5 CPQ Techniques for Enhanced Sales Predictability

Across every industry, companies need predictability. Predictable sales processes help organizations plan better, sell more effectively, and scale their business with confidence. But achieving that consistently is challenging, especially if your products and services have complex pricing structurew.

Accuracy and efficiency are the two gatekeepers to a fluid, predictable sales motion. Companies use configure, price, quote (CPQ) software to deliver accurate quotes, proposals, product configurations, and pricing information to customers. And they use it to produce these things in minutes.

The importance of predictable sales and revenue growth:

Sales and revenue forecasting

The more predictable, the better. Why do you think SaaS companies achieve 5-10x valuation multiples on the regular?

They have recurring revenue (the most predictable revenue model on Earth). That’s why.

When a company can reasonably expect a certain amount of sales in the coming quarter or year, leaders can create a plan based on those projections.

• Sales managers can determine how many reps they need to hire, train, and retain. They can also set reasonable quotas for their sales reps.
• Financial executives can judge the organization’s performance and make predictions on cash flow and investments. 
• Marketers can design campaigns and target a specific audience with differentiated messaging.
• Operations and supply chain managers (if you have them) can plan their production schedules and manage stock levels.

Since businesses make decisions based on their data, its ability to closely reflect the true state of an organization is the difference between success and tremendous losses.

Budgeting

High-level financial decisions are based on revenue projections. When leaders get a handle on their revenue outlook, they can assess how much they can spend to build better products, acquire new customers, and bring on new employees.

If your sales strategies are disjointed, you can’t grow sustainably. That means your revenue growth from one period to the next is varied to the point where your finance executives don’t know what to do with your free cash flow.

Investor confidence

Investors look at a lot of different factors when they assess your competency as a leader. Your ability to manage your cash flow and invest it properly is one of the most important. Your ability to speak to your company’s trajectory for the next quarter, year, or three years is another.

Investors want a good return on their investment, and organizations with steady revenue are more likely to generate solid returns in the long run. They want to know you can consistently maximize ROI by using company resources effectively.

Predictable sales make it easier for investors to assess the performance of your company and project future returns. With predictable sales, you can show investors that your business is sustainable and able to weather economic downturns and other challenges.

Adaptability

Agility in today’s business landscape is probably the most crucial attribute an organization can have. The ability to plan ahead for sales and revenue gives you a better understanding of how to navigate through uncertain times (and plan for best- and worst-case scenarios).

With repeatable, efficient sales processes and a steady flow of new business, your revenue data is more telling of an actual upward or downward trend over a certain period. This means you can create financial models and test different potential outcomes with a fair amount of confidence.

Scalability

Scalability = the ability to grow without changing the current structure of your business.

Maybe “without changing the current structure of your business” is a bit too optimistic, but you want to be able to grow without having to overhaul your entire organization. And you need a certain element of similarity across time horizons to do that.

When revenue is predictable, you can better understand how fast you can scale your business. Leaders are in a much better position to plan for their next big growth phase when they know precisely what’s coming down the pipe in the form of new orders and recurring revenue streams.

Operational stability

When you have every stage of your sales cycle mapped out, your sellers will perform a whole lot better. They’ll have a hard time closing deals if they need to figure out what works from scratch every time they have an opportunity in the pipeline.

With a reliable strategy you can scale with, your sales team will be able to repeat many of the same processes over and over again (with variation on a per-customer basis, of course). You’ll already know what works and how you can achieve those outcomes. This means shorter ramp time, better sales performance, and overall better alignment within and between different departments.

CPQ software is a valuable tool that enables your sales force to achieve operational stability through automation, guided workflows, and simplified proceses.

5 ways CPQ enhances sales predictability:

Consistent selling experience

It’s ultimately your sales team in the customer-facing role. They’re the ones who handle the start-to-finish process of customer acquisition (minus marketing qualified leads, obviously).

Within the CPQ platform:

• Guided selling workflows enable sales reps to guide different customers through the same sales process while offering personalized product recommendations..
• Sales playbooks help reps deliver the right messaging to customers depending on their unique needs.
• Product rules facilitate automated pricing and configurations to ensure accuracy.
• Price waterfalls help reps visually configure complex products and bundles.
• Automated approvals bring down approval time from days to hours in many cases.

Synchronized data

The CPQ platform is a source of the truth for your sales team. It’s designed to be a single record so everyone can collaborate, review, and approve products and pricing configurations.

When your data is synchronized across departments (say, between sales and finance), you are better equipped to:

• Accurately forecast revenue in the coming quarter or year based on current pipeline opportunities.
• Track and manage stock levels based on revenue projections to avoid over or understocking.
• Make informed production decisions based on anticipated demand.

Product and pricing accuracy

When your sales team upsells complementary products to customers, closing someone on a product mix that isn’t possible would be embarrassing. You’d have to go back to the customer and let them know you were wrong about what they could purchase and what they couldn’t. Not a good look.

CPQ makes it simple to avoid problems like this. Admins set configuration and pricing rules ahead of time to only accept valid inputs. That way, reps can’t sell something the company can’t deliver on.

Automated approvals

CPQ can handle the grunt work and heavy lifting of approvals for you. When a rep puts together a quote, CPQ can automatically submit it to relevant approvers for review based on its contetns. Your sales team won’t have to wait on someone else or do the chasing around.

This streamlined process means your reps spend more time selling (and making money) while managers aren’t bogged down with approvals and paperwork.

Analytics and reporting

At the end of the day, the data your organization generates informs decisions and guides future strategies. CPQ can help you generate standard and custom reports that present key metrics in a user-friendly way.

With these insights, you and your team are better equipped to identify patterns, trends, and opportunities to improve the customer experience. You can also track sales performance over time and make more educated decisions regarding future pricing, product, and sales strategies.

Improve close rates with CPQ for predictable sales and revenue

The evidence is clear: CPQ is exactly what you need for efficient sales processes. It’s consistently been shown to improve close rates and decrease time to revenue for organizations that implement it

With CPQ, sales teams can:

• Simplify complex product configurations to avoid costly errors and delays
• Quickly generate accurate quotes with automated pricing calculations
• Improve cross-selling and upselling opportunities by ensuring valid product mixes
• Streamline approvals to speed up the sales cycle and reduce bottlenecks

Overall, CPQ enhances sales predictability by providing a uniform selling experience and data consistency inside and out.