What is CPQ and why is it important in 2023?
With fast-evolving technology, ever-rising consumer expectations, products launching competition as intense as ever, businesses need an agile solution to make it through the economic challenges of 2023. To add to the pot, businesses are juggling building products, determining prices, integrating data, creating quotes and managing customer relationships.
With the economic climate looking unclear for the foreseeable future, organizations are scrambling to find flexible and scalable ways to help them meet modern demands.
In this article, we’ll go over the basics of what CPQ is, see how it can benefit your business and explore how CPQ solutions have evolved to keep up with economic, organizational and consumer changes.
What is CPQ?
With complex quotes taking hours - even days - proposals filled with errors and deals requiring months until close, CPQ is considered to be a B2B must-have in an already cumbersome sales tech stack.
Your customer base needs a solution that is tailored to their specific situation, and will not settle for one-size-fits-all offering. In fact 80% of consumers are more likely to buy from a company that provides a tailored experience.
With an advanced product configuration tool, you can bundle features and functionality to give customers exactly what they’re looking for, all in real-time. Even with the most complex or extensive product sets, the right CPQ system can help you pull together a product configuration that suits your customer at speed.
Once you’ve configured the product, CPQ accurately calculates the price-taking into account discounting, business rules and other customizations. CPQ can automate pricing based on your preferred pricing strategy, whether it’s dynamic, competition-based or value-based.
Now it’s time to send the quote. Using CPQ, you can streamline approvals and gain signatures electronically - closing more deals in less time. Every quote you send is consistent and accurate, giving you customers a consistently convenient experience.
This engine sits within the larger concept-to-cash pipeline, connecting the product catalog to the order management, subscription management and document generation tools for a seamless process that eliminates many of the manual processes that can cause delivery errors, and impact customer experience.
So why is CPQ important for this following year?
Why is it important in 2023?
Rapidly fluctuating, the economic outlook for 2023 is rather unfavorable with a third of the economy hitting a recession, high inflation, and interest rates. The need for resilience is driving the demand for solutions designed to drive revenue despite economic uncertainty.
With instant gratification and speed being among the top preferences of today’s modern consumer, time is clearly of the essence.
66% of a sales rep’s day is consumed by time-consuming processes, with up to 50% spent on unproductive prospecting and error correction. The remainder goes to creating prices for consumers, and going through manual tasks to create an optimal bundle for them.
With non-CPQ users spending 73% more time producing a typical quote or price, sales reps end up providing sub-optimal bundles that are not flexible enough for today’s customers, impacting bottom line profitability.
B2B sales are increasing in complexity in 2023, with many organizations looking to implement new innovative strategies to help streamline sales and keep up with evolving needs. These complexities not only risk producing inaccurate information, but also impacts the ability for decisions to be made quickly.
The manual nature of sales processes carries additional complexities, enhancing errors across the board. And with one third of B2B companies relying on manual and inefficient sales processes, revenue leakage is increased.
CPQ keeps up with the pace of business today with its autonomous real-time changes and updates. Implementation no longer takes months, and organizations are no longer third-party reliant. CPQ facilitates even more efficient workflows than currently possible, laying out details in a digestible format.
With sales reps having access to information that allows them to make a split-second decision, they can close a deal faster. Employees no longer need to delay decisions because of inaccurate or incomplete information, helping teams increase quoting productivity by 33%.
The lasting value of CPQ lies in its ability to work with thousands of different configurations and product bundles instantly. As organizations enhance their customization capabilities, sales reps are able to build specialized configurations faster, delivering accurate proposals and shortening sales cycles by 28%.
CPQ software reduces the bottlenecks associated with selling complex products and systems, helping customers realize the true value of their purchase.
In order to do business effectively, businesses need to satisfy their customers in a digital-first environment. This however, requires a high degree of digital maturity.
In 2023 customers are demanding more features and customization options, even as they are trying to minimize their own expenditures, forcing organizations to leverage new technologies to make their sales processes more dynamic and efficient.
Technology aids in tackling pricing challenges that are associated with disruption.
CPQ implements an effective discounting tool for pricing, ensuring that sales reps retain control of the discount process, helping self-serve customers who are looking for the correct price for products - regardless of complexity and configuration. CPQ ensures the pricing processes are consistent and eases the burden of pricing complexity.
Guided by smart product configurations and recommendations, sales reps are able to gain a better understanding of their customers and interact with them effectively. CPQ solutions that are powered by machine learning make the mechanics of complex sales move more smoothly and efficiently.