Win More Deals at Higher Margins

Let’s imagine your ideal pricing. It factors in your opportunity value and maximizes your margins. It is a key component of your bigger profitability picture and therefore must be in line with your revenue targets. The problem is, your ideal pricing is far too elusive and open to interpretation, bias and error.

As a business leader, you have an important decision to make; continue the status quo and underperform against targets, or take action now and accelerate your path to more profitable sales. 
In this second in a series of three Blogs, I focus on opportunity pricing; and how today’s business leaders are leveraging CPQ for greater pricing accuracy and more profitable deals.

The Pricing Challenge

Your pricing strategy defines your pricing rules, or how much you charge for your products and services, including promotions and permitted discounts. It’s basically a framework that acts as the guardrails for your sales team.

Enter your sales spreadsheet; your matrix that communicates these pricing decisions to your team. Trouble is, manually calculating the correct price across multiple price books is challenging. Spreadsheets are often out of date, there are currency options to apply and the market keeps changing. Factor in multiple revisions and the problem is magnified. So, your pricing is too open to interpretation and error, multiple approval rounds, and threatening margin erosion. Meanwhile your prospect is waiting for your quote - and delays in getting this to them reduces the chance of winning the deal.

• Salespeople. Spreadsheets are tedious. Manual effort and multiple changes and revisions cause pricing errors and un-approved discounts that erode margins and delay delivery.  
• Sales Operations. Spreadsheets are inefficient. They lead to poor pricing decisions and greater risk of errors that may or not get spotted when a quote is converted to an order.
• Business Leaders. Spreadsheets are flat. They lack the depth to correctly price combinations of products and services, calculate risk and build this into the price. Introducing new pricing strategies is almost impossible and simply increasing prices can be a major disruption to the business.

The result; at best money is left on the table (assuming you win the deal), and at worst, deals are won at margins that quickly turn into losses.

CPQ: P is for Optimized Pricing

CPQ is the short-hand name for Configure, Price, Quote software. At its core, CPQ is a powerful and flexible rules and calculation engine for automating the sales process. Any business rule you can imagine can be automated to streamline your sales process.

The C, the P, and the Q are the user-based outcomes of CPQ software, outcomes that are used by different stakeholders across your organization. The P, or Price of CPQ, automatically governs your pricing rules and calculates your pricing. By automatically applying governance to your pricing rules, you achieve greater accuracy, less delays and more profitable deals.

• Salespeople. Price means faster approvals and greater productivity; automatically calculated pricing at governed rates for maximized margins that in most cases are auto-approved.  
• Sales Operations. Price means process efficiency; governed pricing rules optimize opportunities, accelerate quote turnaround, and pave the way for increased quote volume.    
• Business Leaders. Price means more profitable deals and better quality pricing strategy decisions.

Tip: Price also means automated workflow so that any price within authorized guidelines does not need formal approval - so customers receive their price faster, further increasing the chance of success.

In today’s highly competitive market, business leaders are ditching the spreadsheets for governed pricing rules. By leveraging XaitCPQ, they quote accurate pricing faster and more efficiently for more profitable deals.

Related Article: Easily Generate Compelling Quotes, Every Time