December 18 2020
Instantly generated and always error-free, a CPQ quote is far more likely to convert into cash than a quote built manually in Excel. On average, KBMax CPQ users achieve a 105% increase in deal size, a 40% increase in conversion rate, and a 26% increase in reps achieving quota. We find out why.
A bit of background: Why investing in CPQ provides such rapid ROI
Sales reps are hired to sell products and services. And they're paid an average base salary of $64,000 to do just that. In reality, however, they spend precious little time on revenue-generating activities (estimates range from 36% to 22%), and the rest on replicable, menial tasks, such as building quotes that never go anywhere!
Sales reps could never spend 100% of their time actively selling. So long as the role exists (and doubts remain over how long it will survive with AI coming to the fore), planning and research will form crucial parts of the job. But sales reps are fighting a substantial and unnecessary administrative burden. Complicated, error-prone pricing calculations, endless formatting of quotes in Excel, and days spent waiting for responses to approval requests combine to rob reps of their true profit-making potential.
The “CPQ quote” is the culmination of the entire integrated CPQ process that automates and optimizes product configuration, pricing, and quoting activities within a business. With CPQ, sales reps are freed to focus on the more "human" side of the job–forging new customer relationships, strengthening existing ones, generating cash for their respective employers, and commission for themselves.
Three Reasons Why a CPQ Quote Is Far More Likely to Convert Than One Created Manually
Reason 1: A CPQ quote contains perfectly optimized customer-specific products and bundles
Sales is hard—especially for complex, configurable products—and surging demand for personalization is making it all the more challenging. The idea of sitting down side-by-side with a customer and thumbing through a printed catalog of one-size-fits-all products is almost laughable these days. Buyers want customization. And they expect sales reps to deliver it with an expert level of product knowledge.
But it’s not realistic to expect sales reps, especially new hires, to have the expertise required to manually configure highly technical products with hundreds of options, rules, and dependencies. To get more deals over the line, sales reps need software to optimize products and bundles for customer satisfaction, engineering efficiency, and profit maximization. Cue CPQ.
Through a series of carefully calibrated questions or via an interactive visual interface, CPQ guides sales reps and buyers towards configurations that are optimized for customer satisfaction, engineering efficiency, and profit maximization, every time. Product rules—logic statements built into the software's backend—govern the process, eliminating errors and nonviable products.
Reason 2: The price is always right with a CPQ quote
CPQ automates pricing and the approval process, shortening sales cycles, eliminating human error, and removing delays that threaten deals and push customers into the arms of competitors.
Reps save a tremendous amount of time, but they’re not bound by the software’s calculations: they can apply their own discretionary discounts or special pricing conditions, in line with their permission settings. Rather than reaching out to managers directly for approvals, approval requests are sent out automatically when discounts surpass a certain threshold and can be signed off or rejected by a manager with a single click—no more missed calls and baffling email threads.
CPQ pricing isn't just fast; it's "intelligent." A broad range of fluctuating environmental factors is incorporated into its pricing calculations, such as cost prices, competitor prices, demand, stock level, and customer profiles. Without pricing software, sales teams could never have the human resources required to effectively monitor these continuously evolving conditions, let alone recalculate and update prices accordingly.
Reason 3: The CPQ quote is automatically generated, reducing time to quote
Finally, we arrive at the CPQ quote, which is, in a way, the most straightforward of the three CPQ processes, but also the most crucial: No quote, no sale, after all. A CPQ quote is instantly generated, in a single click, without any of the manual formatting, editing, and sharing associated with Excel and its equivalents. Quotes are stored in a centralized repository accessible to everyone, keeping entire teams transparent and accountable.
Some CPQ solutions, like KBMax, can automatically produce far more than simple quotes. Sales reps can generate proposals and CAD drawings, ensuring a fast sales cycle, clearing engineering bottlenecks, and getting more customers moving through the sales pipeline.
How does Salesforce handle CPQ quotes?
A "Quote" in Salesforce—somewhat confusingly—serves a dual purpose. From a customer's perspective, it's—as one might expect—a PDF with several quote fields (see below) and spaces for signatures. From an internal perspective, it's a little bit different.
Internally, a quote is kind of a "draft.” Sales reps can create multiple quotes for each "opportunity" (the word Salesforce uses for a pending sale) to experiment with different figures and layouts, get feedback from colleagues, and seek approvals from line managers. Once a final quote is agreed upon, it becomes the Primary Quote, which is duly fired off to the customer.
Sales reps have tremendous freedom when building CPQ quotes in Salesforce. There’s a multitude of attractive, brand-correct document templates to choose from, which can be edited by adding or hiding columns, pages, and sections. However, the Salesforce CPQ quote’s real versatility lies in the 70 or so Salesforce CPQ Quote Fields available, which cover pretty much every potential use case, as you can see from the examples listed below.
When it comes to CPQ quote terms, reps have flexibility too. Terms can vary by template, be chopped and changed line-by-line, and modified automatically when predefined criteria are met. For example, a CPQ quote can be configured so that, if a certain product weight reaches a certain threshold, additional safety compliance terms appear. It’s a massive win for time-stretched reps.
So, is there anything Salesforce CPQ can’t do? Salesforce is one of the top CPQ products on the market but there are a couple of gaping holes in its core functionality that might render it unsuitable for use by manufacturers of complex, customizable products. Fortunately, these holes can be plugged with apps available from the Salesforce AppExchange. KBMax's "Super C”, for example, provides the visual product configuration and CAD and design automation capabilities suitable for use by manufacturers of highly technical goods in industries like biotech, heavy equipment, and modular buildings.
Examples of Salesforce CPQ Quote Fields
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