October 5 by Steve Feyer
Selling is hard. It’s just phenomenally hard!
You can have the best product in your industry, but that may not matter if your selling process is too slow. Half of the time the first vendor to respond wins the business—not necessarily the best vendor.
Reps are paid to sell, but they only spend 22% of their time on average selling. The rest of the time they’re preparing to sell, traveling, chasing down approvals, on phone calls to discuss pricing and contract terms, and handling a hundred administrative details. With every other challenge they face, sales people barely even have the chance to do their jobs— it’s no wonder so many reps don’t meet their quotas.
Here at Dreamforce 2016 we see companies trying to move these numbers, and make selling a less-impossible job. Quote-to-Cash is a critical strategy to make selling better, yet many companies are trying to fill their Quote-to-Cash gap with a partial solution.
Quote-to-Cash has three distinct stages: configure price quote, contract management, and revenue management. Companies can capture benefits with any of these tools, but to gather the full benefits of Quote-to-Cash, they need to have contract management as part of their solution.
Why Contract Management Software is Vital
1. It’s when your prospect becomes your customer. Your prospect needs to agree to buy before you can generate revenue. With all the best funnel acceleration and CPQ optimization in the world, you still need a “yes” in writing—and failing to invest in yes will cause you to lose opportunities. A CPQ tool and a revenue management tool together won’t provide any additional joint value—they will just be two separate applications.
2. You can’t deal with exceptions. CPQ and revenue management processes standardize the routine tasks in Quote-to-Cash, but contracting is often negotiated, drawn out, and non-standard. As you get better at routine tasks, without contract management you’ll find that your agreements only get more difficult to manage unless you have the negotiation tools, legal playbooks, and high-integrity repository that full contract lifecycle management can provide. Document generation alone won’t cut it.
3. The contract defines your terms. Everything you’ve quoted, and everything you’re going to bill, are defined in your contract. If you invest in CPQ or revenue management, what are you doing with the information from these tools? Contracts define the terms you’ve agreed to, and contract management gives you the speed and control you need to handle the process improvements that CPQ and revenue management have enabled. If your contract management continues to be manual, you’ll just have a new bottleneck.
Trying to enable Quote-to-Cash without a capable contract management system is like driving a new car with only three wheels. It will start, and the windshield wipers will work—but you just won’t get very far.
Sales is easier with Quote-to-Cash, and contract management powers Quote-to-Cash solutions. So don’t try to skip a critical step, or you might find your brand new sales process in the breakdown lane before you can get anywhere.