Maximizing sales potential and competitiveness with the right CPQ platform

Today timely response to a customer request is the most important driver of sales above the price or product availability. Configure, price and quote (CPQ) tools can help companies decrease the time required to respond to a customer- information or quote request and improve the likelihood of a conversion.

CPQ tools digitize the sales process, provide price consistency, cross and up-sell recommendations, and improve internal and external collaboration. A guided approach helps salespersons identify the correct product and specific options given the customer requirements. It also helps to decide the pricing and creation of the quote in a user-friendly format.

Benefits of CPQ tools

A well-implemented CPQ tool, together with a well-governed process has several benefits. This includes improved revenue and margin, sales productivity, reduced working capital, better customer experience, and insights. As CPQ tools become more powerful, they can also enable new business models and sales channels, including subscription-based models, product and service bundles, and customer self-configuration.

While these benefits are significant, as with any IT implementation, CPQ has its pitfalls.

CPQ challenges

Businesses often struggle to implement CPQ tools for a variety of reasons:

• Product silos — Siloed product families result in different selling processes, product definitions, varied applications, underlying data, and rules. These inhibit standard product structures, bundled offers, and consistent pricing.
• Over-engineered configurations seek to achieve different price points, but are challenging for customers to understand and salespeople to communicate, and can be difficult to maintain effectively.
• Data quality — Extensive use of spreadsheets and a splintered IT landscape prohibit high-quality data, standardized configuration, and pricing logic, which are essential for CPQ.  
• Sales behavior – Sales behavior can limit CPQ adoption. For example, over-discounting to win business and the prevalence of email-based approvals reduce data consistency, constrain pricing governance enforcement, and effective data analysis.

Selecting the right CPQ platform

A rapidly evolving vendor landscape makes it tricky to identify the right platform for each company. Organizations need to consider several factors, including:

• Value case: A compelling business case with anticipated benefits and trackable KPIs, help to secure organizational commitment. 
• Product configuration — Determine which configuration options are true differentiators. Too many options increase supply chain and manufacturing complexity while harming the UX. 
• Identify the users —Depending on the routes to market, documentation of personas and user journeys aligns the end-user experience with expectations. 
• System integrations — CPQ rests in the middle of various systems, so choosing the right platform can save effort and shorten the return on investment.

CPQ tools can deliver increased productivity, improved quote accuracy, and enhanced pricing execution positively impacting net margins.