In any B2B business, right pricing is critical to close a deal, particularly when you are trying to stay ahead of your competition and make a winning bid. As the pandemic still continues to rage on, organizations are looking to improve the B2B sales experience for the sales team as well as customers. Customers today expect faster time to purchase, self-service and simplified buying experience.
So, it makes sense to invest in Sales Transformation solutions like a Configure-Price-Quote (CPQ) software that can help you automate and streamline your pricing strategy, instead of letting your sales team struggle with pricing numbers on spreadsheets. CPQ software is designed to support companies who have a large number of products and services, multiple pricing models with multi-level approval processes. It provides a single source of truth for pricing information and makes it easier to introduce new products or pricing scenarios based on changes in your company’s strategy.
However, it is also true that a number of CPQ implementations deliver subpar results or fail completely at worst. The success of CPQ implementation depends on how well it addresses the day to day challenge of your sales reps. As a sales or technology leader looking to implement CPQ software for your organization, you need to be aware of common pitfalls and adopt best practices for implementation.
Here are a few tips to help you make the best of your CPQ implementation.
- Align your sales team and sales processes: Your sales team is the backbone of the sales process and they will be highly influential in deciding the fate of CPQ implementation. It’s important that you interview senior sales reps and managers and understand the existing sales process and how the ideal sales process should be. How do they explain your company’s products and services to the customers? How does the existing Configure, Price and Quote process work? Where are the bottlenecks and inefficiencies? Understand what they need in order to generate quotes and drive sales more effectively.
- Align your customers and your business: To sell effectively using CPQ software, you need to understand your customers better and how the software can help them. You need to get answers to questions such as: Which channels do they use for shopping? Do they buy bundled or individual products or services? Do they prefer self-service? Which products or services are seasonal in nature? What kind of promotions and discounts do they expect?You can also relook at your existing product catalog, bundling strategy, pricing model, approval processes and rules. Once you understand your customer needs and map it to your sales team needs, you can tailor the CPQ accordingly and make use of features such as guided selling, rule-based approval processes and document generation.
- Identify dependencies on other systems: CPQ software does not work in isolation. Sales teams need access to information seamlessly across internal and external systems during the sales process and to support go-to-market strategies. So, ensure that the CPQ software can easily integrate with your ERP and can work with your CRM, order management, billing and other legacy systems to ensure a seamless service delivery experience. Also, look at other systems that might be affected, what will be the new workflow and what information needs to be shared between these applications.
- Maintain consistency in products and services pricing: Your organization might use different pricing strategies ranging from discount pricing, volume pricing, value- or outcome-based pricing, or lifecycle pricing depending on the product or customer. A lack of consistency in pricing can lead to pricing anomalies which may impact revenues in the long run and lead to customer satisfaction challenges. It’s important that you centralize pricing rules, update the information regularly and provide support for different pricing strategies to ensure consistency in pricing across all interaction channels.
- Leverage OOB Features to drive more sales: CPQ software is designed to help your sales team increase the average deal size by cross-selling and upselling. Guided selling is a feature that allows sales teams to suggest sales options based on a set of predefined questions rather than presenting a fixed set of product options to customers. To make your sales team more effective and drive revenue growth, you need to leverage these features and train your sales teams in using them.
- Ensure leadership support: A successful CPQ implementation doesn’t depend only on the sales teams. Multiple departments including marketing, finance, operations and IT are engaged in the sales process and CPQ implementation along with the sales teams. This requires cross-functional collaboration to drive adoption of the CPQ software and the necessary process changes across these functions. With a business leader as a champion, it becomes easier to drive cross-functional leadership engagement for the initiative.
- Change Management: Many CPQ implementations fail because of inadequate migration or transition plans. For effective change management, you need to communicate how the new system will benefit the internal stakeholders across various functions. Also, develop a training program along with live demonstrations of the product to drive adoption. Some users eventually become advocates of the product and help drive faster adoption.
Implementing a complex CPQ system is a big undertaking. No matter how much you prepare, there will always be a few unwanted surprises. However, if you follow the best practices mentioned above, you will have fewer things to worry about.