CPQ: Fueling B2B Sales Success

July 23, 2023

As companies try to meet their customers’ increasingly demanding needs, their product and service offerings become inherently more complex. Microservices, add-ons, quote-based contracts, and custom API integrations are the norm in today’s B2B landscape.

For B2B sales teams, these complexities bring challenges that can easily get in the way of closing deals. Prospects are no longer happy with a simple, one-size-fits-all solution.

The answer? CPQ (configure, price, quote) software. As a sales aid, CPQ helps reps develop tailored and accurate quotes for even the most complex product catalogs. By automating the quote creation process, CPQ eliminates countless error-prone and time-consuming activities that get in the way of new revenue.

B2B Sales Teams Face Complex Challenges

B2B businesses have unique customer-facing and internal challenges impacting their sales process.

Qualified leads are hard to come by.

When surveyed, 40% of sellers agree that prospecting is the most challenging aspect of selling while more than half say getting in front of the right prospects is more difficult than it was five years ago.

Given the significant advancements in sales insights and lead generation, this seems like an anomaly. But there are several reasons B2B buyers are harder to reach.

  • They’ve already completed most of the buying process by the time they talk to sales representatives, and 68% of B2B customers don’t rely on reps at all.
  • Earlier in the buying journey, unclear pricing and complex products make it hard for them to understand what they’re looking for.
  • Qualifying leads is much more difficult when B2B companies serve multiple customer segments.

Even after sellers find their ideal buyers, capturing their attention, learning their needs, and making a compelling case for their solutions is tough.

Sales cycle length kills deals.

When a prospect is ready to talk to sales, the stakes are amplified tenfold. According to a lead response survey from Drift, a difference of just five minutes can reduce your chances of qualifying a lead by 400%.

Most B2B sales take at least four months to close — by then, buyers may lose interest (or forget), key stakeholders could move elsewhere, or the company might reevaluate their budget.

B2B buying requires more than one approval.

The typical B2B sale has between six and 10 decision-makers, all of whom have different schedules, work in different departments, and have different levels of understanding of the product.

It is the rep’s responsibility to keep everyone on the same page, ensure they all have the information they need, and communicate product details and benefits in a way that each stakeholder can relate to.

Even if they can successfully move their prospects through the earlier stages of the sales pipeline, they often run into trouble once it comes time to close the deal.

And then there’s the paperwork.

Generating quotes, proposals, and contracts takes up valuable time even for seasoned B2B sellers — and that’s a major problem when they want to move their prospects through the pipeline.

The contracting process generally requires a lot of back-and-forth, and with so many different stakeholders needed for approval and buy-in, it can take weeks (or months).

Particularly in companies with complex product offerings (e.g., B2B ecommerce), inaccuracies in the quoting process are another concern for reps managing multiple leads.

Most sales reps are quick to agree on a price and get the deal done. But if buyers see discrepancies in their quote or contract later on, they can become suspicious of the seller’s intentions, which can easily backfire and derail the entire process.

Personalization is still paramount.

In spite of the inherent difficulty that seems to come with the territory, B2B buyers still expect personalized experiences across the board.

Relative to the entire buyer experience, reps have very little hands-on time with their customer. But nearly all prospects expect the companies they buy from to understand their needs and recognize them as individuals, according to McKinsey research.

In the limited time buyers and sellers have together, sellers must deliver personalized offers that hit the nail on the head every time.

Amplifying Success With CPQ

B2B sellers juggle multiple stakeholders for each of the several deals they’re working at any given time. Given the limited time they have with their prospects, the only way to make the most out of sales opportunities is to become more productive.

CRM and sales enablement tools drive sales productivity by automating data entry, getting the right content to the right customers, and visually moving buyers through the sales pipeline. But they don’t do much for the most critical source of sales cycle inefficiency: the configure, price, quote process.

That’s where CPQ software comes in — it simplifies and automates product configuration, price estimation, and quote generation.

10 Ways CPQ Helps B2B Sales Teams Close Complex Deals

1. Increases Quote Accuracy

Multivariate sales quotes (like those typical in B2B sales) require sellers to sift through product details, calculate pricing, and modify terms based on individual customer requirements. Even if your quotes are accurate 99% of the time (which they aren’t), you’re leaving money on the table.

Companies that use CPQ don’t have to worry about the numbers. Since all product data is put into the system during CPQ implementation, the software instantly generates accurate quotes by pulling from its information repository.

2. Shortens the Sales Cycle

With the average sales cycle lasting several months, there are plenty of opportunities for deals to fall through the cracks.

  • Key stakeholders change roles or move companies
  • Buyers reevaluate their budgets
  • Structural changes obscure the initial request
  • Longer times between lead responses and quote delivery cause buyers and sellers to forget

CPQ enables reps to create, send, and manage quotes quickly — often in less than 10 minutes. And that’s including time to triple-check the details.

3. Reduces Sales Rep Ramp Time

Onboarding a new rep takes three months on average. But most of that time is spent learning about products and pricing.

CPQ helps reps hit the ground running with guided selling workflows based on product and customer data. Those first few sales calls are awkward, but CPQ takes some of the guesswork out so reps can start selling effectively in less time.

Companies that put their sales playbook into their CPQ software can further reduce ramp time by keeping all their training materials in one place.

4. Greater Efficiency Through Automation

B2B sales reps spend less than 30% of their typical day on actual sales activities, underscoring the dire need for automation.

Although several kinds of software automate different elements of the sales process, CPQ stands out as a tool for streamlining the time-sensitive customer-facing processes that directly lead to revenue.

Plus, it integrates with your CRM, sales enablement, and RevOps systems, further enhancing your companywide data flow and improving future sales operations.

5. Enhances the Customer Experience

If you want more Closed Won deals, your reps have to make the customer experience more personalized and frictionless.

Out of every four B2B buyers, three say their last purchase was either “difficult” or “very difficult” due to the complexity of the process.

There’s a great deal of irony here: Even when a prospect wants to buy something, the vendor’s internal processes stop it from happening. Even if the deal goes through, a negative purchase experience erodes customer satisfaction.

CPQ helps eliminate the complexity of B2B buying by enabling reps to create product bundles for customers in just a few clicks. It also suggests add-ons, helping reps deliver more value to their prospects.

6. Higher Sales Team Productivity

With so little of their day spent selling, it’s (by definition) impossible to call the average sales team “productive.” This presents a twofold issue for B2B businesses:

  • Salespeople want to make sales, and inefficient internal processes lead to burnout, dissatisfaction, and turnover.
  • Companies need to grow their revenue, which they can’t do without a productive sales team.

CPQ boosts productivity by removing the manual, time-consuming processes associated with product configuration and pricing. Rather than spending hours writing a new proposal for a promising lead, they can spend ten minutes on it and get back to prospecting, outreach, and delivering product demos.

7. Geared for Omnichannel Selling

The shift to omnichannel has dramatically and permanently transformed the way B2B companies do business. New McKinsey research found that 70% of buyers prefer to do business completely remotely while the overwhelming majority (97%) are mostly interested in self-service options.

CPQ software helps reps consolidate customer and product data from all sales channels (including direct, ecommerce, resellers, etc.) into a single repository. This enables B2B companies to service customers faster while keeping accurate records of the interactions that took place across each channel.

For B2B vendors selling physical products — like manufacturers and wholesalers — integrating CPQ with the company website means new and current customers can use its product configurator right in their self-service portal.

8. Enables Selling for Complex Pricing Models

B2B customers expect quotes to be tailored to their unique requirements. That’s a challenge if you’re selling products with complex pricing models — like pricing tiers, subscription plans, enterprise packages, and usage-based billing.

Any time reps have to do manual calculations, there’s a real risk of misquoting and losing out on the sale.

CPQ software simplifies pricing by breaking it down into individual components. Once you’ve put your pricing data and contingencies into the system, you can create custom quotes based on a customer’s selection while automatically adding any applicable discounts or surcharges. Thanks to its pricing engine, this process happens in real-time.

9. Facilitates Selling Complex Configurable Products

CPQ stands out from other sales tech because it’s designed for products and services with multiple options. That can range anywhere from software suites to custom machinery — anything requiring a customer to select product features and receive an accurate price quote.

Complex configurable products also require detailed technical specs and implementation details, so CPQ helps reps keep track of every single variable in the sale. That includes product specs, warranty information, and after-sales services like setup and installation.

10. Improves the B2B Selling Experience

When the sales process is more efficient, and reps can focus more on selling, it’s a win for everyone involved. CPQ software makes B2B sales less of a headache by making their lives easier and increasing overall sales performance.

Key CPQ Features for an Unstoppable B2B Sales Process 

Integrations

(Integrates with ERP, CRM, Billing, eCommerce)

CPQ software solutions offer various native integrations, depending on the type of businesses they serve. Among the most critical integrations for any business include:

  • ERP. Manufacturing, distribution, construction, healthcare, and professional services businesses use ERP software to unify their supply chain, HR, finance, services, and procurement operations. ERP and CPQ work together to automate product pricing and inventory updates.
  • CRM. Without CRM, sellers can’t sell. Integrating your CRM with CPQ creates a single source of customer data that both systems can use together to create personalized quotes, track each sales touchpoint, and ensure full sales pipeline visibility.
  • Billing. Billing software on its own can’t give you the comprehensive customer insights needed to close deals. When connected with CPQ, billing helps you create flexible payment plans and offers customers an easy-to-understand view of their invoices.
  • Ecommerce. No matter what type of product or service you offer, having a website allows customers to configure products on their own. When integrated with CPQ, customers can configure and buy products from your website for a frictionless omnichannel purchasing experience.

Guided Selling

In CPQ, guided selling workflows work something like this:

  1. The seller creates a prompt that asks customers to select their product configuration.
  2. Based on the customer’s selections, the software presents them with additional options and pricing information.
  3. Discounts and add-ons are automatically applied.
  4. Upon approval, a sales quote or proposal is generated.

Traditionally, this is an hours-long process that includes multiple steps with manual effort. With CPQ, you can find the best solution for a customer in minutes.

Visual Configurators

Visual product configurations are essential to any B2B organization, but especially for manufacturers, medical device vendors, and other company verticals with high product complexity.

PROS Smart CPQ offers the most powerful visual configurator on the market, complete with an AI engine and website integration capabilities. B2B vendors selling complicated products benefit most from this feature, as it lets their customers see components in 3D models to better understand the custom solution they’re buying.

Subscription Management

Subscription management is sometimes a separate platform, but plenty of CPQ solutions offer it as part of their product suite.

B2B subscription businesses need a platform to manage customer contracts, subscriptions, and billing complexities in one straightforward UI. DealHub is an example of a platform that does exactly this, helping subscription companies automatically calculate costs and ensure customers are paying for the correct services at the right times. 

Analytics and Reporting

On its own, CPQ is more of a source of analytics data than a reporting tool. This is why it’s so important to choose the right CPQ software provider with built-in reporting and analytics capabilities.

Salesforce CPQ, for instance, offers a full suite of analytics and reporting tools, including custom dashboards that give you a 360-degree view of your sales pipeline. For enterprise users who connect to the whole Salesforce ecosystem, that data can be used to calculate customer lifetime value, forecast future sales, and evaluate internal sales processes.

Easy to Set Up and Maintain

CPQ should be easily configurable and require minimal maintenance. This means it should be cloud-based, so you don’t have to worry about server maintenance or costly upgrades.

It also needs to offer support for multiple implementation methods — from native integration with your existing IT infrastructure to a stand-alone platform that requires nothing more than a web browser and login credentials.

Enables Team Collaboration

Collaborative selling results in better overall sales performance and customer satisfaction. CPQ shouldn’t just support individual sales efforts, it should enable collaboration between the entire sales team.

Sales teams should be able to view customer profiles together, share quotes and proposals through a unified platform, collaborate on deals in real-time, and access past conversations with customers whenever needed.

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CPQ Integrations
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