July 11 by Rashi Yadav
CPQ stands for “Configure Price Quote” but it is much more than that. CPQ is extremely powerful software that goes to the heart of a company’s business – what to sell, how to sell it and what price to charge for it.
Why is Configure-Price-Quote (CPQ) So Important?
To be successful, your CPQ implementation must lay out a robust solution that addresses the challenges your sales representatives face every day. Sales productivity relies on how fast and accurately an organization can produce professional sales quotes. But the challenge is not limited to that, your sales application suite must be performance compliant, be integrated with external systems to present all the needed information to the sale rep and support organizational go to market strategies in products and pricing.
This is where CPQ software streamlines sales in any organization. Like other software implementations, CPQ must be very carefully planned and laid out. But more so than any other software supporting enterprise business processes, CPQ must be tailored to fit specific customer needs.
Over the last decade aMind Solutions has deployed more than 75 enterprise-grade CPQ projects for some of the largest and most dynamic companies on the planet.
We work with business users and IT teams to reduce the friction and time spent delivering CPQ solutions. Outlined below are 10 tips to a successful CPQ implementation in your organization that we have consistently seen to be relevant in all our projects.
#1 Know Your Sales Force
The backbone of any sales process rests on the sales force that will be using the software the most.
Before jumping into deployment, design/Implementation teams must consult with sales representatives. These conversations are critical to understanding existing bottlenecks, inefficiencies, backlogs, and to make sure central problems are tackled first. Keep in mind that the users of the CPQ software are your salespeople. Meeting their needs effectively is critical to success.
#2 Know Your Customer
The key to effective selling is to know your customers very, very well. Do your customers shop across channels? Do you need a global implementation that supports customers and sales teams around the world, or is it limited to a geographic location for location based ordering.
The 4 key outcomes from this exercise are:
- Laying out a product model that best supports customer buying behaviors.
- Consider if your customers prefer bundled services over buying individual services.
- Keep prices competitive by evaluating whether to roll out promotions or set up discounted bundled pricing.
- Identify dependencies in customer organization to layout an approval workflow focused at minimizing process delays.
#3 Know Your Configuration
A major chunk of your CPQ implementation thrives on a flexible and intuitive product model. Constructing a “sellable” product from granular configurable components is central to CPQ success. Best practices for success include:
- Carefully designing your product model to create “offerings” specifically designed to address buyer needs.
- Bundle products intuitively; granting sales reps the ability to determine “what” the customer wants and uniquely combine products/services that cater to specific consumer needs.
- Enable discreet product selection in a sales catalog that encompasses a wider marketing strategy. Configure products as set of options and upgrades to help sales rep choose from a wide range of services to present to the customer.
#4 Keep Pricing Consistent
Harmonizing pricing is often a challenge for CPQ designers. An effective pricing engine helps centralize various pricing rules, supports special pricing and most importantly helps you ensure that pricing is consistent across different interactions with your customers. Your CPQ Implementation must ensure pricing rules don’t overlap or overwrite customizations. When considering bundled, discount or tiered pricing, keep price items updated so prices are reflected correctly in your buyer’s cart.
Common pricing errors revolve around loosely bundled pricing rules which can be difficult to keep track of. Pricing anomalies may also cause discounts to be spread unevenly or incorrectly across optional products. For any sales organization, hapless pricing discounts are a nightmare which may impact long term revenues and cause severe customer satisfaction challenges.
#5 Know Your Software
Grant increased visibility to sales professionals into your organization’s sales processes so they can utilize software capabilities to the max.
Development teams must try to leverage the CPQ tool’s out-of-box (OOB) features to minimize customizations. Poorly executed CPQ implementations often carry a baggage of poor code and customizations to automate business processes. Customization by itself is not bad as long as it’s designed to be maintainable and implemented for high performance. Leveraging your CPQ software’s out of the box features effectively and implementing high quality customizations – both require a good understanding of the software.
#6 Leverage Guided Selling, Cross and Up-Selling
An effective CPQ implementation will use guided selling to help sales representatives derive lists of products to sell based on specific buyer needs.
Guided Selling allows sales rep to take a different path by suggesting sales options rather than presenting a fixed catalog to the customers. With a series of carefully designed need-based questions, CPQ can intuitively spin up a list of products and upgrades explicitly suited for the customer.
Incorporating cross selling and upselling capabilities is a proven simple and effective mechanism to increase the average deal size. And a majority of the sales uplift goes straight to the bottom line. Investments in cross and up-selling usually have an ROI of less than 9 months and so should either be part of the base implementation or one of the first enhancements to the CPQ implementation.
#7 Capitalize on Workflow Automation
Automating business processes in a CPQ implementation is necessary to boost sales effectiveness. A sales proposal becomes meaningless if stuck in delayed approval cycle times. Here are best practices on workflow automation:
- Create a strong CPQ design that adopts smart workflow approvals that automatically scale or escalate to minimize process inefficiencies.
- Design sales processes to guide prospects and qualify leads for an opportunity.
- Reduce administrative tasks by automating business processes where applicable.
- Automate triggered events like follow-up emails, notification emails, automated task assignments, activity assignment, email approvals, etc.
#8 Know Your Integrations
A typical sales organization needs to access information about the customer from multiple sources and they will be interacting with multiple legacy systems to ensure delivery of services end-to-end in the quote-to-cash framework. So do not be afraid of integrations – embrace them.
Your CPQ software suite is designed to integrate with other systems and your CPQ implementation must be designed well to seamlessly integrate with external systems.
#9 Strategize and Prioritize Testing
A buggy implementation is the surest way to ensure lack of adoption of the system. Users do not use systems they don’t have confidence in. And still – testing is often not given the importance it deserves. We strongly believe in leveraging agile methodologies for development delivery. And incorporating testing at every level. Some of the best practices to bubble testing to the top of concerns are:
- Every user story needs to have a test associated that has to pass before the story is accepted.
- Development on the next sprint cannot begin till testing is completed successfully on the previous sprint.
- No feature can be defined without a corresponding test case.
- For every positive test case, there should be at least two negative test cases that try to break the system.
- Performance and scale testing scenarios and plans should be specifically defined and time set aside for executing on them
#10 Get Trained
Augment your CPQ implementation with training and live demonstrations for sales professionals to be better qualified to adopt the tool. A well-trained staff is not just efficient, but perceptive towards sales strategies. Sales representatives can leverage guided selling, smart searches across catalogs and geo-based selling to boost productivity by accelerating routine tasks. Pricing administrators can quickly amend price matrices and modify complex rules in no time.
Whether the CPQ implementation is in-house or purchased, training prepares a skilled workforce.
About aMind Solutions
As an Apttus implementation partner, aMind Solutions brings best-in-class CPQ expertise to accelerate your project and reduce risk specializing in delivering multi-channel CPQ success – SFA, Call Center, Partners and eCommerce. aMind has a long track record of implementing mission-critical CPQ solutions for companies with extremely complex business requirements, including 20 of the top telecommunication companies aMind is privately held and headquartered in San Ramon, California. www.amindsolutions.com