CPQ stands for Configure, Price, Quote. It is software designed to ease the complexities of the sales team by enabling it to generate quotes quickly and accurately for complex products. Each part of the abbreviation represents a key component of the modern sales process:
· Configure: Almost all businesses today are familiar with the old business mantra that says “The customer is the king” — Well, the same mantra is applicable for businesses to succeed even today. Customers’ demand has become specific, and they now expect products and services that can be tailored based on their specific requirements. The precise requirement of personalized products and services from the customers would keep the sales team on their toes to configure and offer custom packages. The sales reps will be responsible to manage and figure out which products and services should be bundled, whether these bundles need to be approved, and what will be the process for getting these bundles delivered to the end customers. This is when the – “Configure” from CPQ comes into the picture and helps your reps in simplifying any complexities and confusion that might occur during the process.
· Price: Being a business in the modern era, you cannot afford to go with the outdated option of the “one-size-fits-all” pricing model. This type of pricing model certainly cannot be followed for today’s customers and, is also not too realistic when it comes to SaaS sales. No matter your business deals with high-volume pricing, bundled pricing, or any other kind of pricing which would also include special discounts or offers, you will be dealing with an overwhelming number of facts and figures and you will have to keep a track of the same. Here, even the smallest miscalculation can cost you a valuable customer, which you as a business would never want. This option helps you in offering the right pricing model to the customers based on the required configuration already done.
· Quote: A quote that is being generated by the sales team must be clear and precise. Not only the quote should look professional, but it is also required to be clearer, and precise and must accurately show the price quoted to the customer by a representative during the sales cycle. Also, most of the time a quote needs to be accompanied by various other documents like SOW, Legal, and MSA to name a few. CPQ offers a fully configurable solution where all types of documents and templates can be generated and managed and can be used by the sales reps as and when they need them.
How does CPQ software work?
Using CPQ software allows your sales teams to address various challenges that are faced during different stages of the sales cycle. This is done through a combination of process automation, guided selling, and quote management.
When you decide to choose the CPQ tool along with subscription management software, you can easily automate the complete quote-to-cash process. The automation of the process is done by configuring rules for bulk discounts, approvals, customizations, and more. Whenever any sales process is initiated by a sales rep, CPQ plays an important role and ensures that the entire process is carried out within the specific set of rules that your business has decided and has established for pricing, discounting, and approvals, and so on. This determines that your sales team is even more agile and can perfectly streamline the entire sales cycle as per your customer’s requirements.
While you decide to choose SAP CPQ services from Acuiti Labs, you can easily bridge the gap between your front-end sales and back-office finance teams. CPQ can be called a sales tool, which is a lot more capable and is not very different from a customer relationship management (CRM) system. It comprises of various things like discounts, contract terms, and billing terms, which are considered closely related to an enterprise resource planning (ERP) solution. That is why, it was previously mentioned that CPQ is known for filling the gap that exists between CRM and ERP systems, thus allowing a higher degree of interdepartmental collaboration and making it possible to expand your stakeholder set.
Benefits of choosing SAP CPQ software for your business
There are several advantages of using SAP CPQ software. Listed below are a few of them – Check this infographic to know more
· Never lose a sale due to bad information – Let us take an example to explain this scenario in detail. Suppose a prospect tells one of your sales reps that they are willing to buy two different software licenses, but they would those purchase as a bundle at a discount. The sales rep initially tells the customer that their requirement can be fulfilled and submits the bundle for approval, only for getting the approval to be denied. The sales rep then goes back to the customer and informs them that contrary to their previous commitment, they will not be able to bundle the products and loses the sale as a result. But when you use SAP CPQ, you can easily prevent this scenario from happening by building in automated business rules and logic — A system with a CPQ solution, would have automatically indicated that product bundle was not allowed or could not be done, and the sales rep could have worked with the prospect to find a different solution to this unique business challenge.
· Having a better understanding of customers through guided selling – Your organization’s success largely depends on the way how well your sales reps are able to connect with your customers. Better understanding of your customer’s requirements will always allow you to evolve and offer better service each time. Though a lot depends on what information you are collecting and what questions you are asking. More accurate is the information you collect from your customers, and better will be the offerings based on your customer’s specific needs. SAP CPQ solutions use guided selling to learn about the customers by targeting specific questions and evaluating itself based on their exact requirements. Once it collects the information, your CPQ solution can automatically produce recommendations customized based on your customer’s specific needs. Another advantage of using guided selling for a business is that it helps your sales team in identifying upselling and cross-selling opportunities. For example, A CPQ Software, based on guided selling can specify a particular software package opted by a large number of customers, which the sales team can further recommend to other customers and increase the sales and revenue for the business.
· Minimizing the complexities and generating quotes with ease – Most SaaS companies have a complex price book, with multiple pricing tiers and dependencies for each tier. Guided selling uses the same business logic and rules mentioned earlier to help both sales teams and customers make sense of these intricate pricing structures by automatically updating the quote as products and services are added. Since everything is done through automation, you can eliminate the risk of human error and ensure more accurate consistent pricing.
· Streamline the sales cycle – A good SAP CPQ software for your business can help you in eliminating most of the manual data entry and errors linked to these, thereby shortening the sales cycle. CPQ solutions are constantly getting better and are becoming even more sophisticated with time. It is very likely that the average sales cycle for CPQ is getting shorter and more reorganized with time.
· Increase sales team performance – The performance of any sales team is quantified only through the data and the performance metrics, and the businesses where the sales teams are using CPQ solutions have already shown promising results. “According to the Aberdeen Group, CPQ adopters consistently report higher attainment of sales quotas, higher lead conversion rates, higher average numbers of proposals delivered, and higher average deal size than non-CPQ users, as shown in the table below. CPQ makes it easier for sales reps to identify upsell and cross-sell opportunities, thereby increasing their average deal size.” CPQ solutions also help in streamlining the ordering process for complex products/services that our organization offer — even enabling customers to generate quotes and place orders on their own, making customers more likely to complete their orders.
· Gain better control over quote document generation – Many organizations that are using CPQ solutions can generate quote documents including custom components and company branding, which is also the requirement of today’s business. When your sales reps produce a quote document that is not only precise and easy to understand but visually pleasing and professional, your business is going to create a lasting first impression and will also guarantee a better overall customer experience.
How to understand that your business needs an SAP CPQ solution?
Deciding whether you should buy CPQ software is not exactly what you need to know; having said that, there are a few key pointers that can make you know that CPQ might be a smart investment for your business. Here are a few reasons that can help you in identifying the requirement of CPQ for your business-
1. If your business offers any product or service that has got complicated pricing model, using CPQ not only simplifies the entire pricing and billing model for your customers but also helps you in offering accurately tailored products/services at the best possible price.
2. If you have a product and service, you think is outdated and/or you are looking for a way to update your pricing information.
3. If a lot of time is being consumed by your sales team putting together a quote for your customers. Or, if they are stuck in difficult pricing or configuring Scenarios that are creating confusion for your customers.
4. If your sales team is struggling to identify upselling and cross-selling opportunities and you are losing valuable customers because of this, then CPQ can be a savior for your business.
5. If your sales team does not have complete transparency and you are lacking visibility through your sales process
6. If your sales team is dealing with a lot of manual errors during the process, CPQ can fully automate the process and help you in eliminating such errors that can cost you your valuable customers.
7. If you are lacking in offering the right quotations to your customers and your offered quotes are also unable to meet the demands of your customers, then it is high time you should choose an SAP CPQ software for your business.
8. If you are looking to switch to usage-based billing capabilities, CPQ is going the most appropriate business solution for you.
Why Choose Acuiti Labs for CPQ Services –
Choosing right CPQ partner for your business is very important. While you choose Acuiti Labs as your Configure Price Quote Partner, you are helping your sales teams in delivering the best in market customized service, and user experiences. All this is possible because of competitive pricing, clear and conscience proposals, and a variety of product conﬁgurations we help you with. Our end-to-end CPQ solution speeds up the sales cycle for you and allows your reps to effortlessly sell through any channel at any time, improving the overall performance and efficiency of your business.
Basically, if your organization is looking for options to improve the sales process that can help you in configuring products and services in the most appropriate manner, manage all kinds of pricing complexities, and help you in automating the complete quote process, then our customized SAP CPQ solution is all that your business need.
Acuiti Labs can help businesses with top-notch CPQ solutions for clients from various industries like Hi-tech, Finance, Media and entertainment, technology, manufacturing, and retail/service industries to achieve their business sales goals. If you would like more information on why SAP’s CPQ technology from Acuiti Labs is right for you, get in touch with our certified SAP Consultant and we’d love to tailor a solution for you just the way you want!