A Guide to Better CPQ Sales-01

Welcome to Part One of our two-part “Guide to Better CPQ Sales,” where we will show you how to make CPQ your ticket to reduced sales cycles and a smoother, faster, and more productive sales process.

In this one, we head back to the basics, breaking down what CPQ actually means, how the CPQ product rules work, and why the best of CPQ sales solutions should be visual.

In the next one, we will dig a little deeper and explore how CPQ sorts the four biggest challenges facing VP’s of Sales and how to put CPQ within your enterprise.

Now’s the perfect time to embrace CPQ sales (as you will also find out in Part Two,) so get set for a superb ride!

CPQ- What is it?

CPQ is software that’s designed to help companies configure, price, and quote their products. With the automation of many time-consuming and error-oriented sales processes, CPQ reduces sales cycles and also eliminates the many engineering and manufacturing hurdles.

We can break down the entire integrated CPQ procedure into three stages:

Stage #1: Configure – Quick configuration of complex products.

Stage #2: Price – Quick calculation of dynamic prices.

Stage #3: Quote – Automated generation of sales and other related technical documents.

Let’s take a shot and have a look inside…

Stage #1: Configuration (and CPQ Sales Configurators)

Buyers today demand more customization, and manufacturers are taking the call. But offering an increasing number of customized options emphasizes sales complexity, and sales reps obviously cannot keep up.

When the product options amount in the hundreds or thousands, configuration processes break down if they are manual in nature. Human errors quickly start seeping in, and technically non-viable configurations become very common.

With CPQ, sales reps can configure the products with a “product configurator” rather than picking out the part numbers from a catalog. Programmed within the configurator’s backend are “product rules”– pieces of code determining how products are assembled, making non-viable configurations practically impossible.

Through a product configurator, sales reps don’t need to fret over whether one product option will actually be compatible with the other. They answer a number of calibrated questions, and then the software leads them to a perfect customer-specific selection within fractions of the standard time.

Stage #2: Pricing

CPQ calculates the prices for those products and bundles in real-time as the reps and customers choose from different product options. Rather than just deriving prices from static price lists, CPQ makes use of dynamic pricing–adjusting the prices automatically as per fluctuating market conditions and then the pricing strategy as well.

Sales reps are liberated from a load of cluttered Excel spreadsheets and legacy processes. Instead, they could focus on active selling and then leave the number-crunching to machines.

CPQ does all the heavy-lifting, but the reps are not bound by the CPQ prices–they can easily override them by using discounts, that can be approved with just a single click. Everyone gets access to workflows and even approval loops, keeping the entire sales team accountable.

Stage #3: Quoting

Sales reps now instantly generate quotes, proposals, estimates, Ts and Cs, and even marketing collateral without the need of the usual formatting issues. Responsiveness gets supercharged, leaving the buyers ecstatic with the pace of service.

Robust configure price quote solutions like KBMax are capable of creating much more than simple PDFs. CAD and design automation allows the reps to generate 3D product renderings and technical drawings. They can apply them to quotes without input from the engineering department, clearing the many engineering bottlenecks and reducing sales cycles.

In short, a CPQ quote has a high chance of conversion because…

• Products and bundles get configured to perfection and optimized for each customer’s technical needs.

• Prices get aligned with the fluctuating market conditions to get a boost in the win rate and more revenue without compromising margins.

• The document gets automatically generated, reducing the time to quote and reduction in the sales cycles.

How Do Product Rules Lead to Increased CPQ Sales?

A product configurator is absolutely nothing without the “product rules”- little bits of logic that drive the configuration processes, ensuring a lot of consistency design reliability. When properly structured, CPQ product rules will:

• Reduce manual error- Fewer delays, returns, chargebacks, and better customer retention and satisfaction.

• Simplifying the overall sales process- No more need of in-depth technical knowledge of your product catalog to create the right customer-specific selections.

• Make onboarding effortless- New hires are brought up-to-speed in a few days–they just follow the rules.

• Reduce the sales cycle- Product configuration gets supercharged, prices are calculated in real-time, and the quotes are also generated automatically.

• Clear out the engineering and manufacturing bottlenecks- No more rough sketches, communication breakdowns, and those countless back-and-forths. All the relevant product information gets captured by the reps up-front and then translated in a language everybody understands.

• Increased order values- “Guided selling” allows the sales rep to make added effort for upsells, cross-sells, and increased profitable deals

CPQ Sales Get Supercharged With “Visual” Assistance

Uncertainty, ambiguity, and information-overload are the factors that create cognitive dissonance in the minds of the buyers, stopping them from spending.

90% of all the information that’s transmitted to the brain is visual in nature. Images are processed 60,000 times faster than text. So, if you wish to gain buyers’ confidence and then reduce purchase anxiety, don’t explain why your products are actually for them; show them!

KBMax includes a visual product configurator than a run-of-the-mill text-based alternative. Instead of making ticks and using other filtering options, sales reps are presented with a 3D product image they can interact with in real-time.

A visual product configurator can also be used as a gated tool, side-by-side with a buyer, or (as discussed later) by customers themselves. Users can just drag, drop, point, and click to change the colors, dimensions, parts, and more, with the changes getting updated on-screen.

Visual product configuration gives a fully immersive experience, connecting the buyers to brands on a more intimate level, giving reps a complete visual understanding of the products they are selling. It’s a huge differentiator in a crowded space that enhances the overall customer experience to new levels.

Self-service CPQ sales and “embedding.”

The B2B buyer has changed now, demographically and psychologically.

A new range of Millennial B2B buyers has replaced the old ones. These digital natives are completely unaware of an internetless world and witnessed services like Amazon and Netflix setting the digital standard.

Millennials, the Zoomers hot in pursuit, and everyone else, are so used to dealing with the techology giants that they have now begun expecting an Amazon-level customer experience whether they are buying for themselves or even for work.

Buyers today want everything to be quick and easy. They don’t have the time to build an emotional connection with a sales rep during their regular working hours. They want to research their products independently and take a path to make a purchase at their own pace, on any device, from essentially anywhere.

With CPQ, companies can provide their buyers with the self-serve option.

Sales directors can effortlessly embed a visual product configurator into their B2B eCommerce website. Buyers get the liberty to configure the most technical products on their own. A process that took 20+ calls and emails are now completed without any kind of human interaction at all.

What does CPQ automation bring for sales reps?

Most sales reps will agree that a number of their day-to-day responsibilities are just perfect for automation. Much of their work is replicable, and reps would welcome this opportunity to shift their focus to more meaningful work.

CPQ can perform a number of sales tasks faster, better, and economically than any of the human sales rep ever could. But that doesn’t mean “fire the sales team.” Instead, let them focus on the more crucial revenue-generating activities while the software carries out the time-consuming and error-prone tasks that most of the reps hate doing anyway.

In the future, surely some of the sales jobs will be lost because of automation. But these jobs will be at the lower end of the story. Technology will create a number of well-paid and highly-skilled sales roles too.

The most effective reps will be those able to combine a firm understanding of advanced technology with their great interpersonal skills to give out results neither man nor machine could even think to achieve independently.

Join us in Second One of “A Guide to Better CPQ Sales,” where, among other fascinating insights, we’ll uncover the four biggest challenges facing VP’s of Sales today and how CPQ sales provide the solution.