Welcome to Part Two of our two-part “Definitive Guide to CPQ Sales,” in which we show you how to make CPQ your ticket to shorter sales cycles and a simpler, faster, more productive sales process.
If you haven’t read Part One, you might want to take a look. We go back to basics, breaking down precisely what CPQ means, how CPQ product rules work, and why the best CPQ sales solutions have to be visual.
Now’s the ideal time to embrace CPQ sales (as you’ll find out) so buckle up and enjoy the ride!
How CPQ Can Solve The Top 4 Challenges Facing VP’s of Sales
Challenge #1: Long and unpredictable sales cycles
Having a shorter sales cycle is a huge competitive advantage in a world of instant gratification.
Sales teams can get more deals moving through the sales pipeline, increasing revenue over any given period. Meanwhile, buyers working under immense time pressure can get deals done quickly and tackle other pressing matters.
Top 10 Reasons to Choose Epicor CPQ
This quick-reading download walks you through the top 10 reasons that customers choose us for their CPQ. From our 2D/3D visualization and robust rules engine technology to our great people, learn about the qualities that make Epicor CPQ used and loved by over 10,000 customers globally.
If you can’t respond to requests for quotes and proposals lightning-fast and do deals without delays and inconsistencies, buyers will take their business elsewhere. A short sales cycle is integral to providing a superior customer experience that increases win rate and retention.
The CPQ Sales Solution:
- Simplified configuration, pricing, and selling activities
- Streamlined workflows and approvals
- CAD and design automation to clear bottlenecks
Challenge #2: Sales teams not meeting quotas
Sales reps are supposed to be selling. But they’re not.
The average rep spends just 34% of their time on revenue-generating activities. The rest is spent producing quotes, creating proposals, waiting on engineering input, gaining approvals, and other mundane and repetitive busywork that kills efficiency and morale.
Such reliance on manual sales processes means that the only way to respond to increased demand is to hire new reps, which is costly and un-scalable. Investing in technology is a better option…
The CPQ Sales Solution:
- Automation of the most time-consuming sales tasks
- Streamlining of deal approval workflow
- Instant access to product and customer data
- A single source of truth for sales
- Rapid onboarding of new hires
- Scalable software that increases deal execution, not the wage bill
Challenge #3: Too many errors and bottlenecks
Your buyers want customization, but providing more product options means more parts, complexity, and more mistakes. It’s unrealistic to expect sales reps to learn a vast product catalog along with all your complicated rules and dependencies.
Technically nonviable configurations are a huge pain point for manufacturers, stopping the sales cycle dead in its tracks. It’s all very well encouraging reps to crank out more proposals, but not if mistakes are causing engineering bottlenecks downstream.
Human error is inherent in any manual sales process, especially where legacy systems are involved. If you’re trying to use an Excel spreadsheet as quoting software–forget about it; delays, returns, and chargebacks are inevitable.
Rather than train reps to memorize hundreds or thousands of SKUs, why not train them in the CPQ sales process to future-proof their performance. You can turn your most inexperienced reps into top performers and trusted advisors.
The CPQ Sales Solution
- Elimination of errors and nonviable configurations with product rules
- Reps gain superior product knowledge
- CAD and design automation reduces communication breakdown
Challenge #4: Margins are being squeezed from every angle
Average profit margin is one of the core measures of a company’s financial viability and near the top of any list of sales KPIs. But pricing inconsistencies, weak discount controls, rogue selling, and inexperienced reps cause margins to erode over time.
The CPQ Sales Solution
- Guided selling assists in complex deals
- Dynamic pricing adjusts prices in real-time
- Instant access to data makes prices defendable
- Workflow management increases visibility and accountability
- Prices are always up-to-date
- Pricing rules protect margins
CPQ Implementation: 5 Steps to CPQ Sales Success
Replacing old sales processes with CPQ may seem daunting. But implementation doesn’t have to be expensive. Follow these five steps to avoid spiraling costs and slow TTV (time to value).
Step #1. Build a Strong Cross-Functional Implementation Team
A robust implementation team is multi-faceted–made up of both operational and technical members with a broad range of skills, perspectives, and objectives. It should include:
- sales experts who know customers’ needs and wants
- customer support leads who know typical customers complaints and resolutions
- technical support engineers who handle support tickets from operations and carry out internal training
- manufacturing leads with an in-depth understanding of product, tooling, and timelines
- implementers responsible for implementing the new software organization-wide
Assembling a capable CPQ implementation team is an art unto itself. PIKES, devised by Marco Mancesti, is a useful model that can help in this endeavor. Here’s a summary of how it works…
- Purpose: To see the implementation through to the bitter end, each team member is motivated by a personal driving force (TIP: adding another bullet point to the old CV isn’t motivation enough.)
- Integration: A strong team is cohesive and well integrated. Members have a shared vision of success. They understand the norms, behaviors, and rules that will see them through. They demonstrate respect, accountability, and reliability.
- Knowledge: The team has core knowledge and skills, both technical and “soft” (IQ and EQ.)
- Ecosystem: The team is accepted and respected within the broader corporate environment (TIP: an Executive Sponsor can tap into company resources and get buy-in from the board.)
- Self: The team builds wellness and stress-reduction into the core of its operations (TIP: do not underestimate the importance of this step.)
Step #2. Pinpoint Your Business Drivers and Develop a Project Brief
List all the critical business drivers fueling CPQ implementation. Is the aim to shorten sales cycles? Increase margins? Improve customer retention? Or something else? (TIP: design for outcomes, not features. The fewer features required to achieve your goals, the faster and cheaper the implementation.)
Your key drivers then inform your Project Brief–a document that provides a structured view of what CPQ implementation is designed to achieve and what steps will need to be taken along the way.
The Project Brief typically includes:
- Scope (what CPQ implementation will do, and what it won’t do)
- Business Benefits
- Areas of Business Affected
- Major Dependencies
- Stakeholders Resources
- Estimates of timeline and costs
Step #3. Develop a Strong Business Case to Secure Buy-In as Early as Possible
You need to get buy-in from regular employees and senior management. Work collaboratively to identify pain points and value-enhancing opportunities. Have a frank discussion about how job roles will be affected and how long implementation will take.
Senior management will want to hear a strong business case that demonstrates why CPQ sales are better than the current ‘Do Nothing’ approach. It should show why CPQ is affordable and consistent with high-level strategy. It should have clearly defined outcomes and funding requirements.
Step #4. Carry Out Your CPQ Project
You’ve been given the go-ahead. Now it’s time to execute and put your plans into action!
We break the execution phase down into three crucial stages, which your CPQ provider will be on-hand to help deliver:
Stage 1: Gather all relevant documentation: audit it for accuracy, clean it where necessary, and format it to be readable by the CPQ software. (TIP: this stage can be like pulling teeth, but I assure you there is a satisfaction to be gained from getting your house in order.)
Stage 2: Set up your environment: Connect your CPQ to your other business systems and provide access to your implementation team’s technical members who can get to work.
Stage 3: Design your outputs: Design all of your quotes, proposals, drawings, and CAD templates according to your brand guidelines.
Step #5. Tackle Company Culture to Overcome Resistance to Change
The most prominent barrier to CPQ implementation success isn’t technical–it’s human. Seventy percent of complicated, large-scale change programs don’t reach their stated goals because employees are resistant to change.
In her fantastic 2012 article, Rosabeth Moss Kanter identifies ten reasons for such resistance:
- i) We fear a loss of control.
- ii) We dislike excess uncertainty (“Better the devil you know…”).
iii) We hate surprises.
- iv) We reject things that seem different.
- v) We fear losing face.
- vi) We have concerns over our competence.
vii) It feels like more work!
viii) Pushback from people further down the line–the ripple effect.
- iv) Change stirs up past resentments.
- x) Sometimes, the threat is real! Jobs can be lost etc.
So what’s the answer?
Get early buy-in! Consult with employees, give everyone a say, take views on board, and be transparent. Provide accurate timelines and milestones to maintain momentum and create positive vibes.
Over-invest in training, education, mentoring, and support so that everyone sees value in CPQ sales and feels supported, valued, and, above all, capable of overcoming the inevitable challenges.
Now is the time to be bold
While it might feel overly-risky to invest in CPQ against a backdrop of unprecedented uncertainty caused by the Covid-19 crisis, now is precisely the right time to advance digital transformation.
We’re now starting to catch a glimpse of the “new normal,” and it’s a world that CPQ is well equipped to navigate. Here are five prevailing post-covid trends that CPQ tackles head-on:
- Less business travel and more remote work. Visual CPQ can provide a fully immersive buying experience, with AR and VR capabilities, from wherever buyers are located.
- Relationship selling is being replaced by B2B eCommerce. Embedding a visual product configurator into a customer-facing website empowers buyers to research, configure, and purchase products independently.
- Market conditions are changing rapidly. CPQ accelerates the “transition to agility.” Sales reps can focus on selling, engineers on R&D, and the software can handle the rest.
- Customer loyalty is at an all-time low. Buyers are reevaluating their supply chains, and switching suppliers has never been easier. Configuration errors and long sales cycles can bring long-term relationships to an end. CPQ eliminates mistakes and streamlines downstream processes.
The rise of the distributed office. An integrated CPQ tool promotes collaboration, transparency, and accountability.
The Definitive Guide to CPQ Sales: Part One