What is Salesforce CPQ?

What is Salesforce CPQ and How Do I Maximize the Benefit?

December 23, 2019

What is Salesforce CPQ?

Salesforce CPQ is a sales tool within Salesforce CRM that enables companies and their salespeople to provide reliable and accurate pricing across various configuration and transaction scenarios.

Why stand up a configure, price and quote (CPQ) solution with Salesforce CPQ?

Salesforce didn’t become a 13+ billion dollar per year company without becoming the default nerve center for many sales organizations around the world.

CPQ applications often work in harmony with CRM and ERP systems so it is natural to want CPQ deeply integrated with, or in the case of Salesforce CPQ, within your CRM application. This lends to the idea of the Single-Source-of-Truth, allowing Salesforce to be that system of record for your customers and their pre-sales transactions.

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Salesforce CPQ Product Configuration

Salesforce CPQ can handle various business and pricing scenarios:

Salesforce guided selling helps salespeople match their customers to the right product or service offerings using step-by-step wizards. Their Solution Configurator allows you to establish product bundles to make a complex sale easier.

The Salesforce CPQ pricing engine allows for flexibility across multiple pricing scenarios including one-time, usage-based, and recurring models. The engine generates accurate and branded quotes that allow for optional sharing of discounts and line-item details with the customer

These product configuration and pricing capabilities allow for more simple renewals, contract pricing and negotiation, and easier sales conversations for sales reps as quotes, purchases, subscriptions, and customer information is all held in one place.

Let’s Talk Advanced Configuration for Complex Products in Salesforce CPQ

Companies struggle getting their CPQ to work with complex products that have many variations and options as part of the sale. With success comes pain – as sales volume is scaled the bottleneck with back-and-forth between customer, salesperson, and engineering/production gets worse.

This is where advanced CPQ rules come in to play.  KBMax Snap is the “Super C” for Salesforce CPQ, driving a more powerful product configurator. The “Super C” is a visual, low-code solution to construct complex mathematical functions, product rules, and manufacturing data outputs to assist with product configuration, dynamic pricing, quoting, omnichannel sales, and manufacturing automation.

Can the Salesforce CPQ Buying Experience Benefit from Visual Configuration?

Most would agree that seeing and experiencing a product before buying is a plus. Salesforce tells us that 70% of B2B eCommerce customers expect a B2C, or an Amazon-like, experience. Especially when considering complex product sales, allowing a customer to “see before they buy” can have an incredible impact on sales.

Why a Visual Configurator?

Visual Configuration Makes it Easy For Every Sales Channel

An omnichannel configurator will allow any audience: internal salespeople, distributors, or end buyers to configure a product. When a CPQ solution allows for visual configuration, complex purchases become much easier. KBMax’s visual configurator integrates with Salesforce CPQ so these disparate channels can have a similar, but segmented experience controlled by the “Super C” rules engine. The information flows seamlessly into Salesforce CPQ and back to make estimating, ordering, and change management simple.  KBMax customer, Tuff Shed, trimmed $105,000 in payroll savings from automated order entry because these audiences could self-serve during the estimating and ordering process.

Visual Configuration Makes Buying Compelling, Driving Up the Average Transaction

Rather than talking through hypothetical options over the phone, buyers get to see real-time changes rendered right in front of them. Prices are updated, and they will upsell themselves features being able to picture themselves using it. KBMax customer, Tuff Shed, experienced a 6% increase in average sale price producing a $7.6 million boost in sales revenue after implementing their joint Salesforce CPQ and KBMax solution.

Tuff Shed built their configurator to allow for website visitors to place objects into their shed as they design it virtually in 3D.  This allows them to quickly see challenges with their design. For instance, if they plan on putting a mower in their shed they could see they need to increase the size of their shed to allow them to move around it, store other items – and tack on some ramps so they can get out of the shed. These realizations during a product purchase can be the catalyst for big upsell opportunities and doesn’t require a salesperson’s value time or to apply undue pressure on the customer to purchase add ons.

Enable B2B2C by Exposing your Visual Configurator to Website Visitors

Instead of a static product catalog with lists of bullet-pointed features on your website, immerse visitors in a product buying experience that allows them to customize, see, and then purchase just what they want with confidence. This direct-to-customer exposure by embedding in a website dramatically shortens sales cycles. Tuff Shed reduced their number of sales calls by 500,000 because they eliminated the dozens of questions and back-and-forth communications required to sell a building.

 

Can Salesforce CPQ Help with Manufacturing and CAD Automation?

Before a manufacturing team can build they need a clear set of requirements. Depending on the industry, pre-sales and order processing stages of the product life cycle might require a touch by Engineering to generate, customize, or update CAD drawings.  This can be a major bottleneck for sales and production.

Another way to drive efficiency is to use all of the information gathered from the product configurator and Salesforce to drive the manufacturing floor in the form of BOMs, assembly instructions, blueprints, packing lists, and more.

Combining the in-depth order data along with CAD automation visuals lends to perfect clarity during the production phase.

With auto-generated BOMs and cut sheets driven by KBMax configurators and pushed into Salesforce CPQ, the ERP, and to their production teams, Tuff Shed decreased their material usage rate 1%. That may not seem like a lot but in one year it equaled $1.1 million material cost savings because clear instructions driven directly from customer configuration mean the production teams are picking less materials and cutting them more efficiently and accurately. The added accuracy has also reduced errors on job sites at an estimated soft cost of $2.9 million for Tuff Shed.

 

“How Do I Go About Creating a Joint Salesforce + KBMax CPQ Solution?”

“There is no one recipe for a successful CPQ implementation. It’s a combination of understanding your own strategy, change management, processes, products and people. A lot of the companies I come across simply aren’t ready. The advice we give is to start well before you purchase software and start by planning the project, not by buying the software.There is a lot of planning that takes place in regard to financials, people, processes, and customer experiences.”

Nikhil Karwal, Group Head of Practice EMEA at 4C

Digital transformation takes time, change, resources and organizational alignment. If you’re unsure of whether you are ready to take on a CPQ implementation project know that there are four basic steps in determining your CPQ readiness and strategy.

  1. Identify and document your organizational goals and roadmap
  2. Break down your organization roadmap into processes
  3. Map your processes in their current state
  4. Design an agile process for implementation, change management, and maintenance
Reach out to a CPQ specialist who can start you on your transformation using your existing investment in Salesforce.

Contact a CPQ specialist

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The Author

DJ Monzyk

DJ Monzyk
Director of Web Marketing at KBMax

DJ is a long-time marketing consultant and technologist, helping companies with marketing strategy and marketing technology. He loves telling stories about applied technologies and the impacts it has on buyers.

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