leadership.
These capabilities benefit companies by evolving their expectations of quoting beyond just product/price accuracy. Instead, they can manipulate their catalog freely and find the best combination of products and pricing to maximize the revenue impact of quotes.
Guided Selling Sales Playbooks
All CPQs can filter price and product lists to create configurations for a quote. However, this functionality is limited to accurate price/product combinations. It won’t help sales reps tailor their quotes to maximize the revenue opportunity for every deal in their pipeline.
An advanced guided selling playbook does exactly this. It can ask reps a series of questions about their deal in a logical decision tree setup by leadership. Filtering the options in that manner allows the CPQ to be a recommendation engine that can configure the most relevant products and present multiple different options to sales reps for how to construct a quote.
This gives leadership the ability to apply the principles of the company’s broader sales strategy to every quote generated. This is impossible with basic CPQ solutions because sales reps don’t always know the big picture of what product/pricing combinations are performing best for different buyer personas. New CPQ technology lets reps stay focused on their individual deal but automatically receive a quote that benefits from company-level insights–the best way to increase deal size and maximize the revenue opportunity from every lead.
Quote Approval Workflows
While a basic CPQ can generate a quote, it doesn’t help with getting approvals for discounts. Sales reps must spend time requesting manual permission and awaiting approval, even for routine changes. A lack of workflow automation creates additional admin work and slows down sales velocity.
In contrast, new CPQ technology offers integrated approval workflows that allow sales team leaders to set maximum discounting and margin rules that can be automatically applied. That way, only quotes that deviate from established product and pricing strategies must be reviewed for approval. If a routine discount is offered, the quote doesn’t have to be held up for days.
This offers three major benefits. First, it saves on the additional administrative work that forces leadership to waste their time reviewing quotes that already conform to the sales strategy. Second, it empowers sales reps by removing the sense that management is always looking over their shoulders anytime they want to do something they think will move a deal forward. And third, it streamlines the quote approval process so reps can respond to their prospects faster–which research shows is one of the most important factors in increasing close won rates.
Version Control
Modifying quotes with a basic CPQ is a painful process. Every stakeholder that makes changes creates a different version of the document. To finalize the quote, all the disparate versions must be reconciled.
Often, many of these versions are floating on different computer desktops and must be requested via email. However it’s done, manual version reconciliation is an error-prone process that can significantly decrease response times. It can even court disaster if something critical is copied incorrectly or overlooked.
DealHub CPQ eliminates all of these problems by performing version control on documents as stakeholders edit them. This maintains a single source of truth that accurately reflects the aggregation of all stakeholder modifications, without the need to waste time on any manual tasks. Quotes can be amended as quickly as possible, decreasing time to quote and giving stakeholders their time back to focus on activities that drive revenue.
CPQ Subscription Management & Co-terming
CPQ needs change continually. Companies might need to add more licenses throughout the year due to explosive growth, or shift the terms and conditions of their licenses due to bulk discounting. Basic CPQs make it very difficult for sales contract management to handle these types of co-terming changes, because they can’t automatically calculate how to adjust billing to place all of the licenses on a single management and renewal timeframe.
This is just one reason why your sales stack should include contract management software.
Although this is not a ‘feature’ of CPQ, it’s a serious flaw in its company-wide usage that causes pain. It takes time to manually understand where price points shift, and paying multiple invoices throughout the year is confusing and potentially generates additional transaction fees and paperwork.
Advanced CPQs have the ability to automatically do these calculations. By reducing the admin burden, companies can not only streamline their own finance and bookkeeping, but also provide a better customer experience to their customers after the quote has turned into a sale.
Conclusion: Today’s highest performing sales teams use advanced CPQ technology to achieve higher revenue
Creating sales processes is an important strategic decision for any sales leader. In today’s competitive market places, a manual sales process simply cannot compete. CPQ technology automates away inefficiencies and automatically builds quotes faster than even the most experienced human sales rep. But CPQ is also evolving, and sales teams looking to keep their edge must adapt as newer technologies become available.
It took sales reps an average of ninety minutes to generate quotes manually. Think of the impact a slow quoting process has on your sales cycles. DealHub’s advanced CPQ technology lets them do it in just 8. It’s so easy and effective that we’ve seen adoption rates as high as 100%.
And not only are these quotes generated faster, but they are more accurate. Today’s highest performing sales teams use evolved CPQ to guide them towards the pricing/product configurations that maximizes the revenue opportunity of their pipelines.
The result is a sales process that maximizes the revenue impact of sales quotes, no matter how complex, for every deal your sales team works on.
DealHub CPQ has been selected as a Top-50 Sales Product by G2 and recognized as a leader in the CPQ Momentum Grid. We have innovated the next generation of CPQ to empower teams to connect their tech and their teams to send their revenue to new heights today and in the future.
