The solution is CPQ applications - the abbreviation stands for "Configure, Price, Quote". They guide sales staff safely through the quotation process. The main functions are:
- Workflow-based quotation generation
- Selection and configuration of components and products
- Pricing, taking into account customer-specific discounts
- Options for up-and cross-selling offers
- Collaboration functions, for example, for the internal release of offers
- Creation and negotiation of offers
These applications thus make a decisive contribution to:
- Shorten the sales cycle
- Optimize operational efficiency
- Protect margins
- Avoid uncontrolled discounts
- Increase volume per offer
- Improve customer experience and loyalty.
Read our free whitepaper „Configure Price Quote – how to master even very complex offers in B2B commerce“.
When implementing such CPQ solutions, you should avoid some hurdles. We provide an overview with the necessary recommendations for action.
1. No integration of sales and product management
The lead-to-cash process has long since affected sales and many other departments in the company. So be sure to involve representatives from all departments involved in processing orders - not just marketing and product management, but also the finance and legal departments. Let the experiences and wishes of the employees of these departments flow into your CPQ project.
2. No analysis of the existing lead-to-cash process
In every company, some things run well and things that need improvement. Take the time to analyze the operations of your lead-to-cash process. While you're at it, think about the related processes in all departments. In this way, you will learn what you can implement 1:1 in the CPQ application and which procedures you should optimize as part of the CPQ implementation. After all, a suboptimal process will not become better just because you map it in your CPQ application.
3. Selecting CPQ software is only for the as-is state
In the context of Digital Transformation, retail is also undergoing rapid change. Indeed your company has developed a strategy for the future - for example, special services such as consumption-based billing or subscriptions for consumables should be offered. You may also be planning to allow your customers to create quotes independently. Your CPQ software should be able to map all your plans.
4. Functionality before usability and performance
Of course, the CPQ application should offer a wide range of functions, no question. But this is of no use if the functionality is at the expense of usability and performance. Modern applications, this is generally true, must be arranged and designed with the highest ease of use.
5. Too many individual customizations
There are cherished ways of working in every company, but they are often temporary solutions and not always the most efficient approach. It is too tempting to implement such methods in new software (often, new applications are also rejected by the team because familiar methods cannot be implemented 1:1. However, such individual adaptations are usually costly in development and can also have a detrimental effect on support or update processes.
Therefore, remain as consistent as possible when the request for customization is brought to you. Examine the process in question and how it can be mapped in the CPQ application. This way, you will determine the absolute need for the desired adaptation. However, don't forget that employees are often attached to such processes - so proceed with the necessary empathy.
6. From CRM and ERP to CLM - no attention to upstream and downstream systems
A CPQ application is not an isolated solution. Leads are usually developed in the CRM system. Other essential allies of a CPQ solution are your ERP system and applications for Product Information Management (PIM) and Digital Asset Management (DAM). Downstream systems include those for contract lifecycle management (CLM).
Make sure that your new CPQ system not only offers the necessary openness for integration with your existing applications but is also future-proof thanks to the appropriate architecture - so that you don't find yourself at a dead-end at some point.
7. Poor data quality in CRM, ERP, or PIM
The CPQ application will quickly become the "single point of truth" for the sales team. It would therefore be fatal if upstream systems such as CRM or ERP were to pass faulty or incomplete data to the CPQ software - its efficiency potential could then not be fully developed (it is not without reason that it is said that data quality should be a matter for the boss).
Therefore, if you have not already done so, develop a strategy to ensure data quality and processes for cleansing the data inventory. This is mainly about the uniqueness, correctness, completeness, and up-to-dateness of the data.
This will benefit your CPQ implementation and the work in all other systems of your company.
8. No concept for the successful control of your CPQ initiative
As with any introduction of new software, it is essential to analyze what it brings to CPQ applications and whether it is worthwhile. Therefore, define criteria with which you can measure the success of your CPQ initiative. Appropriate KPIs could be, for example, the time from request to dispatch of the quotation to the customer, the rate of incorrect citations, the development of the volume per quotation, or the improvement in cash flow.
If you avoid these eight pitfalls, nothing should stand in the way of the success of your CPQ initiative. By doing so, you'll significantly reduce the burden on your sales reps to create quotes, so they can get back to their primary task - conducting conversations with existing or new customers to realize revenue. Read our free whitepaper to learn about the latest trends in CPQ and how to find the right CPQ software.