Understanding the limitations in a manual quoting process or legacy CPQ solution can help you and your team identify opportunities to streamline processes, reduce overhead costs, upskill sales staff, and improve the customer experience.
Below are key capabilities you should be looking for in a modern CPQ solution:
Generate complex quotes
Modern selling requires the flexibility to build out-of-the-box deal structures—creative quotes that will serve as win-win deals for your business and the customer. A modern CPQ enables sales reps to easily and independently create the deals customers want, from simple, annual subscriptions to more complex ramp-up engagements. Reps should be able to define custom terms for every customer, including defining billing cycles (e.g., yearly), payment terms (e.g., net 30), PO number requirements, auto-renewals, and more.
With a best-in-class CPQ, there should be no need to solicit help from the deal desk to create a quote for a prospective customer, meaning time and resources saved and proposals delivered to prospects fast.
Enable dynamic configurations
Companies with large and complex product offerings often struggle with the configuration of pricing quotes. Through rules-based logic, a modern CPQ solution should ensure that the product SKUs and bundles you’re offering are actually available and compatible, which reduces the chance of errors and omissions.
Additionally, a modern CPQ may be able to leverage AI and proactively recommend supplemental services, products, and discounts, making it easier for sales reps to design deals that meet customer needs and maximize revenue.
The sooner a customer can get up and running, the faster their business can move and thrive. Leading CPQs are quick and easy to set up and implement, and they don’t require a developer to write custom code. This means that sales operations can install and configure your system without disrupting their team and be live in weeks rather than years for faster time to value.
Simplify onboarding and usage
The purpose of a CPQ is to make the overall sales process faster and more efficient. In order to achieve this, it needs to be easy to use and intuitive, just like any modern web application, and ideally requires little to no user training. A CPQ with a straightforward user interface and user-friendly controls can make the transition from a manual or legacy setup much more seamless. With a CPQ that is simple to work with, sales reps should be able to create complex quotes in just a few minutes, without having to wait on outside support from a deal desk.
“The top criteria in a CPQ is having a clear user interface that is super easy for anyone to use,” said Tom Murtaugh, SVP of Global Business Operations at BigID. “My gold standard is Amazon. Anyone can easily buy something on Amazon and check out. If the CPQ UI is as easy and simple as an Amazon checkout experience, then my sales team can actually use it.”
Create a scalable foundation
As your business continues to grow and change, you’ll need your CPQ to be flexible enough to meet the needs of your business now and in the future. As a company matures from startup to enterprise, it’s likely that the sales process evolves from fairly simple to more complex, with added sales channels, partners, markets, currencies, and more.
Best-in-class CPQs that are purpose-built for fast-growing companies can adapt to changing priorities and scale easily without having to reinvent the wheel.
Streamline approval workflows
A good CPQ solution makes the approval process quick, automated, and transparent, allowing administrators to create custom approval workflows, groups, previews, and notifications. A business’s organizational structure should also be easily imported into the CPQ, allowing it to understand who each sales rep’s manager is.
For example, you may want to create an approval workflow that requires sales manager approval when a quote generated by a sales rep includes a discount that exceeds 20% and CRO approval when discounts exceed 40%. Each stakeholder whose approval is required would be notified automatically, based on your business’s unique set of rules.
Once rule-based logic has been established in the system, quotes can be expedited through the approval process in an automated way, without getting hung up at different points along the approval hierarchy. With a more streamlined approval workflow, sales reps can get quotes out to prospects faster, leading to higher likelihood of close.
“The ability to track approvals and having that built into a system and auto-routed is an incredibly important feature to have,” explained Amy Lin, Head of Revenue Operations at ngrok. “I’ve been in situations where there was no approval process or easy way to track approvals. We had a case where we created the order form, the customer signed it, and when it came back, our CEO said, ‘I didn’t approve this. How did this get approved?’ So we had to change the order form, recreate it, and send it back to the customer who had to sign it twice in a week. We were going back and forth in a Slack chain with close to 100 messages across six different people in the organization. This would have been a lot easier and faster if we had a CPQ to track formal approvals.”
Increase pricing agility
A modern CPQ enables users to easily update sales agreements with upsells, cross-sells, and renewals, and amend orders without having to manually calculate product pricing every time there’s a change. Instead, sales reps can keep up with changing market conditions and adjust prices accordingly, getting updated proposals out to customers quickly and without hassle.
Control multi-level discounting
Sales organizations often face challenges in the effective management of pricing and discounting, especially when these rules and policies are not documented or process-driven. A robust CPQ drives effective pricing and discount management at the order, product, and line levels. By implementing pricing controls, sales teams can control arbitrary discounting and ensure price compliance and consistency.
Gain visibility into sales performance
A modern CPQ should be able to provide detailed analytics and full data visibility into metrics like annual contract value (ACV), annual recurring revenue (ARR), and total contract value (TCV). Having a view into this data radically simplifies reporting, eliminating any silos, confusion, or hassle.
Integrate seamlessly with your CRM and ERP
Any CPQ you implement must be able to connect with your existing CRM and ERP systems, allowing you to pull opportunity and sales data while generating a quote, and pushing closed deal information for your finance department to invoice and collect payment. How seamless these integrations are, however, may differ between CPQ vendors. While some CPQs require heavy customization to connect systems, modern CPQs can provide a more unified approach, with both quoting and billing systems in a single platform. With a unified platform, all of your quoting and billing data live in the same place, meaning product and pricing information aren’t duplicated in separate systems, cutting down on data inconsistencies and eliminating the tedious work of keeping those two systems in sync.
This blog post is an excerpt from our eBook "The Definitive CPQ Buyer's Guide for SaaS." To read more, download the full guide here.