Think back to when your business first implemented configure, price, quote (CPQ) technology. As a leader focused on driving bottom-line profitability, hopefully you noticed a major improvement in sales representative productivity, time-to-quote, quote accuracy/conversion rate, and ultimately customer satisfaction. This initial uplift is to be expected as a CPQ solution should have a transformational impact on any business that sells complex, configurable product offerings.
Now, bring yourself back to the present. Is your CPQ solution still producing these results and providing the ROI you expected? If so, congratulations! You’ve done a great job maintaining and aligning your CPQ platform to keep pace with a constantly evolving business. If not, you’re not alone. Underperforming CPQ implementations is a business challenge we come across in conversations with clients. These clients are seeking improvement and require remediation to realize the full benefits of their CPQ solutions to meet today’s business demands.
What is CPQ Remediation?
Just like a car needs an oil change, filter replacement, and new spark plugs from time to time, a CPQ system must be actively managed and maintained. Because as a business grows, and expands/rationalizes its product offerings, or as it evolves its pricing strategy to align with new strategies, changes in the marketplace, and more, its CPQ system must adapt.
CPQ remediation is the process wherein an underperforming CPQ deployment is analyzed to pinpoint existing problems and possible future pain points. It’s a critical if not often-occurring task that ensures an older, slower, or even broken CPQ implementation is up and running, and at maximum efficacy. And there are a few key indicators that reveal if a remediation is imminent.
But before we dive into CPQ Remediation indicators, let’s take a look at some common causes driving poor CPQ performance.
Common causes of CPQ performance issues
It’s not just time that creates issues. It’s what happens over time (and sometimes instantly). Extensive customization, too many product bundles, excessive or broken API calls, faulty system integrations, and a host of other factors can contribute to your CPQ performance issues. Unfortunately, the subsequent, recurring pain points caused by poor CPQ performance is what will hurt your business the most.
It’s no secret that customers expect seamless, convenient buying experiences. If your sales reps are submitting quotes slower than the competition or quotes with pricing errors, their probability of winning that business decreases dramatically. Consider this: manufacturers who are first to submit an accurate, complete quote win the deal at least 60% of the time. And with an underperforming CPQ solution, fast is rarely possible.
It’s not just the customers who could become unhappy. If your sales team is struggling to win deals because of an inefficient quoting process, they’re much more likely to seek greener pastures elsewhere. According to HubSpot, a #1 reason top sales performers stay at a company is access to modern selling tools and technologies. On the flip side, inefficient revenue operations and under performing sales technology is a surefire way to send top sellers packing.
How do you prevent these problems? CPQ Remediation.
Six warning signs your CPQ solution could use a tune-up
1. Your average time-to-quote is increasing
A sales team struggling to get quotes in the hands of customers quickly is either a people or a platform problem.
The good news is that if it’s a “people problem,” your CPQ system can help by presenting analytics on sales quotes in process (showing you who’s moving quotes along quickly, and who’s not).
If it’s a platform problem, well . . . your CPQ system basically tells you that as well: too many clicks to quote, price adjustment challenges, and system timeouts are key indicators to watch out for.
2. You’re not converting quotes to orders as fast as you used to
Building on the last point, if your time-to-quote or quote cycle time is increasing, you’re most likely going to see your quote-to-order conversion rate decrease, which obviously will impact overall revenue as well.
As mentioned, salespeople who are the first to contact a customer/prospect with an accurate, fairly priced quote are salespeople more likely to win the business. If your sales team is consistently showing up to the party late and losing deals at an increasing rate, a balky CPQ system could be to blame.
3. Manual discounting processes
A key, out-of-the-box CPQ component is rules-based discounting in which your CPQ technology automatically applies relevant discounts to quotes based on pre-defined criteria (such as a volume-based discount, a customer-negotiated discount, or a seasonal discount).
But manual intervention from sales does happen. For instance, a special discount may need to be applied or an automatic discount may need to be edited. If this need moves from “once in a while” to a trend, reexamine how discounting rules are configured in your CPQ system and ensure they’re aligned with your current business needs, product offerings, and customer needs — because all of those change over time.
4. Revenue leakage caused by manual renewal processes
If you sell recurring products/services, automatic generation of renewal quotes is table stakes – if the burden is on individuals in your sellers to manually create quotes for service renewals, it’s almost certainly costing you time and money.
You should be able to rely on your CPQ solution to automatically generate accurate quotes for renewals and any/all recurring revenue products and services. If your sales team is manually generating renewal quotes, it may be time look into your sales processes and teams and ensure they’re leveraging the built-in power of your CPQ solution for such products and services. (More of a workflow remediation need than a CPQ remediation need, but the latter can fix the former).
5. Mistakes are piling up
Designed to improve accuracy and support complex quoting processes, a high-performing CPQ solution should drastically reduce quoting errors while also minimizing time-to-quote.
Over time, however, people may enter complex or duplicate product bundles or build faulty system integrations or input location-specific pricing—all user-fueled challenges that can lead to an error-prone quoting process.
If mispriced or incorrect quotes are a common theme within your sales organization, it could be time to look under the hood of your CPQ implementation.
6) A frustrated sales team
Finally, and perhaps the most obvious signal that a CPQ system may be underperforming or not implemented properly, is a frustrated and burned-out sales team.
Did you know that the average outside sales rep only spends about 1/3 of their time actually selling? According to Forbes, “administrative tasks dominate sales reps’ time. In fact, 14.8% of an average week is spent on these tasks.”
A CPQ system should be freeing up your sales team to close deals, grow your revenue, and hit their commission targets. If they’re spending time manually creating quotes, chasing down approvals, and struggling with complex discounting scenarios, either a “re-training” or a CPQ reboot may be in order.
How CPQ remediation can help
While in some cases, the issues detailed above are people problems, CPQ remediation is essential in optimizing the solution and the workflows attached to it. Remediation can be targeted — where only specific processes are addressed — or it can be overarching via a more comprehensive “reset.”
CPQ remediation will help your business recapture the benefits and process efficiencies of the original CPQ implementation, with the added benefit of experience in using the system, and knowing how to optimize it for your current or projected, near-term business needs. Typical benefits include:
- Streamlined quoting process that requires little or no intervention from sales
- Lightning-fast time-to-quote
- Ability to quickly quote and sell subscription and usage-based products—and to automatically generate monthly/quarterly/annual quotes for these recurring revenue streams
- A high-performing sales organization that surpasses revenue targets and drives long-term customer satisfaction
- Low-touch quoting support for contract amendments
Want to learn more? Want to uncover if it’s a people or a platform problem? Argano can help.
Having completed hundreds of successful CPQ projects – including greenfield deployments, remediations, and comprehensive rip-and-replace efforts – Argano is a leading global revenue operations consultant and systems integrator headquartered in Plano, Texas.