The Time Has Come for CPQ Software
Not long ago, if you told your sales reps your company was going to enforce pricing rules and discounting guidance, you'd probably lose them at the word enforce. But in this era of technology advances that shortcut virtually everything we do, the tide is turning. High-performing sales teams are learning how technology, specifically data and analytics, can help them sell more effectively, especially when you start with the end result—that they'll be able to close more profitable deals, faster and with less effort. And the way to do that is by adding configure-price-quote (CPQ) software to your CRM system.
Implementing a CRM solution is a great first step. Yet getting sales and marketing teams organized and efficiently managing opportunities isn't enough. Adding CPQ software can help improve your sales team's effectiveness. Instead of your sales reps having to pull information from different spreadsheets and sets of product information to create a quote, CPQ quickly guides them through the product configuration and provides upsell and cross-sell recommendations. This makes your reps more accurate and faster, effectively making them even more responsive to your customers.
Here's a look at why companies are adding CPQ to their CRM environments to successfully make transformational gains, such as turning around declining margins, increasing revenues, and outselling their competitors, even in this highly competitive global economy.
A study conducted by the Industrial Performance Group found that average salespeople spend just 38 percent of their time on revenue-generating activities; for peak performers, it's 58 percent. Imagine the gains if you could get those 38 percenters up to 58 percent. CPQ has the horsepower to make that happen. Research also shows that sales teams using CPQ are seeing increases of up to 49 percent in sales rep productivity. How? With the ability to quickly configure, determine price, and then create a professional-looking proposal, reps can turn quotes around in minutes or hours instead of days or weeks. The configuration capabilities also greatly reduce errors, allowing for greater efficiency throughout the order management and supply chain teams, with the number of CPQ users hitting their quotas significantly increasing.
With large and complex product offers, it is difficult for any salesperson to remember all of the possible combinations, accessories, and options available for every product. Here, CPQ comes to the rescue again. With guided selling and cross-sell and upsell recommendation capabilities, sales reps can now easily create solutions that are truly tailored to the specific needs of their customers. Customers receive comprehensive quotes from your sales team, making it easier for them to buy from you—and they don't have to use as many suppliers to get what they need. Your sales teams are better able to sell more of the catalog to more customers.
Stop Leaving Money on the Table
Improving margins is difficult when companies distribute a spreadsheet to sales reps, coupled with stern warnings about discounting compliance. What's more, this creates negative relationships—pitting sales reps against pricing managers—as they convince everyone around them that the only way to get the deal done is by lowering price. Today's CPQ technology instills disciplined pricing processes with performance metrics. Sales managers can pull up dashboard analytics and instantly rank deals, customers, and salespeople relative to peers. The result is a much clearer assessment of an individual's contributions to improving the profit performance of their company. And instead of focusing on discounting at the back end of negotiations, which is akin to stopping a racecar driver with a few speed bumps, companies can now incentivize salespeople into caring about profits at the start of a deal by confidently providing them with accurate, differentiated pricing terms.
But Don't Stop There
Now that you've added CPQ to your CRM environment, business is running smoothly. But don't stop there. When it comes to minding the bottom line, high-performing sales organizations know that accurate, science-based pricing optimization and guidance equals profits. Getting to this level means integrating pricing excellence into your CPQ solution. The right price is set with confidence, helping the sales team protect margins and win more deals. Now, the entire sales team is out getting coffee—because coffee is for closers.
Russ Chadinha is the senior product marketing manager at PROS. He is responsible for the development of the company's go-to-market strategy and positioning of its sales effectiveness products, including Negotiation Guidance, Scientific Analytics for Sales, Sales Optimizer, and Cameleon CPQ.
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