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CPQ has been around for decades despite being a hot term of late, but some people still wonder what it actually is. Is it a piece of over-hyped software that’ll be forgotten in ten minutes? Does it replace my sales team?
CPQ is an acronym for Configure, Price Quote (CPQ). And while yes, this is another acronym for us to keep track of, this is one you’ll grow to love if you’re looking to streamline your B2B customer journeys. And while it is essentially a piece of software, it has become much more than that, thanks in part to the global power and omnipresence of The Cloud. This software – in fact, this strategy – can now be applied at unprecedented scale and speed to bring modernization and automation benefits to what oftentimes is a very antiquated, laborious, and error-prone sales process.
If your organization is actively looking for ways to achieve digital transformation in a B2B environment, a sound CPQ strategy can greatly reduce your customer journey, increase secondary and tertiary sales, and free up your sales team to focus on their namesake occupation through modernization of your existing digital commerce strategy.
Great, now we know what CPQ stands for, and have a general understanding of how it works. Let’s dive down into greater detail and see some real-world examples of CPQ in action.
Let’s say you manufacture bicycles – and you then sell those bicycles to your clients who in turn sell them to the public. A bicycle is a highly-configurable product with historically thin margins, compounded by the added headache of being an ever-evolving product in and of itself as new technologies – and customer preferences – emerge. Sure, the core technology is the same: a frame, pedals, seat, handlebars, etc… but those are all being made out of new materials, being tasked to new applications, and so forth.
The very nature of the product you are selling requires a complex and ever-changing set of rules to define:
Now suppose your #1 customer, who sells your bikes retail, chooses a certain frameset, but then wants to maybe swap a seat from one build to another, you are suddenly faced with multiple dilemmas:
So to avoid those pitfalls, how can your salesperson enter into such a meeting pre-armed with the information they need to give an updated quote to your largest customer? Right there, on the spot, in the field, in real-time? CPQ gives them that power.
At its core, this is the type of problem that CPQ solves, but at a much greater scale, and on a much shorter timeline. Through rules-based logic, a truly adaptive CPQ solution allows you to create as complex a configurator for your product line as you need, going a step further by recommending supplemental services, products, training, and discounts – things even the best salesperson with the best sales process may overlook at times. With CPQ, you can instantly reconfigure your customer’s order based on this new request, and new pricing will be created dynamically, with a new quote generated right there on the spot.
With CPQ in your sales arsenal, your sales team is empowered to embrace customization requests from clients, without the overhanging fear of pulling all-nighters to make it all “work”.
Now let’s take CPQ one step further, out of the virtual showroom and into the sales process proper. When you consider the “traditional” way in which preparing a quote is done, you think of a multi-step process, something like:
Sound about right? Sadly, this is what many sales professionals spend a downright shameful percentage of their day doing – creating quotes. With CPQ, you can streamline the sales process and therefore free up your salespeople to focus on selling, not data-entry, fact-checking, inter-departmental discourse, and graphic design. Just focus on the relationship and how to offer the best value to your customers and in turn increase your revenue. It’s a deceptively simple win that contains a huge amount of potential for organizations of all sizes.
We’ve talked about the headaches you’ll save your customers and your sales teams, and while those are good, let’s think about those benefits in real terms, terms that your accounting and digital commerce teams will love.
Just looking at the most basic – and obvious – resource – time – we can extrapolate that into actual savings based on the axiom that “time is money”. Because, after all, it is.
If you have a sales team of say 15 people, and on average, they spend 50% of their time
One study conducted by Salesforce puts this figure at 66%, but for the sake of this discussion, let’s just say your organization is slightly more efficient than average.
Time you pay for – on the above-listed activities that are ancillary to the actual act of selling, activities that can be automated behind the scenes and still preserve the relationship between your sales team (read: your organization) and your most prized customers, that’s a huge number. If you pay, on average, $100,000 per year, that’s $1.5MM, and 50% of that is money spent on something other than their actual job description. What could your organization do with an extra $750,000USD per year? Now compound that figure by what your sales team can accomplish with twice the time devoted to sales?
Again, these are just the tangible costs. We haven’t even discussed the intangibles that can erode your bottom line, such as lost sales due to:
These are the “hidden” costs that rarely show up in an annual report, but quietly contribute to the erosion of your sales programs, and can also severely impact the effectiveness of your sales professionals, professionals who are always in demand and may be inclined to look for an organization that has a better sales support structure in place. Sales professionals, let’s not forget, take their relationships with them.
So we have a good understanding of what CPQ does, how it works, and what sort of clearly visual and sinisterly hidden pitfalls it can help your organization avoid. The question then becomes:
Obviously, and we might be a little biased here, the best way is to partner with an organization that fully understands the CPQ process, and has a proven track record of deploying successful digital modernization solutions for organizations large and small. ArganoKeste understands how to implement a scalable CPQ solution – we partner with industry-standard providers such as Oracle and Salesforce – to set up your CPQ solution for success.
We can implement a solution that will seamlessly bridge the gap between your CRM platform and your existing Enterprise Resource Planning (ERP) provider, thus freeing up untold resources that you can reallocate towards increased sales, growth, efficiency, etc.
Here at Argano, we live and breathe digital commerce transformation, and our strategies have been proven time and again in real-world applications, providing real, tangible value to our partners.
If you’d like to see how Argano can help your organization achieve its digital transformation goals, contact us to learn more.
A subject matter expert will reach out to you within 24 hours.