The trends are pretty clear: deals are becoming more complex, not simpler. Blame the customer, if you must, but customers no longer have to settle for products that are not exact fits for their requirements. The demanding customer – especially in B2B selling – is a fact of life.
But you can also blame business in general. In an effort to satisfy the modern customer, companies are introducing more products, more options in how they’re sold, and more opportunities for customers to buy custom-made products and specialized services. The result, for a lot of companies, especially in manufacturing, high-tech, telecommunications, life sciences and healthcare, is a much larger catalog of products, which makes manual quote creation more difficult and introduces more opportunities for mistakes.
All the while, companies have a need to protect margin. Offering discounts is one way to help close deals, but not knowing the threshold for discounts is common when every deal includes a different mix of products. A common problem is the need for an approval on a quote from a supervisor; that supervisor has to do the math, ensure there’s still margin in the deal and give a thumbs up – or, heaven forbid, a thumbs down which starts the process all over again, much to the customer’s chagrin.
There’s a solution out there – and it’s called Configure Price Quote (CPQ). It automates the process of creating quotes and proposals, wrings out the errors, sends quotes through an automated approval process, and makes both the sales rep and the customer happier by getting quotes done faster, more accurately and with the content the customer and sales rep needs.
But CPQ isn’t yet a given, even in companies that are in its sweet spot. Less than a third of companies in the target markets for CPQ are using the technology, according to Gartner. That’s a shame – because it means that a lot of companies are leaving money on the table.
The five areas that Aberdeen highlighted in its 2013 report “Configure Price Quote: Best In Class Deployments that Speed the Sale” all translate into lost money for those who lack CPQ.
CPQ users have a 105 percent larger deal size than non-users
Doubling the size of the deal is a function in part of the maturity of the sales organization – a more mature organization is more likely to have sales automation in place, after all – but it also owes something to CPQ’s ability to guide reps toward up-selling and cross-selling opportunities and to suggest useful bundles of products suited to the customer’s needs.
CPQ users have a 49 percent higher proposal volume than non-users
Speeding quote creation from three days to 15 minutes has a natural impact on the number of proposals sales reps can create – and then revisit with customers until they have exactly the right proposal for the deal. It also allows reps to create alternative proposals to help them maximize the potential of each deal.
CPQ users have 28 percent shorter sales cycles than non-users
The ability to get opportunities through the sales cycle without having to dodge errors in proposals (CPQ-aided proposals have 40 percent fewer errors) and endure a manual approval process means that reps can wrap up sales faster. Not only does this allow reps to move on to other deals but it means that customers get the products and services they need faster, making them more satisfied and more likely to remain loyal.
CPQ users have 26 percent more reps achieving quota than non-users
The acceleration of the sales cycle has a lot to do with this, but so do the capabilities CPQ provides for up-selling and cross-selling. CPQ also helps reps break out of the rut of selling primarily the products that they know best, expanding their opportunities and making for happier customers.
CPQ users have a 17 percent higher lead to conversion rate than non-users
By accelerating the sales cycle and eliminating errors, CPQ helps avoid issues that might cause buyers to rethink their choice of vendor at the last minute. It also helps sales reps seem more like authorities about your product mix and build confidence in them.
If you don’t have CPQ and you sell a complex product mix, think about those numbers for a moment. How much better would your bottom line be if your average deal size was twice as large as it is today? How much better would it be if an additional quarter of your sales force was making quota? How much better would it be if you could shorten the sales cycle by a quarter? Imagine what that would look like. Then, subtract your business today from what your business could be doing with CPQ. The remainder is the money you’re letting slip away because you aren’t investing in the right technology to help your business sell the way it’s set up to sell. It’s money left on the table that’s just waiting for you to pick it up.
CPQ helps you achieve the results that your product mix and sales talent should deliver, instead of what your processes will allow. To learn more, read our report “CPQ: the ROI Argument” and plug your own numbers into our ROI calculator to see what the impact of CPQ on your business would look like.