Problem#1: inadvertent quoting errors (AKA user error)
Businesses frequently complain about how user error impacts their bottom line. Often, we see businesses that have outgrown their software continue to use it despite its restrictions. Manual processes, specifically manual entries, are the number one culprit of user error. For example, countless businesses use Excel to support quoting functions, however, user error is rampant with this approach. Generally speaking, Excel users are not restricted from making changes to the spreadsheet (formulas, totals, discounts, etc.) leaving room for accidental changes or entries to be made to the quote. User errors sabotage the company’s bottom line because they can significantly reduce the margin on a given quote. Additionally, these mistakes can frustrate the customer and therefore compromise the customer experience. SAP CPQ eliminates common user error problems through user roles, guided selling, template document generation, and business rules (each to be discussed later in this article).
Problem#2: lengthy sales cycle
The quote-to-order process is a great place for companies reevaluate in order to reduce their sales cycle length. SAP CPQ features a guided selling tool that intelligently assists sales reps to find the products that meet their customers exact needs based on attribute selections within a particular product category. When using inadequate-or-outdated software, complex product offerings add a great deal of time to the quote generation process. Traditionally, we see sales teams stumble their way through disorganized product offerings only to generate a quote that the customer declines. By the time a quote has been created, that customer has moved forward with a competitor who was able to generate a beautiful SAP CPQ quote in a fraction of the time. As you can see, long quote generation times are largely responsible for lost business leads. SAP CPQ can generate a quote in minutes leaving other competing software’s in the dust.
We now live in a technical age where everything is expected to be accessible with the click of a button. Therefore, businesses can no longer meet customer expectations with outdated quoting software. With SAP CPQ guided selling, salespeople can quickly identify the product/service by narrowing down options based on selected attributes. Product attributes are nothing more than details that are specific to a product. For example, a car may have many different attributes such as mpg, number of cylinders, seating capacity, color, etc. Guided selling cuts down the quoting time making for an exceptional customer experience.
In addition to the above, often we see lengthy quote generation times linked directly to manual processes. Importantly, the longer a quote takes to process, the smaller the window of opportunity with a customer becomes. In SAP CPQ users have access to a robust library of company-specific templates which allows them to generate quotes with lightning speed from their shopping cart selections. Furthermore, SAP CPQ eliminates the need to manually enter information into a quoting template. Instead, information automatically populates from the shopping cart eliminating manual entries. Salespeople can easily configure and add products to their shopping cart and instantly generate documents based on their customer’s requests. Additionally, salespeople can easily make adjustments to their quotes and quickly send revisions out to their customers. SAP CPQ reduces the quoting process from days to minutes ultimately helping to cultivate the desired customer experience.
Problem#3: over discounting
Over discounting is a legitimate cause of profit loss for many businesses due to a lack of visibility and control over discounting. Remember, the important number is what you keep (profit), not always what you earn (revenue). Without control, a company’s users may unknowingly apply discounts that exceed product discount limits that eventually impact the bottom line. SAP CPQ user rules work to prevent unauthorized users from exceeding a set discount threshold. An approval triggers when a user violates company defined discount rules, to stop them from applying an incorrect discount. This is especially important for companies that work on a tight margin. Discount rules provide guardrails for sales so that the limit is not unintentionally exceeded, and the product margin is protected.
Interestingly, over discounting can potentially set future customer expectations to an unrealistic, unsustainable standard. For example, if a customer is provided a deep discount by sales person A but is then denied the same discount by sales person B, their experience will automatically turn negative. Based on prior discounts given, customers will may come to expect a discount on each sale. Therefore, discounts should be thoughtfully applied and controlled with user permissions and approvals. When a company defines discount parameters, approval rules can prevent salespeople from applying discounts over a certain threshold, thus preventing the possibility of setting unrealistic customer expectations. SAP CPQ automatically triggers an approval request once a discount exceeds a company predefined threshold, which escalates the approval to the correct personnel for review. SAP CPQ removes the guesswork out of discounting by guaranteeing salespeople apply discounts in uniform compliance with company policy.
Problem#4: missed cross-sell and upsell opportunities
Missed cross-sell and upsell opportunities directly hinder revenue growth within a company. These missed opportunities can result from complex pricing structures that lack backend support, as well as insufficient user interfaces. Companies with complex pricing structures and product offerings, need to better support their sales teams by simplifying the process. SAP CPQ’s guided selling supports cross-sell and upsell activities. SAP CPQ supports sales teams by effectively recommending more expensive and/or complimentary products/services. Guided selling increases sales success rates with intelligent hyper-targeted customer cross-sell and upsell recommendations. To take it one step further, SAP CPQ can also automatically trigger cross-sell and upsell opportunities making it an easy to use, natural step in the selling process. Therefore, SAP CPQ empowers salespeople to maximize each sales opportunity.
Interested in learning more about how SAP CPQ can take your quoting to the next level? Contact us at ASAR America. Connect here: https://asardigital.com/connect/. For more information about SAP CPQ please visit: https://www.sap.com/products/cpq.html?btp=cf7bcc41-f2b9-41c4-99c3-a68ba0550247