How the Changing Customer is Making CPQ a Must
If you’re a buyer (and we all are), your expectations have changed a lot over the last decade. For example, buying a car used to involve a lot of back and forth with sales people, initial agreement on a price, then the rejection of that price by some unseen manager, then more back and forth. Even after agreeing to a price, you’d be hit by upsells – extended warranties, extra features and on and on. Since you’d already been worn down by the first part of the negotiation, you’d now be more of a pushover for the upsell, or so the thinking went. Times have changed, mostly because customers will no longer stand for this treatment. Their time is too valuable, they can find other alternative sources to buy from, and they come to the negotiation with as complete a set of information as the salesperson. In the face of this, auto sales have been forced to change. The same goes for B2B buying: time is too valuable, alternatives abound, and your customer can quickly compare you to your competition. So how do you evolve? One key way is to change the way your quotes and proposals are generated and presented. Cars are complex, but they’re nothing compared to custom manufactured goods and tailored services; these can result in an unlimited number of options for customers (and salespeople) and create real pricing and proposal-generating headaches. There’s a saying in freelance work – you can have it fast, you can have it good or you can have it cheap: pick two. Without some automation, quotes and proposal generation is like that with a couple of minor tweaks: you can have it fast, you can have it correct or you can have it profitable, pick one. If you rush proposals, they’re going to be riddled with mistakes. If you get them right, you’re going to have to spend time (time the customer often can ill afford to wait). If you want it profitable, it’s going to mean getting approvals from managers who will have to review proposals for margin protection, slowing the process and doing nothing to improve accuracy. Configure Price Quote (CPQ) software allows you to avoid making those compromises. By automating your product and pricing information, salespeople can build quotes not just in a point-and-click way, but in a guided way. How does this appeal to the modern customer and his or her modern expectations? The most obvious way is in terms of speed; reducing the time to create a quote allows customers to have proposals in hand soon after they conclude their discussions with sales, allowing them to act on what they need to do to complete the sale. This improves your sales velocity and allows your customers to get on with their business. CPQ has other positive impacts as well. Improving quote accuracy means the customer gets exactly what he or she wants, and when it’s delivered it will work as advertised. Conflicts between the things you sell are caught by the system. For example, a piece of machinery can’t be sold with mismatched connectors or with the wrong gearing system because that logic is built into the CPQ solution – the wrong parts simply can’t be added to the order without an override and special approval. The same CPQ functionality also allows salespeople to upsell at the right time and with the right upselling offers. In a complex scenario, these upsells can be afterthoughts; CPQ flags them for salespeople during quote creation and allows customers to consider additional products and services during the proper point of the sales process instead of at its end. From the customer’s point of view, CPQ allows the salesperson to appear as though he or she has a thorough grasp of everything you offer, an encyclopedic knowledge of how various products and services work together, the agility to suggest the best ways to use what you sell through upsells integrated into the sales conversation, and the ability to deliver a quote at the speed of the customer’s expectations. The buying experience is radically different when CPQ is involved. With it, and accurate quotes are in the customers’ hands in under an hour. Without it, you’re back to a process that can take hours or even days, leaving the customer hanging. Sales take longer to close and customers are forced to wait for the purchases they need to run their businesses. So, as your product and service mix becomes more and more complex, you have to ask yourself: can my business afford to keep delivering the poor experiences that a manual quoting process force on my customers? If the answer is no, then you need to consider CPQ to create the sales experience your customers have come to expect. That’s an argument for CPQ from the customer’s point of view. Read our report to learn the ROI argument for CPQ.
Chris Bucholtz | December 29th, 2015