As we’ve moved through our ongoing series looking at the deeper benefits of Configure, Price Quote (CPQ), it’s very important to me that we keep returning to the benefits of CPQ to the sales side of an organisation. Many CPQ projects start with good intent for sales, but somehow change into an ‘administration efficiency’ project along the way. While this is another great benefit of implementing CPQ, it’s important not to lose sight of the opportunities for revenue generation. In this article we will take a look at the way CPQ can be used to maximise sales opportunities.
One of the key reasons CPQ can assist with maximising sales opportunities is that CPQ is often the salesperson’s key portal into the world of their deals. The ability to present the right prompts and the right information to a salesperson at just the right moment opens up amazing opportunities for decision making.
When thinking about 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, but as I moved into a career in sales I kept coming back to the disconnect between that vision, and the reality of a laptop which was the weight of a sewing machine, a slow beeping modem with a wire into the wall, and disconnected software. My conclusion was that Bill’s fingers must have been a lot different to 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 of the most commonly implemented is the ability to recommend cross-sell and up-sell opportunities to the sales representative as they are building a deal up.
Using CPQ, Product Marketing departments can easily specify configuration rules that show recommendations for extra products or services that complement the main product a salesperson adds into their CPQ quote, and often these are higher margin items that really unlock the potential profit in a deal.
Recommendations can be softer too – perhaps simply highlighting price-breaks for higher quantities ordered – just enough information to drop into a sales conversation to prompt a discussion, which is in the customer’s interest, and to reinforce the reputation as a trusted advisor.
Once the products or services have been configured in a deal, it’s also 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 what price to bid at. 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 maximise their own earnings opportunities. If your compensation plans are well designed and they drive correct behaviours, then this can be an amazing multiplier on performance resulting in happier salespeople as well as 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.
In summary, if you know your customers well, if you understand the logic in the buying decisions, and if you have the data to back it up, CPQ can help you maximise the revenue, profit and chance of success in any deal and finally put the critical information into the fingertips of your sales teams.
The series “What CPQ Can REALLY Do For You” is written by Walpole Partnership’s MD, Andy Pieroux.
Don’t miss out on further parts in this series which can be found on the news section of Walpole Partnership’s website.