Selling in 2016 is tough. Competition is fierce, negotiations are difficult, and executive growth expectations continue to rise – all in the midst of a challenging global macroeconomic environment. The marketplace is rocked with constant change from digital businesses disrupting traditional models, and extraordinary supply and demand volatility. Big data siloes have yielded little. Deals are hard-won, and sales teams guard their customer relationships even more closely.
In days past, if sales teams were told their companies were going to enforce pricing rules and discounting guidance, you’d lose them at 'enforce.' But in this new era of technology advances that shortcut everything we do, the tide is turning. High-performing sales teams are using applications combining data science-driven prescriptive analytics, intelligence and automation that helps them sell more effectively with less friction, especially starting with the end result: Sales reps closing more profitable deals, faster and with less effort. How? By linking CPQ – Configuration, Pricing and Quoting – with Customer Relationship Management (CRM) systems. Here’s the distinction – by making smarter decisions faster with data science-driven guidance, sales team can generate meaningful revenue growth.
Here’s why companies using CPQ with CRMs are making transformational gains, turning around declining margins, increasing revenues and outselling their competitors – even in a tough economy.
More Targeted Pricing and Quoting: For many sales teams, prices are communicated via emailed spreadsheets and catalogues and forced to manually look up prices for products they’re selling. It’s important to keep the number of prices manageable, so most organisations stick to a simple one-size-fits-all pricing.
This strategy doesn’t take into account variables that determine what a customer or customer group with shared traits might actually pay for a product. It doesn’t account for globally competitive markets where raw materials and currency fluctuations affect pricing and what companies are willing to pay.
CPQs supercharge CRMs so companies no longer need to distribute new price lists. They can segment customers and deliver accurate, targeted quotes based on data science-driven prescriptive analytics that show them what customers are willing to pay. There’s no manual quote building; reps simply point and click to configure quotes, with intelligent, guided selling built in. They see account-specific product and bundled prices, cross-sell and up-sell opportunities, discounting guidance and promotions – all from the CRM.
Companies are able to overcome consistency challenges. For example, one customer told us they were approached with multiple calls into the sales team, hoping each time for a different rep who would offer a better price. With CPQ eCommerce solutions in CRMs, reps have a complete quote history, so they sidestep the issue.
Stop Leaving Money on the Table: Today’s CPQs instill disciplined pricing processes with performance metrics. Sales managers have dashboard analytics that instantly rank deals, customers and salespeople relative to peers. They can offer coaching to guide team members, with a much clearer assessment of each person’s contributions to improve profit performance. Instead of focusing on discounts at the backend of negotiations – akin to stopping a racecar driver with a few speed bumps – companies can now incent salespeople into caring about profits at the start of a deal by confidently providing them with accurate, differentiated pricing terms.
Generate Meaningful Revenue Growth, and Expand and Sustain Profitability: When it comes to minding the bottom line, high-performing sales organisations know pricing and quoting enforcement equals profits. Today’s CPQ tools – with data science-driven prescriptive analytics – integrate optimised pricing and sales execution in the CRM that increases adoption and enables organisations to exploit a strategic asset – their own data. Companies achieve a level of connectivity where critical pricing information is communicated with ease. Prices are set with confidence, eliminating profit leaks and one-price-fits-all pricing, helping them win more deals. Collaboration and visibility into negotiations means expertise is shared with each new deal, which exposes best practices. The business won’t just thrive: It will realise its revenue and profit potential.
By Tonya DeWeese, Worldwide Vice President Strategic Consulting, PROS, revenue and profit realisation company.