CPQ is ‘hot’ according to Gartner. Named as one of the fastest accelerating CRM technologies this year, Configure Price Quote is helping to transform sales strategies and improve customer experience in increasingly complex and demanding markets.
But the pace of change has been so swift that while the analysts are discussing the merits of CPQ, it has evolved from a useful device to disruptive technology when placed at the very heart of the entire marketing and sales life-cycle. Fired up by CPQ’s effectiveness and potential, organisations are now asking for more - an all-encompassing platform to address the total sales process and the entire customer journey. So old-style CPQ is now outdated. Long live next-generation CPQ – the Quote-to-Cash platform.
Moving beyond CPQ
So how and why has CPQ developed into Quote-to-Cash? And why has a whole mix of factors combined to make it the right technology - right now?
In the past most organisations relied on legacy systems or basic spreadsheets to manage product catalogues and basic customer data. Information was locked up with individuals and difficult to share across the business. Where pricing and quoting systems did exist, they often didn’t work well together, resulting in manual processes, re-keying or multiple data entries.
The move to digital means that these methods are no longer adequate. There’s no coordination between multichannel sales leading to inconsistencies. But understandably customers expect a fast, seamless service regardless of their contact method.
Consequently, competition has intensified – there’s pressure to get new products and offers to market faster and to be more innovative with pricing, customisation and bundles. In some sectors such as publishing, telecoms and software, subscriptions with sophisticated price band structures have become part of a changing business model.
Personalised targeting has taken off and customers are given more input into how their products and services are delivered. Product portfolios have grown in size and complexity. This makes life difficult for those in the frontline who actually have to sell the products and services. They sometimes have little authority to bundle and make offers themselves and have to keep the customer waiting while a quote is approved or, in some cases, scrutinised by the legal team. In short, selling has become a labyrinth where taking the wrong path can lead to errors and profit erosion despite the need for faster sales and cash flow.
This is frustrating for product managers and marketers too. They want to develop new products and implement promotional plans, yet know that sales teams will focus only on the products and offers that they know well. They are left with the challenge – how do you sell across an entire product catalogue?
Of course this is seeing the sale only from the seller’s point of view. Customers are not interested in these challenges. So as well as coping with the shifting sands of today’s commercial world, companies have to make the customer experience a priority and this demands insight across the entire customer journey.
As consumers our expectations have been shaped by companies such as Apple and Amazon which can identify customers at all stages of the buying cycle, know their purchasing patterns and can tailor propositions to match. We expect that same intuitive selling whatever we are buying, regardless of how and when we are buying it.
CPQ, the cloud and CRM
Fortunately, concurrent to these developments, the first cloud applications native to Salesforce began to emerge. These coupled CPQ with CRM and all the benefits of the cloud. They were easy, fast and affordable to deploy without major capital investment. Saleforce’s 360o customer view meant CPQ data could be held in a centralised, single location for consistency across channels and throughout each customer contact.
But the market is demanding that CPQ goes further. What happens beyond the quote? There’s still the need to manage the sale through to fulfilment, invoice, the collection of cash and then round again to building the sale to develop a more long-term customer relationship.
Next-generation CPQ platforms such as Salesforce-native CloudSense Quote-to-Cash platforms now fill in the gaps in the actual CPQ process and then extend the benefits through this entire sales lifecycle. Likewise, they acknowledge that a purchase is often just the start of a buyer/seller relationship. By centralising all customer information they enable sales team to identify cross- and up-sell openings or in the case of a subscription sale, provide a pipeline of imminent renewal opportunities.
They also recognise how product portfolios and pricing structures have become more sophisticated to enable more tailored offers on the one hand – and faster quotes on the other.
So they allow a single product catalogue with a rules engine which guides staff – whether they are at a desk, contact centre or using mobiles or tablets out in the field - through a sale and provide parameters to ensure an offer remains within profit margins. These platforms don’t just generate a quote, they ensure it’s a valid quote – that won’t entail delays through an extended approval chain.
In this way the sales team has flexibility to configure and combine different products based on an individual customer – without the company losing overall control.
Pricing rules are defined centrally and used across all sales channels and variations can be based on a range of criteria from different customer types, time zones, currencies or within the context of a customer’s existing products and services. Quotation documents are automatically generated and emailed to a customer for approval.
Even if a quote doesn’t lead to a sale, the information is already within Salesforce so the customer can be contacted at the next promotion or so details are on hand if they decide to buy via a different channel. If the sale goes ahead, contract approvals with pre-integrated electronic signature are emailed to the customer with all activity tracked, including the negotiated versions, for auditing.
Beyond this, the platform also provides valuable management information which can be used to react rapidly to market changes and for well-informed planning.
Next generation CPQ also supports evolving business models including a move to subscription sales or the development of an online self-serve catalogue for straightforward or low-value sales giving the sales team more time to focus on selling from the higher end of a range.
Going beyond CPQ provides companies with the best opportunity to maximise sales by quickly launching new products and prices fast, increasing order value. It enables teams to eliminate the lengthy administration of some sales and remove order errors. Importantly, it also results in a smoother customer journey – which is far more likely to lead back to more sales in the future.
In this way, next generation CPQ – or Quote-to-Cash - provides the much-coveted link which closes the customer loop.
By Richard Britton, CEO of CloudSense. The CloudSense platforms deliver transformational sales effectiveness for companies configuring, pricing and quoting products and services from simple sales to sophisticated subscriptions.