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.
Summary: you should invest in CPQ if…
- Your reps send inaccurate quotes to customers
- Slow Sales Cycle
- Over-reliance on spreadsheets
- Confusing product catalog
- Low upsell numbers
- Over-discounting
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.
Need help with CPQ?
If you need a hand implementing CPQ for the first time—or are still uncertain if now is the right time—Iceberg can help. Our team of RevOps experts can partner with you to evaluate your current systems and help you decide if CPQ is right for you. If now is the time, Iceberg can help you make sure everything gets set up correctly from Day One.
FAQS About CPQ
What is CPQ Software?
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.
What is a Salesforce CPQ specialist?
A Salesforce CPQ specialist is a Salesforce expert who has not only been trained in CPQ implementation, but who also has real-world experience setting up, managing, and optimizing CPQ for a number of different organizations. “Specialist” is a bit of a catch-all term, but usually it’s a professional who can not only implement requirements, but who also understands the broader strategy behind CPQ implementation and how it affects a company’s entire revenue funnel.
How much does Salesforce CPQ cost?
Salesforce CPQ has 3 price ranges. Here is the monthly price when bought as a yearly subscription; CPQ ($75/month per user) , CPQ+ ($150/ month per user), CPQ Billing + Growth (contact for quote), CPQ + With Billing (contact for a quote).
What is Oracle CPQ?
Oracle CPQ is a cloud-based application much like Salesforce CPQ that also allows users to configure products or services with discounts, volume pricing, upsells etc to create accurate quotes and invoices.
How do I Set Up CPQ?
CPQ software is notoriously difficult to set up and manage, and many sales leaders are still recovering from disastrous implementations. The best way to set up, manage, and optimize your company’s CPQ, especially for resource-strapped sales departments, is to invest in professional help. Finding the right CPQ implementation partner means your sales team can get on with their jobs, you stop firefighting, and someone else takes care not only of strategic planning, but the technical implementations to fit your businesses’ needs.
We’re happy to leverage our decades of experience in Sales Operations to help you and your team leverage the power of CPQ – contact us today for more information.
Keep Reading & Improving Your RevOps Knowledge
Leveling Up: Designing a Customer-Focused Sales Strategy for Next-Stage Growth
In the span of the last two decades, the dynamic between sellers and buyers has experienced a seismic shift. Initially, sales were all about the product, with a spotlight firmly trained on its many features and benefits.
Continue Reading Leveling Up: Designing a Customer-Focused Sales Strategy for Next-Stage Growth
The RevOps-Approved Product-Led Growth Stack
What you really need to create a lean, effective product-led growth stack. Approved by RevOps specialists.
Continue Reading The RevOps-Approved Product-Led Growth Stack
Hit Turbo on Your PLG Sales Motion: a 4-Point Action Plan
The magic of a product-led sales strategy happens at the top of the funnel. Have meaningful conversations earlier in the sales cycle with this plan.
Continue Reading Hit Turbo on Your PLG Sales Motion: a 4-Point Action Plan
The Benefits of PLG: why more B2B Companies are embracing it
Lower CAC, better churn prediction models, a more efficient sales team….the benefits of PLG for B2B are hard to ignore, but is your company ready?
Continue Reading The Benefits of PLG: why more B2B Companies are embracing it
