April 28, 2017

How CPQ Software Can Improve Sales Success

Written by
Lou Washington

Back in 1975, I graduated from college into a $4,900/year job preparing documents for microfilming. At the same time, my best friend left academia to start with IBM as a sales trainee. My training took roughly 20 minutes. Within half an hour, I was productive, pulling staples and planning my retirement. My friend’s training was a bit more involved. Most of his first year with IBM was spent on an IBM training campus in a classroom. My recollection is that he finally went on quota and started making solo calls about one year following his hire date.

ALSO READ: Building a Quote-to-Cash Process

Today, very few, if any, companies can afford to hire sales reps and keep them benched for a year. I ran across a blog post from Jeremy Miller of Stickybranding.com dating from 2012.  The message in the article is that traditional sales training was still built around those classic programs developed by IBM, Xerox, and a few other heavyweights of the ‘70s.

That training model cannot realistically be sustained today.

Not Just New Hire Training

Sales training is shifting. Today, competitive companies need to onboard new hires and get them productive as soon as possible. And yet, the impact of training is felt far beyond the new-hire stage.

Every year, marketing and sales teams review their previous-year’s performance and roll out new pricing strategies, campaigns, and promotions to fill gaps from the previous year. These changes can require extensive training and explanation. The whole sales force may well be involved.

It doesn’t end there. Product management and engineering teams add new products and modify existing ones to address new markets, new applications, and to improve opportunities in existing markets. These changes impact pricing parameters, performance, and usage specifications.

All of that creates a knowledge deficit for the sales team, which requires additional training.

Obviously, training costs will vary, but if you’re pulling your sales team out of the field and bringing them in for sessions and meetings, the travel cost alone can be high. A 2014 piece in Forbes estimates that it costs $100,000 to hold a meeting with 25 reps for three days in the U.S. This does’t even include the cost for a facilitator and a venue. 

But think about this: while your reps are cooling their heels in sales training, your competition is still out there knocking on doors, dialing the phones and talking to your customers. So add to that the cost of lost opportunity.

While your reps are cooling their heels in sales training, your competition is still out there knocking on doors.

Your sales reps each have a goal or quota for the year. If that quota stays constant, but the time allowed to fulfill it drops, it’s much more difficult for reps to succeed.  

CPQ Keeps Your Sales Team Selling

Most configure-price-quote software products help sales immeasurably by putting expert knowledge into the CPQ application that automates the technical aspects of selling. All of the esoteric knowledge required to choose and configure products, options, and prices is baked-in to a single system. That functionality is backed up by the ability to generate high-quality quotes and proposals on demand.

No need for rote memorization of specifications and prices. No time-consuming quotation process.  

This same capability minimizes the training time needed to make the rep productive. It speeds the implementation of pricing adjustments and automates special campaign promotional programs. Here’s how:

1. CPQ for New Hires   

When the time comes to hire new reps, HR teams work with sales managers to isolate traits and skill sets common to successful members of their current sales team. But no matter how well the candidate performed in previous positions, the new job will require lots of learning.

Nothing destroys credibility faster than trying to converse about an unfamiliar subject. New reps must become familiar with your product, how it is packaged, the options available, the industries you sell to, and finally, pricing options. They can acquire this knowledge by doing “ride-along” sales calls for a year, or you can use a configure-price-quote software solution to speed the process. 

Nothing destroys credibility faster than trying to converse about an unfamiliar subject.

Scripting within the CPQ software gives reps a series of questions to ask the prospect or enter manually. These questions reveal specifics about the prospect’s needs and how they relate to available choices within the product line. 

A sales rep with basic knowledge can work through the scripting with the prospect in a conversational manner to identify specific requirements and address needs. Pricing automatically follows.

At the end of the consultation, the CPQ software generates a quote — or, if justified a proposal.

2. CPQ for New Strategies and New Products

We talked earlier about the cost of bringing in your sales team for three days to learn all the specifics associated with a new strategy. Frequently, this type of training is associated with incentive programs designed to move an existing customer off of an old product and onto a new one. In the software industry, we refer to this as an upgrade path.

Most of the time, upgrade path programs offer special pricing limited to a certain type of customer (e.g. a business that uses [X product] and has been a customer for at least one year). 

CPQ tools are especially useful for building these qualification conditions into the consultation script. Similarly, you can apply the special pricing based on answers to your qualifying questions.

This level of automation can essentially remove the necessity of bringing everyone in for a new training. That $100,000 stays in your pocket, your reps get the message out sooner and more effectively, and you upgrade more customers.

That same logic applies to new products as well. Even if some classroom training is required for your new offering, you can use a CPQ solution to streamline your go-to-market process.

3. Success Is Easier to Replicate

When I was in sales, many of our team meetings focused on reviewing successful sales cycles. The goal was to find elements in those transactions that we could build into our overall strategy. While sales reps are not and should not work like robots, it is important for them to stay consistent with message, pricing, and application of a solution to a given problem. CPQ helps facilitate consistency in all three of those areas, from initial consultation all the way to proposal. 

This is about as close as you can get to making the sales process repeatable.   

* * *

CPQ software keeps your reps in the field, on the phone, and out of the conference room. It helps sales reps focus more of their efforts on selling, rather than trying to memorize a product catalog. Cross-selling and upgrade selling are also easier to facilitate when the CPQ solution is automatically seeking those opportunities through qualifying questions and prospect data. 

All that’s left for the rep is to make an intro and ask for a signature.

Lou Washington is a blogger and senior writer for Cincom Systems, a provider of CPQ, CCM and other business technology solutions. Lou draws on his combined 45 years of manufacturing and business technology experience to offer businesses insight into improving their most critical processes.