With disruption accelerated by COVID-19, companies are facing increased volatility, uncertainty and complexity while also needing measurable revenue growth, improved efficiency and the ability to easily scale. To meet these demands, CFOs are focusing on recurring revenue models, business/digital transformation and overall customer experience, which are all impacted by the configure, price, quote (CPQ) process.
A recent survey by CFO Research looked at how recurring revenue business models are putting pressure on finance teams. The survey identified finance leaders’ main pain points, including these top six:
Automating the CPQ process (also known as the quote-to-cash process) can be an effective starting point for CFOs to solve these challenges.
Revenue is the life blood of business, and sales are the key driver. But many companies manage their sales using different versions of spreadsheets, which prevents sales teams from getting a single source of truth for their pricing data. This also hinders visibility into the guardrails around prices and discounts.
Products and services are often sold through complicated pricing structures, bundled packages or subscriptions. If your team uses manual processes and multiple files to conduct these types of sales, you waste time searching for files and information and increase your risk of lost revenue due to manual errors. You also subject your customers to a long sales cycle and a burdensome process that can incentivize them to switch to a competitor.
Once you complete a sale, there’s the challenge of managing renewals, contract amendments, and dynamic terms and conditions. This again takes your team away from core business tasks, increases the risk of errors and puts a burden on customers.
CPQ software helps you create complex quotes with different customizations around bundles and products, quantities and prices, and customer-facing documents and terms. With the whole CPQ process in one system, sales reps can generate quotes quickly and accurately. For example, using the Salesforce CPQ solution within the Salesforce CRM platform, sales reps can have a 360-degree view of customers, including their purchase cycles and geographies.
In addition, management of contracts and renewals is simplified with CPQ. If a client approaches you to cancel a product, for instance, you can quickly identify their order, how much it cost and what it will take to cancel or amend the contract by adding additional quantities or products. When pricing and discounting flow accurately from sales, the service team members will know exactly what support customers are entitled to, and the billing team understands exactly what and when to bill.
Having accurate pricing, discount and contract information can also enable your sales team to upsell or cross-sell products more effectively. They know exactly what they can offer a dissatisfied client to try to remedy a situation. This can make customers more likely to continue or increase their investment in your products – improving overall customer lifetime value.
A CPQ solution also improves coordination between your sales and finance teams and helps ensure accurate forecasting, as both teams can pull from a single source of truth and remain on the same page.
If you have questions or want to learn more about improving your CPQ processes, reach out to our experts.
