Top 5 Things to Consider when Selecting CPQ Software
B2B selling is getting more complex by the day. Sales teams are increasingly overwhelmed with large portfolios, complex product offerings, and bigger quotas, and they are struggling to deliver the fast and personalized experience that buyers are looking for. Sales technologies like CPQ (configure, price, quote) software change the game for organizations. It’s one of the reasons why analysts and advisory firms help direct potential buyers to CPQ providers best suited to meet their needs.
CPQ solutions provide a quote-to-cash platform that enables salespeople to perform all of the actions needed to get a quote into the hands of a customer quickly enough to matter in today’s sales environment. CPQ decisively changes the game for sales teams by giving them the functionality they need right from their Customer Relationship Management (CRM) tool. At its core, CPQ technology is all about automating the sales process, increasing the adoption and use of the CRM, boosting sales productivity, personalizing offer recommendations, and reducing error rates that can occur during the quoting process. A lot of benefits are packed into this one software platform. In an era where customers expect so much more – and so much more quickly– CPQ becomes essential to sales professionals who are under more pressure to deliver.
According to research from Gartner, the CPQ market is expected to increase 25% annually through 2020. This research makes it clear that business leaders are seeing the value and importance of adopting software to help accelerate sales teams in an ever-changing, complex digital economy.
So how do you know if CPQ software is the right solution for you? Let’s take a look at the top 10 signs you’ll see when it’s time to start looking at this game-changing technology.
Top 10 Signs You Need a CPQ Solution:
- It takes your sales teams days, even weeks to respond to a quote or RFP.
- Your sales teams struggle to find the right products for customers because you have over 50 products in your portfolio.
- The products you make are complex and require configuration. Many times, only the most seasoned reps can create accurate configurations of your products quickly.
- You sales team doesn’t do a good job cross-selling your customers.
- Your profitability isn’t where it needs to be because your sales teams over discount your products when they sell.
- If the same customer talks to two different sales rep, they will get two different product recommendations with different price quotes.
- The quotes you send to your customers sometimes have product or pricing errors.
- Only your sales person has the record of quotes which they have provided to customers on his/her laptop.
- Your sales teams is still sending quotes to customers in Excel.
- Customer can’t find or configure products they need themselves.
If one or more of these signs resonates with you, it’s time to start looking at CPQ software.
5 Factors to Consider When Selecting the Best CPQ Software for You
Unfortunately, selecting the right CPQ platform isn’t quite that simple. Not all CPQ options are the same. Selecting any old system could mean you will end up with the wrong one for your business.
Here are some of the differences and distinctions to watch for:
CPQ Architecture - Native or Hybrid
A CPQ solution with native architecture is purpose-built for a specific CRM and can’t be used with any other CRM system. Hybrid architecture CPQs, however, can work with any CRM or ERP solution.
With global enterprise businesses, it’s common for regional sales teams to use different CRM or ERP tools. Your sales teams in Europe may use Salesforce CRM while your Americas team uses Microsoft Dynamics 365. Pick the wrong CPQ, and you’re in trouble.
With a hybrid solution, you’re good to go no matter which CRM or ERP your teams use. Hybrid CPQ solutions eliminate the risk of having to reinvest and re-implement different platforms in different regions. No worries when it comes to sunk costs and time.
Configuration Engine Architecture – Rules or Constraints
The C in CPQ stands for configure, but configuration engines are not created equally. As you shop around for a CPQ software, you’ll hear the terms “rules-based configuration engine” and “constraints-based configuration engine.” Both have advantages and disadvantages.
If your company sells simple products, a rules-based engine is adequate - It’s simple and easy to write the rules in the CPQ administration tool. But, if you have products which require some level of configuration or if you’re planning on offering products in the future which will require configuration of the products or the products and services, you’ll want to go with a CPQ solution that has a constraints-based configuration engine.
Why? It’ll make the administration of your configuration rules so much simpler! The additional benefit of constraints-based configuration engines is they also can manage the configuration requirements for simple products.
Constraints-Based Configuration Example
To show you the power of a constraints-based configuration engine, let’s take this simple example to show how the writing of rules for a complex product can get out of hand.
You want to configure four pens that have only two components: the pen cap and the pen. You only want the same colored pen to have the same colored pen cap. With CPQ software that has a rules engine, you’ll need to write the rules as follows: red pen = red pen cap, black pen = black pen cap, and so on. With a constraints engine, you can replace these rules with one instruction: pen cap color = pen color! Imagine trying to write the configuration rules for a really complicated product like an excavator, which may have nested configurations (configuration within a configuration). You’ll need to write a lot of rules to ensure the wrong options don’t get configured together. Constraints-based configuration engines exist to reduce the amount of time spent writing your configuration rules.
Quoting Performance
Many CPQ tools can suffer from performance challenges that get worse as you add more products and services to the overall quote. In fact, some native CPQ software that are purpose-built for a specific CRM can only handle quotes of up to 2,500-line items. Some CPQ solutions will also experience a significant slowdown even when only managing quotes with more than 100 products.
When you begin researching which CPQ software you want to invest in, be sure to see a demo of a product that can support >1000 line items and check the responsiveness of the quote as you add more products. If it slows down significantly, it isn’t the right solution for you.
Make sure the CPQ solution doesn't throttle your sales team's output. Invest in a solution that can keep up with the scale, speed, and flexibility your sales teams need to put together and manage large quotes and RFPs.
Artificial Intelligence and Machine Learning
You may see a lot of CPQ solutions talk about integrating AI, but most of the time they only provide a snapshot of a point in time. What happens when your customer changes? What happens when the market changes? Can the AI solution learn to identify the differences and adapt? Be sure to invest in an AI-powered CPQ that also implements machine learning feedback so your recommendations don’t get stagnant and outdated over the long run.
(Bonus tip: Invest in AI-based solutions that are easy to understand and automatic to update! After all, we aren’t all ready to blindly trust computer systems, right?)
Omnichannel Collaboration
Many CPQ solutions today will claim they can integrate into eCommerce solutions to enable end buyers with the same capabilities the sales teams have. Before investing in any CPQ software, you need to understand the level of integration it provides. Does the CPQ limit the provision of certain capabilities to the eCommerce channel?
Also, as buyers are increasingly moving to eCommerce channels, you must understand the level of collaboration available between a buyer and a salesperson. Can salespeople see which products their buyers are configuring? Can reps modify the price of the items in the buyer’s basket and finish placing the order on behalf of the customer?
The need to collaborate across channels will become increasingly more critical, so get ahead today with a CPQ solution that can support cross-channel harmonization and collaboration today.
Choosing the Right CPQ Solutions for Your Business
CPQ solutions will enable you to transform and accelerate the quote-to-cash process for your organization, but they aren’t all created equally. Learn how PROS Smart CPQ increases sales effectiveness by accelerating responsiveness while infusing AI and machine learning to deliver personalized offers.
Check out this report from Gartner on why PROS is a leader.