To win deals, it is important to estimate the price quickly and accurately and share the quote with the prospect. A CPQ solution helps you streamline and automate this process.
Professional Services have a unique challenge in servicing clients. There is no standard product to offer that comes with a standard price. The needs of every client, even those in the same industry and vertical, are different. That means you have to estimate the price for each project individually.
Some of the aspects you need to consider when deciding the price are:
- Time needed to complete the project
- People who will be working on the project and their billing rates
- Profit margins for a specific price estimate
- Budget of the prospect
- Quotes generated by competitors for the same deal
The immense pressure to close the deal can lead to quotes that lead to wafer thin margins and in some cases losses to the business. That is why it’s important to have an efficient Configure-Price-Quote (CPQ) solution.
Why Professional Services firms need a CPQ
What comes to your mind when you hear the words “sales team”? Do you imagine an energetic bunch of people on calls with clients each day? While it would be nice to have their time and energies spent on networking, building relationships, and making sales, the reality is slightly different.
Sales teams in Professional Services firms spend a good part of their time working with the projects team to get a quote that is good enough to hit the profit margin targets and at the same time low enough to ensure the deal is closed. Then there is the work of creating the proposal and other associated documents. In smaller business the sales team also work on their Power Point presentations.
There is a lot of work that happens behind the scenes and the sales teams also need to work with different teams to get the required approvals. In different friction points of this process, there are many things that can go wrong, and the sales team ends up losing the deal.
How CPQ can help your sales team
If your sales team is following a manual process, where the salesperson or a few people take the decisions on choosing the price, discount, and the consequent profit margin, you need a streamlined process with a CPQ solution to help your business generate a fair price.
What does an optimized process look like? Your sales team should have all the information they need for their discussions with the client and the projects team should have quick access to all the information they need to estimate price accurately.
If you have a complex pricing rules structure and all that information is stored in Excel, then finding the right Excel and going through all the columns and rows to make sense of the data can take too long and there are higher chances of human error.
A CPQ solution will have pre-configured rules and different permutations and combinations for the team to experiment with. These rules are saved in the form of templates that make it easy to understand and deploy.
The whole process that used to take days with multiple emails, chat messages, and calls, can be completed in a manner of minutes. The streamlined process will not only help your team create the quote quickly, it will also help the sales team close the deal faster by sharing the quote quickly.
What are the benefits of CPQ?
There are many benefits of implementing a CPQ solution.
- Faster and accurate quotes that are created using your configuration rules
- Improved deal closer rates with shorter sales cycles
- Increase in number of quotes sent in a month
- Process automation options to take on more complex projects
- Single source of truth to access all data related to pricing of projects
With technological innovations happening at faster rate than ever before, Professional Services firms need to find ways to catch up and gain that competitive advantage. CPQ is just one of the many tools available in the market.
Growing businesses should consider implementing Professional Services Automation (PSA), Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Human Capital Management (HCM) solutions and integrated all of them to build a connected, thriving business.