Recent research from CSO Insights and Accenture shows that CRM has a signi?cant impact on the sales process, but less than 20 percent of companies that use it are seeing any increase in revenue or win rates. New capabilities are needed to make meaningful progress. If your company is entering a growth phase, Con?gure, Price, Quote (CPQ) technology is a powerful way to help your sales team become more ef?cient and productive. It will give them additional time to spend with their customers and result in more deals moving faster through the sales pipeline. In fact, CPQ’s ability to drive growth makes it an excellent tool for companies today as they try to capture their fair share of the emerging economic recovery.
In a growth environment, companies tend to be fairly effective at getting leads into the sales pipeline, because buyers are out looking for opportunities to drive their business. The biggest challenge is to speed up the velocity of the opportunities through that pipeline. And that sales velocity is where many companies fall short. How do you grab those opportunities and move them through the pipeline as fast as possible to aid your company’s growth? In part, the solution is to make sure you’re highly ef?cient in how you handle your interactions (or touch points) at each stage in your sales cycle.
Here are ?ve ways CPQ improves ef?ciency to keep your sales pipeline moving:
1 Fast quote generation: A salesperson only has so many hours in the day, and many would tell you that getting quotes out is extremely time-consuming. When you use a CPQ solution, it increases sales productivity by improving quote generation. The average sales rep generates 14 proposals, quotes or RFP responses per month, according to research from the Aberdeen Group. When a rep uses CPQ, however, that number jumps to an average of 20.9 proposals per month.
The statistics are particularly interesting when you consider that these aren’t simple, straightforward proposals. Typically, a CPQ solution means you’re dealing with a complex, con?gurable product. So you’re looking at a 33 percent productivity increase for quoting products that are probably quite complex.
2 Reducing the number of interactions: To move deals through the pipeline, reps need to be faster and more ef?cient when it comes to interacting with customers. That means eliminating unnecessary sales activities and touch points whenever possible, and getting the necessary activities done right — the ?rst time.
For instance, when you use CPQ to arm sales reps with accurate and winning information, salespeople deliver more precise sales offers. That increases speed and ef?ciency, because they deliver fewer versions of the quote before closing the deal. Salespeople who use CPQ solutions deliver an average of 2.42 versions of a quote, ?gures from the Aberdeen Group show. That represents a 13 percent reduction compared to the 2.74 versions delivered by reps that don’t have CPQ. This is just one example of how CPQ solutions help to reduce or eliminate touch points, increasing the sales velocity as opportunities move through the pipeline.
3 Shortening the sales cycle: According to the research from CSO Insights and Accenture, for companies that use CRM systems alone, less than 20 percent have seen any improvement in terms of incremental revenue, shortened sales cycles or increased win rates. Almost no one is seeing margin improvement. Companies that use CPQ solutions, however, are achieving dramatically shortened sales cycles. According to the Aberdeen Group’s research, CPQ users have an average sales cycle of 3.42 months, compared to 4.68 months for non-CPQ users. This suggests that adopting CPQ technology could reduce your sales cycle by one-third, helping you move sales opportunities through the pipeline much faster.
4 Decreasing ramp-up time for new sales personnel: When you start increasing sales velocity, your sales team needs to be able to manage the increased capacity. Is your current sales staff covering the accounts effectively, or do you need to hire more reps? When you’re considering your capacity, you also have to consider the impact that employee turnover has on your sales velocity.
In general, best practices suggest planning for an 8 percent turnover rate in your sales team. As our economy improves, however, reps are starting to move around more, with turnover rates in B2B sales closer to 14 percent. With such high turnover rates, it’s important to decrease the amount of time it takes for new salespeople to get up and running. Using a CPQ solution with guided selling, cross sell, upsell and pricing guidance helps new reps quickly become effective by providing them with information, market insights and pricing strategy that would ordinarily take years of experience to accumulate.
5 Supporting multi-channel sales: When your company is trying to capture growth, it’s important to cover your addressable market as ef?ciently and fully as possible through multiple sales channels. If you’re selling your product through partners, e-commerce and direct sales, you want to increase the ef?ciency without having to use three different solutions.
A good CPQ solution should offer multi-channel capabilities supporting sales effectiveness across all channels, giving your partners tools that make them more effective and ef?cient within their part of the market. Extending these CPQ capabilities to your partners helps them achieve a faster time-to-revenue and accelerate the capture of your fair share of the total addressable market.
Adopting CPQ technology could reduce your sales cycle by one-third, helping you move sales opportunities through the pipeline much faster.
