November 8 by Brion Schweers
In today’s flat economy, executives are scrambling to compete in this new customer centric, omni-channel, and digital era. The business climate is much more fluid than ever before, and digital disruption has forced companies to rethink what they sell, how they sell it and who they sell it to. Buyers have also changed the way they decide on what to buy, how they buy it and who they buy it from. Thus, Configure Price Quote (CPQ) solutions must also evolve to support these changing dynamics. In this blog, we identify 5 key trends that are affecting large businesses, and how a modern cloud-based CPQ solution must be built to address these needs.
Modern Sales Trends
The reality is that B2B selling is getting harder than ever. Sales studies have consistently shown that up to 50% of the time, buyers will select the vendor that makes first contact. Even with this need to be immediate, reps typically only spend about 22% of their time selling – and 54% of reps won’t hit their quota this year. Clearly, the fist role of any CPQ tool should be to help Sales prepare and present accurate quotes in a timely manner. Thus enabling reps to spend more time in front of their customer, gain the first responder edge and close more business.
Equipping teams with a CPQ solution that solves these problems has always been the goal for companies with large product catalogs, and/or sold complex products and services. For these companies, investment in a CPQ solution was common sense. Now these same companies are faced with new market forces – including multi-channel sales strategies, global sales teams and M&A activity – which are creating an ever-expanding product catalog. The modern day business environment is increasing the number and types of companies in search of an effective CPQ solution.
5 Trends Influencing Modern CPQ Solutions
To summarize the changing demands for a modern CPQ tool, we identify five key trends:
1. Configure Deals, Not Products – CPQ has evolved from a focus on product configuration, to deal configuration. At the same time the needs of the enterprise have changed, and the deals have become more complex. This convergence has exponentially increased the need for CPQ in Enterprise accounts.
2. Buyer Focused, Not Sales Focused – Buyers are engaging Sales much later in the buy cycle, and are much more educated about your products when they do finally engage with sales. Therefore, an enterprise CPQ solution must be optimized for the educated buyer and must be able to meet the buyer on his or her own terms (e.g. omni-channel).
3. Manage Business Outcomes, Not Processes – mass commodification has provided buyers with many choices and, as businesses struggle to differentiate through new products and services, they must also differentiate through price. This must all be done while protecting margins and creating incentives to buy and sell the latest products and services. Promotions, rebates and commissions are used to modify the behavior of customers, partners and reps (respectively), to align their buying/ selling efforts with the goals of the enterprise. Such complexity is driving the need for enterprise business to enable their sales reps with a modern Configure Price Quote solution.
4. Real-time Recommendations, Not Static Rules – Machine Learning enables real time decisions to be made by combining predictive analytics with business rules that optimizes the CPQ process (e.g. Cross-sell/Up-Sell, Pricing Intelligence, Quote Scoring).
5. Machine Entry, Not Manual Entry – In the fast-paced world we live in, logging onto your laptop to create a quote is no longer convenient nor fast enough to win deals. Modern CPQ solutions are automating and simplifying the quote creation and acceptance process with tools that minimize human interaction with the keyboard.