There aren’t many areas in business where processes used to save money and maximize deal sizes also result in a better customer experience. The exact opposite is usually the case — the drive to save money by making an internal process more productive or to increase the amount being sold to the customer usually impacts the customer experience for the worse.
A notable exception to this is configure price quote, or CPQ, software. Usually employed by larger companies when deals are complicated or involve a varied product mix, CPQ traditionally has been a go-to-technology in industrial equipment manufacturing.
However, as other industries’ selling operations became more agile, and as SaaS has helped bring down prices, CPQ has gained a foothold in high-tech, telecommunications, life sciences and healthcare, according to Gartner.
Good for the Seller
CPQ automates the process of developing custom quotes — providing workflows to guide quote creation, suggesting upsell possibilities and bundles of products, establishing discounting rules to protect margin, and putting the right content about products in sales reps’ hands exactly when it’s needed.
All those things result in a lot of positive effects for the seller, according to Aberdeen, whose 2013 report suggested a tremendous return on a CPQ investment. Companies using CPQ saw a 105 percent greater average deal amount than companies without it; sales cycle lengths were 28.8 percent shorter, lead conversion rates were 5 percent higher, and margin protection was 23 percent better.
For sales people, the numbers were similarly rosy. CPQ solutions reduced errors on quotes by as much as 40 percent, allowing deals to move faster. Similarly, the average number of quotes per month, per sales rep went from 14 to almost 21 per month.
These are all internal productivity numbers, you might say. As great as they may be, in the age of the customer, who cares about these internal measurements when we should be focused on the customer’s experience, not on that of our sales reps?
Well, here’s the good news: By creating a more frictionless buying experience, CPQ makes the B2B customer buying experience far better.
Great for the Customer
Let’s start with that sales cycle number. Part of the reason for that 28.8 percent greater speed can be attributed to automated approvals, which offer a significant customer experience upside.
Sales reps no longer have to tell customers they need to seek approvals to finalize deals and then vanish for 24 hours. They can get a yes or no based on managerial criteria built into the CPQ solution. Instead of days, the wait is minutes — and if a deal can’t gain approval as written, it can be revised and resubmitted quickly.
Error reduction, as simple as it sounds, also enhances customer experience. It’s easy to make mistakes doing repetitive things like manually creating quotes, and every un-caught mistake has a potential detrimental effect. For the seller, a mistake can impact margin. For a buyer, a mistake can mean a delay in getting the deal done. By automating many of the repetitive tasks, CPQ can squeeze out more errors and reduce customer frustration.
When reps can provide the right content right away, without a need for research on their own, customers are far more likely to feel informed about their purchases. The old way of doing things — with reps offering to “email that stuff to you when I get back to the office” — simply does not fly, especially since it often leads to nothing ever being sent to the customer. The customer experience improves when the sales rep comes off as authoritative and organized.
The net effect is that deals are completed faster, by reps who seem more organized, and with a minimum of errors.
Time on Your Side
CPQ takes much of the friction out of the process of buying — and when it comes to a B2B selling experience, that’s exactly what you want. Friction in the sales process adds time and delays to deals, and if your customers can get a more frictionless experience from your B2B competitor, they are likely to defect.
By removing the friction from the deal, CPQ has the effect of making customers more likely to buy from you again in the future.
Seventy-one percent of customers in a recent Forrester poll said valuing their time was the most important thing a company could do to provide them with good service. Using CPQ results in more time being returned to your sales reps to sell, and it also means more time returned to your customers to do their jobs, too.
All of that combines to make CPQ a potent customer experience secret weapon — it’s just masquerading as a productivity and margin-building tool.