Author: Paul Trozan
Author: Paul Trozan, Analyst
If your company is like most businesses, you can’t always directly raise prices to increase your margins. Instead, you work to reduce your costs by being more efficient and improving the customer experience, or by selling more products/services. SAP CPQ can help you with both of those by automating workflows and making your sales cycle faster. Take a look at the return on investment that current SAP CPQ customers see in their businesses:
- 5% increase in total revenue
- 19% higher lead conversion rate
- 26% more reps achieving quota
- 27% shorter sales cycle
- 49% more quotes sent per rep
These vital statistics are averages across industries and directly increase your revenue or profit margins. To achieve numbers like these, there are seven main ways that CPQ can help.
1) Quick and accurate quoting with approval and workflow automation
A great way to distinguish yourself from the competition is to be quick and responsive to your customer’s needs. When using spreadsheets, the quoting process can easily take days or weeks, and still see an error rate of 3-8%. Kill two birds with one stone by using SAP CPQ to reduce the error rate to 0.1%, and the quoting time down to minutes. Additionally, since everything is automatic with CPQ, the need for large groups of administrators with an army of spreadsheets is significantly reduced.
Making sure you have all the necessary approvals from the relevant people can take a significant amount of time. CPQ allows you to automatically trigger email notifications to the appropriate people who can complete the authorization over their mobile device. With embedded ‘Approve’ and ‘Deny’ buttons directly in the email, users can reply to the request in a click of a button.
2) It’s easy to use and administer
According to data shared by SAP, companies can take up to 6 months to fully train a new sales rep using the old methods of spreadsheets and manual processes. SAP CPQ's user-friendly interface decreases ramp-up time so the sales team can start moving the needle faster. Real-time guidance can be built into the system to help users choose the right product, and rules can be set up to eliminate irrelevant options based off of previous selections. Also, the interface can be customized for each type of user, whether it be an internal sales rep, reselling partners, or even the customer themselves. Each user type can have their specific branding and permissions. These features create a world-class customer experience.
In addition to the easy-to-use front-end, administrators using SAP CPQ can make most changes with minimal training. The intuitive system makes it easy to accomplish tasks such as updating products/pricing, adding new promotions, and managing users with the point and click interface. Having ever-expanding and straightforward admin functions allows business users to maintain the system without having to hire a highly technical operations person to cover this position.
3) The software can grow to fit your business needs
SAP CPQ is built to handle the scaling challenges that many large enterprise companies face such as custom pricing per user type or the ability to add additional products to the catalog at any time. Discounts and promotions can be automatically applied to any number of products and are quick and straightforward to set up and maintain. Additional fields can be easily added to the shopping cart or quote as your business grows.
Many companies have to re-design their back-end systems when expanding to the global marketplace. It’s not easy to convert everything into an entirely new language, yet keep the interface flexible. Not only does SAP CPQ demonstrate its flexibility with over 24 standard languages, but it can also handle multiple currencies, markets, taxations, and pricebooks out of the box.
4) Seamless integration with your front and back end
From connecting to your CRM, ERP, and payroll, SAP CPQ has you covered. Not only is there a built-in integration with SAP’s own CRM (SAP C4C), but connections with other top players such as Salesforce, Microsoft, and NetSuite are built directly into the system. Don’t use any of those CRMs? Canidium can use the robust API to create custom mappings to other CRM vendors. CPQ also integrates with your company's ERP back end, including commissions, payroll, inventory systems, entitlement management, and analytics services - seamlessly.
To cut down on the hours you spend tediously red-lining contracts, CPQ has built-in integration with SAP's Contract Lifecycle Management (CLM) solution. Using a CLM system is shown to increase customer renewal at a whopping 73%, while at the same shortening the entire sales cycle by 25% and decreasing contract errors. If you're aren't using SAP's CLM, then you can integrate with other CLMs via the robust external API that CPQ provides.
5) Guided, Cross, and Up-selling
Cross and up-selling are great ways to increase revenue and maximize value for your customer. It is imperative that these opportunities are baked directly into your selling software and are automatically triggered - otherwise, you’re unwittingly leaving dollars on the table. Guided selling can help both sales reps and customers filter down to the desired product. CPQ can then automatically suggest cross and up-sell opportunities and allow discounts to help close the sale.
6) Margin-protected guard rails with complex pricing models
Not every company has a straightforward pricing structure. Luckily, CPQ can handle the complexity stemming from multiple sales channels, selling to different countries, bundling products, and more. It supports interactive pricing for non-recurring as well as recurring pricing structures, and prices are adjustable for each customer at every level of granularity - whether it’s the entire order or down to a specific line item. Your company can also utilize multiple pricebooks and custom pricing tables to fit your business needs.
With all of the flexibility, it’s essential to keep an eye on the big picture - company margins. Do you have sales reps repeatedly asking for approvals due to high discount amounts? Wish it was easier for approvers to have direct insight into the margin of every particular item? Cost information can be stored directly inside of SAP CPQ allowing the software to display the margins for each item or the total order. If you don’t want sales reps to see the exact numbers, a margin-health indicator can tell them the margin of the product using a green/orange/red scale based on criteria that you set. Having visibility into the product and quote margin allows sales reps and managers to make better decisions around discounting and can significantly increase your company's revenue.
7) Very customizable reports and dashboards
Many companies collect thousands or even millions of data points, yet aren’t getting the insights they need from them. You can use the powerful reporting tool in SAP CPQ to build customizable reports to see overall quote value, track the number of quotes and their statuses for your sales reps, find abandoned carts, and more. Put multiple reports into a dashboard to monitor all of your KPIs at a glance. Knowledge is power, and these insights are vital for making actionable ideas to improve your business model.
The Bottom Line
If you're looking for a CPQ software that contains the seven qualities mentioned above, then SAP CPQ is the right solution for your business. Canidium has implemented top-notch CPQ solutions for clients in the insurance, finance, healthcare, telecommunications, technology, manufacturing, and retail/service industries with great success. If you’d like more information on why SAP’s CPQ technology is right for you, ask for a free consultation. We’d love to tailor a solution just for you!
For more information about our work with CPQ, visit, https://canidium.com/sapcpq/.
Want to receive more thought leadership? Opt-In to our newsletter below!