Today you’ll get an in-depth understanding of a tool that can make your sales process more efficient, leading to more deals and higher customer satisfaction.
A B2B sales cycle typically has:
Lead generation → qualifying → sales presentations/demos → closing.
The goal is to offer and sell a solution to your potential customer’s pain point — but what if that alone brings a new pain point to your business?
Here’s what I mean:
Many companies are still using outdated spreadsheets and PDFs to list their products and prices for reps. When it’s time for reps to offer a solution to prospects, they have to figure out what the customer needs, add up the pricing correctly, create a quote to send off, AND sell the solution.
And that’s just for ONE customer.
This is a scaling, time, and efficiency nightmare for small to medium-sized businesses.
So, this is where using CPQ comes in!
Today we’ll explore:
- How Traditional Price Quoting Works
- What Is CPQ?
- Why Is Using CPQ Beneficial?
- Who Uses CPQ?
- CPQ Implementation: 3 Effective Features Of A CPQ System
- Is CPQ Part Of CRM?
- A CRM That Works In Harmony With CPQ
The Roadblocks Of Traditional Price Quoting
Traditional price quoting is known to be a manual process.
After some lead generation, qualifying, and a sales presentation, a sales rep must be vigilant in sending a quote while still dealing with things outside their control (like a product feature approval).
Depending on the company’s size, an approval process can potentially delay a deal by many days.
Even after the approvals, the rep has to create a quote (with no errors), send it off to the lead, and potentially do some additional selling.
There are several issues with this traditional method of selling:
- It creates a longer sales cycle, which lessens the likelihood of a deal closing.
- It’s not scalable because it’s very manual, and having more prospects will only complicate things further.
- It’s prone to errors – data entry errors, forgetfulness.
So what’s a small business to do?
What Is CPQ?
CPQ is a technology that houses company prices and products, allowing you to create customized solutions to customer needs.
This means you’re able to bundle your products and services together to meet the exact unique needs of your prospect.
It’s excellent for companies with complex pricing structures that rely on certain variables.
CPQ is an acronym that stands for:
Each part of CPQ has a vital function, and these get carried out with a CPQ system.
CPQ is an exceptional way of meeting each customer’s needs without sacrificing company efficiency.
What Is The CPQ Process?: Applying CPQ To Your Business
Let’s dig into each part of the process.
In this first stage, sales reps have asked the prospect important information about their issues, and it’s time for the rep to find the best solution for the customer.
With a CPQ system, the rep answers questions given by the system, and the system shows the products and services that best match the customer’s needs.
The sales manager or business owner usually sets the services or products listed. And it’s the rep’s job to formulate any extra quantities of the product or service.
Here’s an example of configuring when using VipeCloud’s CPQ feature “Estimates,” which helps you add your products or services and configure your deals fast.
The second stage of CPQ deals with listing the price of your total service.
This includes discounts and taxes that need to be present in the deal.
What makes CPQ great is that your discounts can be set ahead of time which saves reps the effort of asking if specific discounts can be applied.
Not a math wiz? That’s fine because the pricing portion streamlines everything you have to add up and prevents any human errors.
Once your price is set, your CPQ system allows you to send your service quote to the prospect automatically in this last stage.
This is typically done through email — and you get notified if the prospect viewed and/or accepted your quote.
You’ll be able to see all your quotes all in one place.
Here’s an example with VipeCloud’s Estimates:
With a CPQ system, there’s no need for convoluted spreadsheets, ancient word documents, and even password-protected PDFs.
What do you get instead?
Why Is Using CPQ Beneficial?
Faster Sales, And More Deal Opportunities
With CPQ, reps sell more products faster, which opens them up to take on more leads. (This is especially important if you have a small sales team like most SMBs.)
Sales reps no longer have to worry about all the nuts and bolts of creating a quote correctly because the system already does that.
This gets even more interesting:
Sales managers or company owners can add or remove company products and change prices in a way that applies to the quotes in real-time.
This creates a repeatable (and scalable) process of creating quotes on the rep’s side of things.
With configuring, pricing, and quotes done faster, deals are more likely to close, and reps have more time to speak to other prospects!
Your reps will spend less time with data entry, unlike 71% of sales reps who say they spend too much time on it.
Shortens Your Sales Cycle
Sales cycle lengths usually differ across industries.
But the bottom line is that you want to learn more on the shorter side.
CPQ can help you cut the time between sales presentations and closes, thus helping shorten your sales cycle length. (Which is essential since there are usually multiple meetings before a deal is closed).
Accurate pricing and quotes
As a small or medium-sized business, the last thing you need is accounting errors.
Especially those that have the potential to cut into the bottom line.
Humans aren’t perfect, so when a rep manually creates pricing quotes, there could be some mistakes along the way (like undercharging or overcharging).
With CPQ, there’s no chance of profit losses due to miscalculations on the system’s part.
If a sales manager or company owner makes a pricing mistake, they can fix it just once, and the rest of your deals will take on that update.
Better Customer Satisfaction
84% of companies that make efforts to improve the customer experience see a spike in revenue.
Want to know a secret?
Customers love speed.
Just look at Amazon and how wildly successful their 1-day delivery model is.
Customers get more value from that than other eCommerce companies that have 2-3 week delivery times. This value proposition makes Amazon almost impossible to compete with.
CPQ lets you deliver pricing fast when it comes to your business, giving your prospect a great customer experience, whether they buy now, later, or not at all.
Contrast this with your competitor whose sales reps use the old-fashioned way of creating quotes, and you’re ahead in the race!
Who Uses CPQ Software?
Businesses With A Customizable Product Line
A great example of a customizable product line is a marketing agency that does multiple services for multiple niches.
Say there’s an agency that does email marketing, Facebook ads, SEO, and Google ads.
In this scenario, they have two potential clients: a lawyer and an eCommerce store owner.
You can imagine that these two clients will require drastically different solutions.
The lawyer would get better results with search-based marketing (Google ads), but the online eCom store would do better in disruptive-based marketing — Facebook ads and nurturing avenues like email marketing.
With CPQ, the marketing agency can add the needed services, create a quote with the intended services and send it off to their potential customers quickly.
Businesses Sending Quotes To Multiple Locations
Let’s say a distribution company is selling products bought from manufacturers to retailers.
As the middleman, the distribution company has to have their pricing correct to give multiple retailers a price based on volume and other variables.
This will FOR SURE require CPQ due to all the moving parts and sheer volume.
(Just imagine an employee of the distribution company tallying up order prices with a pen. That’s a recipe for trouble.)
Businesses That Need To Calculate Prices Fast
Let’s say a small business car detailing shop gets a call from a potential customer.
This person is looking for a quote for his specific car modifications. With CPQ, the shop person can give the customer a price within minutes by entering the customer’s needs into the system.
After everything is entered, the shop employee can tell them the total and send them a quote.
The shop can send repeat customers quotes even faster because their data is already in the CRM, which syncs with the CPQ.
This is known as “auto-filling” from opportunities, one of the most effective use-cases of CPQ.
CPQ Implementation: 3 Effective Features Of A CPQ System
When looking for a CPQ system, you want certain features that bring ease and important functionality.
1. Auto-Filling From Your Opportunities
In a CPQ application, this feature makes things a lot easier as far as data entry. CPQ will automatically populate the prospect’s information based on the information you have of them in your CRM.
This is a great way for reps to break the monotony and tediousness of entering data.
2. Financial Software Integration (Quickbooks)
Integrating your accounting software with CRM is another fantastic way of reducing data entry.
With VipeCloud, you can easily sync your QuickBooks account with our CRM!
Once synced, business owners or sales managers can import contacts and products from QuickBooks into VipeCloud.
Any updates made to contacts, products, and estimates in QuickBooks can be sent to VipeCloud, as well as customer payments.
Having a feature like this will come in handy as you have repeat customers and your customer base continues to grow.
When choosing a CPQ system, trackability is huge because it tells you how your prospect or customer is engaging (if at all) with your quote.
CPQ tracking includes opens, accepting, or rejecting the quote.
If you notice that the quote was opened a couple of days ago but not accepted, you can follow up with the prospect and see if they have questions or need help with anything.
Is CPQ Part Of CRM?
Yes, but a bit indirectly.
CPQ is a tool that’s part of your CRM, almost like a “cousin”:
It has a specific function which deals with sending pricing information, making it a tool in the CRM ecosystem.
In a sense, you’re still managing relationships with customers because you’re interacting with them and solving requests in a streamlined way.
A good example of how it works in tandem with CRM is syncing data like Quickbooks and contact information from your CRM…
…speaking of data, it’s important for decision-makers to make sure data in the CPQ is up-to-date.
That means the specific products or services you’re offering have “today’s pricing.”
Say you’re promoting a holiday deal that gives a discount, and you have a wave of people clamoring for your product.
If you have bad data, i.e., outdated pricing on your CPQ, when your reps go to send quotes, potential customers won’t be getting what was promised (a discount).
This is an easy fix on the bright side since updating the price will sync with all your quotes.
But nevertheless, it’s still a slow down you want to avoid.
Moral of the story?
Keep CPQ data as accurate as possible.
A CRM That Works In Harmony With CPQ
CPQ helps you remove sales growing pains, automate your bottom-of-funnel parts, and increase customer satisfaction.
Even if your business doesn’t have complex pricing in place, CPQ is one of the best ways of giving a solid first impression to prospects based on how speedy you are at delivering what they want (the price).
VipeCloud’s Estimates is a robust CPQ tool that helps you streamline your quotes, see them all in one place and follow up when needed.
Ready to get started? Try VipeCloud’s Sales CRM free for 15-days.
If you have questions about VipeCloud’s Estimates, we’ll give you a demo!