CPQ: From add-on to disrupter?
(Image Credit: iStockPhoto/ThomasVogel)
CPQ has crept up on the sales and marketing community by stealth and suddenly the term is everywhere, but why?
At its most functional level, CPQ is a set of software applications enabling telecoms companies to Configure, Price and Quote. This is exactly what is required to make the sales process more efficient and consequently it has become as vital a business tool as a CRM or ERP system.
But such is the pace of change in the industry that even this relatively new technology has quickly become outdated. Companies that want to be ahead of the game are now looking for even newer platforms that can further streamline excessive admin, can quickly adapt to launch new products and services to address market changes – and then support the team throughout the whole product and sales lifecycle. They want to use this technology to identify rapid roots to sales and growth. In short, they are finding that first wave CPQ platforms just don’t hit the mark.
Cue next-generation CPQ platforms. These are more than just an upgrade; they are now being seen as a genuine opportunity to completely transform operations for the better by putting innovation at its heart.
To better understand the power of next-generation CPQ, it’s useful to take a step back and look at the current state of the telecoms industry. Whereas it used to take months or even years to come up with a concept such as a new TV bundle and bring it to market, this is now far too long; there are competitors ready to move into every gap every time you hesitate or even pause to think.
At the same time, because of this constant need to introduce new and compelling products and services, portfolios are becoming increasingly complex – a situation made worse by compliance demands. So despite this constant need to innovate, sales and marketing teams often struggle to optimise the potential of a full product catalogue.
New CPQ platforms are providing the agility to address these challenges. Evidence shows that they can accelerate the quote-to-cash process by 30% and reduce errors by 25%. They can replace clunky systems and long hours of admin for sales staff, plus a way to react rapidly to changes in the market and identify the best ways to help a company to grow.
So what should anyone interested in next-generation CPQ do to convince their company of its value – and then make the most of the investment? Here are a few pointers:
- Don’t just talk about CPQ and expect all your colleagues to understand exactly what it is and how it can benefit your organisation. This may require some tailoring of messages. Marketers will appreciate the promise of a shorter time to market, improved conversion rates and lower costs per lead. If you’re talking to the sales team, higher percentages of quotes achieved and increased retention rates are more likely to impress. On the other hand, customer-facing teams will listen when improved customer experience and reductions in admin are discussed.
- CPQ tools can be deliver as software as a service (SaaS) though the cloud, so there’s no major capital outlay or long implementation time. Typically the platform will come preconfigured and ready for set-up and integration into the business and – because it is cloud-based – responsibility for running and maintaining the system lie with the vendor.
- Consequently, when it comes to the IT department, handle with care. CPQ takes some responsibility away from them and instead gives it to those who are not necessarily technological experts. It all makes sense as it frees up the IT wizards to be more strategic rather than focus on the nuts and bolts of legacy systems, but this needs to be explained in a sensitive way.
- CPQ demands a long-term vision. At first you may just want CPQ to replace older technology – there will still be some quick wins in the form of operational efficiencies and cost savings. However, opportunities to transform the entire business only come along once in a blue moon. So it’s worth making the most of this one. For example, CPQ’s real strength is the way it provides unprecedented agility to change the way a company goes to market. To begin with it enables you to think beyond traditional channels to provide a unified buying experience by providing a seamless cross-channel experience, encouraging loyalty and customer retention.
- In fact, the customer is a good place to start – CPQ can help align the sales process to the customer experience. Consider what is important to customers from sign-up to billing. CPQ platforms help build customer experience foundations based on a genuine understanding of the most valuable customer interactions.
- While CPQ is a fantastic solution for sales enabling teams to exceed targets for new customers and renewals, to maximise its potential it should be rolled out across an entire organisation. For example, marketing teams and product managers will be able to experiment and quickly find the right formula for them – the innovative products, the commercial models and the most effective channels to market. And do so up to 60% less expensively, according to our research. Senior management can use the data captured for strategic planning in response to market changes.
There’s no doubt that CPQ can be a disrupter, helping break down organisational barriers and replace them with a single view of the customer, the sales process and the product. But it’s a valuable future-proofing exercise, leading to an integrated and ready-for-anything company.
Do you think CPQ can be a disrupter? Let us know in the comments.
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