As the economic recovery continues, we’re slowly starting to see growth around the world. And growth is indeed the mandate if your business has been hit hard in the past 2 years. However, growth can be hard to manage if you have old or outdated processes in place; to manage it you might want to consider using Configure Price Quote (CPQ) technology. This powerful tool helps your sales team become more efficient and productive, driving more deals through the pipeline and increasing sales velocity.
But first, what is CPQ?
CPQ is a software platform meant to optimize all selling and buying interactions. Let’s take a quick look at each word in the tool’s name.
Configure: the configure part of CPQ software enables sales teams selling complex products to quickly configure (build from a catalog) the right product offerings to meet a customer’s needs.
Price: backed by pricing science, this aspect of a CPQ tool can assure the best pricing is included in every quote. A properly designed and easy to maintain CPQ system can provide positive ROI based on pricing improvements alone.
Quote: this component delivers a professional, well organized quote document, quickly.
Now that that is understood, here are three ways CPQ improves efficiency to keep your sales pipeline moving:
Fast quote generation
A salesperson only has so many hours in the day, and many would tell you that getting quotes out is highly time-consuming. When you use a CPQ solution, it increases sales productivity by accelerating the time to build a quote. 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 complex, configurable products. So you’re looking at almost a 40 percent productivity increase for quoting products that are probably quite complex.
Reduced number of interactions
To move deals through the pipeline, reps need to be faster and more efficient 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 first 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 efficiency, 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, figures 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.
Shortening the sales cycle
Companies that use CPQ solutions (over using only a CRM), 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.
If all that data doesn’t strike you as significant, then consider this: a CPQ solution can increase the average deal size from 211K to 432K.
If your company is entering a growth phase, it’s essential that you find ways to increase velocity and be productive at every stage of your sales cycle. By reducing the number of interactions and adopting a fast quote generation process, you shorten the sales cycle and ensure that your sales reps are highly efficient and effective. CPQ solutions improve efficiency at each touch point, making sure that those opportunities are constantly moving forward.
Ready to learn more about using CPQ to improve your sales process and productivity? Connect with us here about how CPQ can skyrocket your business.
About PROS: (NYSE:PRO)
PROS is one of the best kept secrets for profitable growth. For over 35 years, we have been uniquely positioned in the tech industry offering the world’s only AI based platform that helps businesses grow their margins and revenues. With more than 20 patented AI algorithms and 30+ million AI models, the PROS Platform is powered by advanced AI science that continuously delivers actionable insights based on the unique conditions of every buying engagement. These insights give companies more visibility into market volatility and allow them to rapidly adjust prices and quotes in response to real-time market shifts, feeding daily decision making and supporting longer-term business strategy and profitability. PROS AI is the driving force in updating more than 400 million prices and 1.7 billion forecasts daily in more than 30 industries around the globe.