What is Salesforce CPQ and how does it work?
Posted by Seethu Maria Mathew
Your business has just started to bloom and is on the verge of closing a breakthrough deal. You have an ensemble team in place, but their jam-packed schedule coupled with manual dependencies makes you feel like you are walking on eggshells while creating that final quote. Ring a bell? You’re not alone! Research shows only 34% of a salesperson’s time will be spent on actual selling. All the remaining time will be spent on generating quotes, proposals, and gaining approvals. This problem has been lurking around for a while, but the truth is many sales leaders still don’t know how to address it the right way.
While CPQ was earlier overlooked in favor of other sales technology solutions, more and more organizations are now learning the value of a CPQ software in streamlining their sales process and nurturing client relationships. According to a report published by Accenture, 83% of sales professionals are now using a configure, price, quote (CPQ) solution for their operations, and no company can afford to fall behind the pack.
What is CPQ?
CPQ stands for configure, price, quote. It is a tool used for sales optimization while configuring complex products and creating quotes for customers. The CPQ software generates quotes quickly and is accessed by the sales team immediately based on the customer’s requirements.
Why CPQ software?
A lot of sales teams are bogged down with manual tasks surrounding spreadsheets when it comes to the final stages of their sales cycle. Instead of moving on to their next deal, they might waste hours chasing down contract approvals or trying to accurately price products.
Configure Price Quote (CPQ) is an amazing sales tool that helps companies to create precise and configured sales quotes for customers – we are talking about highly complex sales transactions here. CPQ gives sales reps and leaders full access to the data they need to speed up even the most complex quote. The CPQ tools are a sure shot solution to most of your challenges associated with customer relationship management.
With CPQ you can:
- Reduce order errors
- Reduce time for compiling complex contracts
- Free up quality time of Sales Representatives
- Grow revenue steadily
- Increase data visibility and accuracy
- Enhance customer experience
- Increase deal values
What is CPQ in Salesforce?
Salesforce CPQ is a configure price quote solution which is fully native to the Salesforce platform. It delivers automated sales quoting with out-of-the-box capabilities like Guided Selling and Pricing and Discount Schedules. But it’s not limited to this definition. It brings so much more functionality and flexibility to your sales team, no matter how complex the process is. It streamlines the entire quoting process, aligns all your disconnected internal teams and saves time while building accurate and timely quotes, all without leaving Salesforce.
How Does Salesforce CPQ Work?
Let’s take the example of an SMB enterprise that manufactures custom heavy trucks for their customers. The various teams that run the show would be an outside sales team that collects the requirements from the customers, an inside sales team which receives the information from the outside sales team who then coordinates with the design build and engineering team to configure the custom product and create an accurate quote in the given time frame.
Now when it comes to the manufacturing business that too in the automotive industry, the entire process is well.. chaotic. Numerous configurations, designs and models will create so much confusion in the back and forth process – whether it’s an engineer-to-order or a custom making process. The sales team needs so much more expertise in design and engineering to create a precise and timely quote!
This is where Salesforce CPQ shines like none other. Let’s see how Salesforce CPQ works through the entire process.
When a customer asks for a specific model, the outside sales team can quickly enter the information in real time in Salesforce CPQ using dynamic guided selling techniques infused in their smartphones. On receiving the information, the inside sales team now coordinates with the engineering and design team to start the production of the required truck model asked by the customer. They can configure and change the parts and accessories based on the requirements in the software. For example, if the customer asks to replace the base engine with an advanced one, the rep can update the configuration in the software. With CPQ, chances of the engineering team making errors are slim as they get the most accurate parameters to configure the product.
Salesforce CPQ provides multi layered discounting logic to accurately price the truck model selected by the customer. Salesforce CPQ’s discounting functionality gives sales reps the ability to use multiple tiers of discounts like volume discounts, distributor discounts, discretionary discounts and so on.
You can update the discount as well as the warranty information on Salesforce CPQ. Also you can update the discount expiration date which intimates the discounts time period. The deal financials run in real time to ensure the deal is acceptable for both parties. You can also view various deal finance scenarios, such as is it direct purchase or on lease or subscription ordering. After that, with the click of a button, it is sent to the approval team for approval of discounts.
After the discount is approved, the customer can review the quote to check terms and conditions before the final quote is created. For example, say the customer here would like to change the contract termination period from 30 to 90 days. They can mark those comments on the doc and send it back for approval. Once the quote is generated, it is sent to the customer for electronically signing the order and is immediately intimated to the internal sales rep, QA team, fulfillment team, sales management team via portals or communities. This drastically reduces the entire sales cycle leading to quicker decision-making at both ends.
Would you like to know more about Salesforce CPQ? Dazeworks would love to help you get the maximum out of Salesforce CPQ and turn your sales team into a sales powerhouse. It only takes one free consultation to get all your queries answered by our CPQ experts.