When’s the Right Time to Extend Your CRM with CPQ?

Your business is growing, and your technology needs are growing alongside it. You already have a Customer Relationship Management (CRM) platform in place to facilitate your sales operations, but some days it feels like you’ve outgrown your CRM’s current capabilities. Perhaps someone has told you that you should extend your CRM by adding Configure, Price, Quote (CPQ).

And now you’re wondering: Do I need CPQ? 

Investing in the right software systems at the right times to support your sales ops can make a big difference in your speed to success. But you don’t need every tool out there, and CPQ isn’t right for everyone. Let’s explore which factors to consider when deciding if now is the right time to invest in CPQ.

What is CPQ?

CPQ is a type of software that enables sales reps to auto-generate accurate order quotes. In essence, CPQ technology transfers the most critical aspects of a sales cycle from spreadsheets to an automated sales tool. As an add-on to CRM software, it extends CRM functionality in a way that makes it possible for reps to quickly create complex quotes or order forms free from human error. 

Complex, in this context, means that there are multiple (often layered or interdependent) rules and required approvals. A well-implemented CPQ tool allows reps to navigate this complexity quickly and easily through an intuitive, wizard-style user interface that navigates the logic for them. In essence, CPQ simplifies, expedites, and organizes the sales process. 
Salesforce is currently a market leader in the CPQ product space. Salesforce CPQ assists reps with selling appropriate product combinations, regulating discounts, and automating approvals. If you’re considering using CPQ in your sales process for the first time, Salesforce is generally a safe bet. Alternative options include Oracle CPQ, Zuora CPQ, SAP CPQ, and many more.

What types of insights are possible with CPQ?

CPQ reports enable you to answer several important questions that are typically difficult (or even impossible) to answer without them. For example:

Discounts 

CPQ can tell you how much you’re discounting your prices on average. For example, with Salesforce CPQ you can view your discount numbers broken out by nearly any type of data stored on the account, opportunity, product, or quote objects. This includes average price discounts by key factors like:

• Product
• Sales rep
• Region

Contracts

Wondering how many contracts are currently awaiting approval, and from whom? CPQ can tell you that as well. This keeps deals from languishing in the contract stage.

Product performance

With CPQ, you can also gain valuable insight into your best selling products. For example, CPQ can tell you what your best selling product is based on either revenue or volume sold, helping your team sell smarter.

How can you tell if it’s time for CPQ?

Wondering if now is the right time to invest in CPQ? Here are some of the top signs you may be ready to add CPQ to your sales ops tech stack:

Inaccurate quotes 

Are your reps sending inaccurate quotes out to customers? If your existing software systems aren’t enabling your team to produce accurate quotes, they’re no longer serving your business.

CPQ can help you start quoting accurately.

Slow sales cycle 

Does it seem like your sales cycle is more sluggish than it should be? If your current quoting process requires manual inputs and approvals at the end of each sale, the lack of automation is slowing you down. CPQ can speed up your quoting process.

Over-reliance on spreadsheets 

Are you still slogging through spreadsheet data? If you rely heavily on spreadsheets and legacy systems for understanding your revenue data, you’re not using the most efficient systems. CPQ can give you better insights in less time.

Confusing product catalog 

Are your product offerings inconsistent or unclear? If you have a large product catalog and inconsistent pricing, it’s best to clean up your catalog before it snowballs into an even bigger mess. CPQ can help you get consistent on pricing.

Low upsell numbers 

Do your reps struggle with upsells and cross-sells?

If your team finds it challenging to build cross-sell and upsell opportunities, it’s time to stop letting this additional revenue fall through the cracks. CPQ can help you identify upsell and cross-sell opportunities by surfacing suggested combinations of products and making quote creation faster and easier.

Over-discounting 

Are you losing revenue because your reps are over-discounting your products in their efforts to make a sale? CPQ can help you track how much discounting is happening and even prevent unnecessary discounting by setting discount approval thresholds.

When should you not use CPQ?

You’ve heard the proverbial saying: If it ain’t broke, don’t fix it. If you’re considering investing in CPQ, make sure you compare the expected benefits to the cost. Can you confidently expect a good return on your investment?

The cost of implementing CPQ is more than just licensing fees. In fact, a quality implementation often costs significantly more than the first year’s licenses. Getting it right takes buy-in from your team, implementation time and expertise, input from relevant stakeholders, and user effort to learn a more complex system. And, if you get it wrong at the start, you’ll be paying an additional cost to clean up your mess later.

There’s no point investing in Salesforce CPQ, or any other CPQ product, if you truly don’t need it (at least not yet). If you have a small product catalog, reasonably consistent pricing and discounting, and your reps are usually able to quickly generate accurate quotes, you’re probably doing just fine without CPQ.

FAQS About CPQ