While there are many good reasons to invest in Configure, Price, Quote (CPQ) systems, two matter most in today’s increasingly unsettled business environment. 1: CPQ increases revenue, which drives topline growth, and 2: it boosts sales productivity, improving bottom-line profitability as well.
Even before the pandemic, CPQ adoption was brisk. But now it’s viewed as table-stakes. Amidst the continued emergence of new COVID-19 variants, supply chain disruption, and persistent labor shortages, businesses are adopting CPQ at a fevered pitch, seeing it as a critical component of their digital transformation efforts. And with good reason: An analysis from Nautilus Research found that for every dollar invested in CPQ, companies recoup $6.22 in the first three years.
Why is this? It’s simple: CPQ addresses the relentless change impacting all businesses: Namely, today’s customers demand more. They demand fast, effective omnichannel solutions on their terms that provide an “Amazonesque” buying experience.
These changes have come on fast. In 2016, McKinsey reported that the typical B2B buyer used five channels to interact with suppliers. By 2019, that had risen to 7.5. And, in the most recent McKinsey survey, buyers say they now use ten different channels to interact, including video conferences and online chat.
Customers love these expanding digital possibilities and want more. In the first nine months of 2021, McKinsey notes a seismic switch: More buyers now say e-commerce is the most effective way for them to interact with suppliers, ousting in-person contacts as the favorite.
By centralizing pricing and customer data and making it actionable in real-time, CPQ supports this buying preference while unlocking 3 digitally enabled revenue drivers:
1) CPQ improves customer experience: In our digital-first world, buying experience is everything. It matters more than relationships, loyalty, selection and even price. If customers don’t enjoy every aspect of the path to purchase provided by your business, they’ll take their business elsewhere.
While it’s been hard for some manufacturing companies to accept, the reality is that in today’s B2B sales environment, customers aren’t just comparing one supplier to another. They’re expecting an interaction that is as easy as the purchases they make on Amazon and Netflix.
CPQ helps create those world-class experiences. More options, quick and easy quotes, and seamless purchase methods enable the nimble performance and seamless digital interactions today’s customers demand.
Freed from the constant back-and-forth of communicating quotes for multiple scenarios, sales teams can focus on higher levels of service. They have more time to ask customers the all-important question: “How can we better serve you?”
2) CPQ offers customization at scale: People’s rising expectations of digital experiences are closely intertwined with growing assumptions about customization and personalization, regardless of industry. Buyers expect to be able to customize every aspect of their orders – whether small or large – to meet their very specific business needs.
In this competitive environment, you must be able to meet this customer expectation even if it means overcoming persistent disruptions in your inventory, labor and/or shipping workflows. By enabling your business to overcome these ever-present challenges, a CPQ solution will enable you to consistently deliver the customized buying experiences your customers expect. Consistency is the key idea here. Many of your competitors will not be able to provide these customized buying experiences on a consistent basis or at all. Your ability to do so will set your business apart, which will build trust with your customers and increase future revenue opportunities.
3) CPQ activates a customer-first mindset: By eliminating thousands of hours of non-value-added work, CPQ will empower your teams to think and work differently. With a cloud-based CPQ system in place, error-prone manual pricing processes will go the way of the dodo. Equipped with the confidence that quotes are accurate and error-free, your employees can focus on the bigger picture – listening more closely to customers and finding new solutions to help them grow. A natural byproduct of this customer-aware approach is discovery of new (and more profitable) ways to serve your customers. Would customers benefit more from bundles? A subscription? Auto-replenishment?
Not only will your staff have the extra time to devise new ways to serve and sell to your customers because of CPQ, the technology will actually automatically suggest recommended/complementary products and services, which will activate new upsell/cross-sell opportunities for your sales reps. By integrating CPQ with your CRM system and establishing parameters that define these opportunities, your reps will have the right information at their fingertips to grow accounts and provide proactive service to your customers.