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How Can a CPQ Solution Create a Competitive Advantage?

How Can a CPQ Solution Create a Competitive Advantage?

Kevin Geraghty
02. Feb 2021 | 7 min read

How Can a CPQ Solution Create a Competitive Advantage?

To gain a competitive advantage, you must change the way you think about your sales process – moving from a push to a pull strategy. Adopting CPQ software will help facilitate this shift.

It has always been an accepted principle in progressive companies that they must positively differentiate themselves from competitors in order to secure a competitive advantage and grow profitable sales. Buyers simply want enough information to make an informed decision, quickly. 

Speed and quality of response is one way to help differentiate further. 

It is also a widely accepted view that there is frequently a concurrent opportunity to improve sales processes and reduce the cost of sale, as part of such a differentiation process. 

However, it is difficult to stand out from the crowd when everyone is tweaking the same factors. Read on to learn how shifting your sales approach and implementing CPQ software can help you achieve and maintain a real competitive advantage.

The B2B buying process has changed

In 2021, your buyers no longer rely upon your salespeople to inform them before they make a decision to buy. The ready availability of quality information through digital channels has made it far easier for buyers to gather information independently.  

Customer relationships increasingly begin, and flourish, with little or no human interaction, meaning sellers have less access and fewer opportunities to influence customer decisions – particularly in the early stages, where shortlists are being prepared.

McKinsey estimated that in 2020, 85% of the customer’s relationship with an enterprise will occur without interacting with a human. Technology is both driving and facilitating massive change to the way we buy. Consequently, selling practices must adapt if a company is to survive.

It has never been easier for startups to disrupt markets. And it is easier than ever for people to find these new companies and buy from them, increasingly with little or no human interaction. Buyers now expect:

  • Processes that focus on them, not on selling.
  • Faster reaction to market conditions.
  • Friction and unnecessary cost to be removed.

As entrants build disruptive businesses based upon these customer demands, companies that do not change will begin to lose market share to the new competition. 

Regardless of how fast change occurs, the new ground for competitive advantage is to be found in today’s B2B buying journey.

Gartner research finds that when B2B buyers are considering a purchase‚ they spend only 17% of that time meeting with potential suppliers. When buyers are comparing multiple suppliers‚ the amount of time spent with any one sales rep may be only 5% or 6%.

The experts in this kind of buying behaviour are probably not in your sales teams but within your IT and Sales Operations teams. These professionals understand the problems and the opportunities for change that technology can bring. Channelling this knowledge and embracing their ideas for new ways to be better will enable you to outperform the competition.

Don’t sell, get bought

To gain market share from brands that fail to adapt to new business conditions, you need to...

  • Offer greater flexibility around your products and services to better meet your customer needs – faster.
  • Make it easier for your customers to buy from you.

To achieve this consistently, your organisation needs to become more agile and nimble. Technological advances and specialist web applications that can be integrated faster and easier will help. Those in the know are using this to drive new ideas for sales process and performance gains – cost-effectively. This is why IT and Sales Operations teams are increasingly influential in driving revenue growth and cost reductions.

You don’t have to replace your existing IT

An increasing number of sales teams realize that their market opportunity requires them to build configurable, multi-option, inter-dependent product and service portfolios. At the same time, traditional CRM, ERP and eCommerce systems are not fully meeting their business and operational needs. 

CRM software, for example, when effectively deployed, enhances the ongoing sales process by improving the management of opportunities, and encouraging repeat orders. Effective CRM also enables the delivery of higher levels of after-sales service and provides increased automation and consistency levels. 

However, while CRM systems are generally adequate for creating straightforward quotes and proposals, when used by organizations that have a requirement to price highly tailored, complex, interdependent products and services, shortcomings become apparent. 

Does this mean you have to introduce a costly new CRM system or upgrade your legacy ERP system? 

No. Rarely will this enable the competitive advantage and sales growth demanded. Instead, you can leverage existing investment by implementing specialist web-based applications that plug gaps and extend functionality. And they are being introduced at much lower risk, faster and with a higher return on investment than larger IT projects.

Read more: Don’t replace your CRM or ERP. Enhance it!

Adopt CPQ

The quickest way to gain a competitive advantage is to shift from an internal sales-centric approach to looking at what encourages and helps your customers to buy from you. Then implement a specialist solution that builds upon and enhances your existing systems yet enables the significant changes necessary to achieve your business objectives. 

One of the most effective solutions to enable new ways to differentiate is CPQ.

CPQ software solutions plug into existing CRM systems. They also offer basic CRM functionality where there is no existing system to plug into. Importantly, they enable an organisation to begin a transformation; automating and speeding many tasks. At a high level, it will allow you to enhance your process for:

  • Tailoring products and services to the exact needs of customers. (Configuration)
  • Calculating prices and margins accurately with zero errors. (Pricing)
  • Presenting the offer and negotiating the sale faster. (Quoting)

A good CPQ solution will remove the shackles of an existing CRM and ERP system, freeing your organisation to extend its thinking and reach across the entire ‘Quote to Contract’ process.

Read more: What is CPQ?

Conclusion

When looking for a sustained competitive advantage in the new reality of sales, you need to shift your mindset and approach to selling:

  • Put your emphasis on the buyer rather than the sales teams.
  • Review and re-engineer the whole sales process.
  • Adopt CPQ software to realise your ambition, fast and with low risk.
  • Understand that IT and Sales Operations departments are often the key to helping an organisation leverage these new possibilities to differentiate and grow sales profitably.

If you are serious about gaining a competitive advantage, then it might just be the right time to embrace Sales Operations and IT thinking into your sales strategy and process.

Kevin Geraghty

Kevin Geraghty

Kevin's passion is helping companies become easier to buy from. He is a pioneer and thought leader in CPQ (Configure, Price, Quote). Quick to spot how technology (in particular CRM and product configuration software) enhances sales team performance, he was instrumental in the development of cloud based CPQ applications. He co-founded BlueprintCPQ in 1999, and built this to become one of the most powerful and flexible CPQ platforms. BlueprintCPQ was acquired by Xait in December 2020 where Kevin is Head of CPQ practice and Managing Director of Xait Ltd where he continues to apply his innovative thinking and experience to drive sales efficiency.

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