What’s your pipeline management state of play — and could you be doing better?
Many businesses today equate pipelines with opportunities, full stop. Thus they have well-built sales stages, designed to advance every account from the prospect stage to the closed-deal stage.
But while many business are also quite good at the prospecting part of pipeline management, too few businesses focus on the quoting and contract management aspects. Accordingly, per the law of diminishing returns, businesses should advance the state of their quoting and contract management capabilities to get the most bang for their pipeline management buck.
Historical Barriers: Quoting, Contract Management
Why are businesses’ quoting and contract management capabilities typically less advanced than their opportunity management or prospecting practices? Because, historically speaking, the technology available to support automated quoting and contract management has been relatively weak.
In the past few years, however, a number of software application vendors that specialize in automating configure, price and quote (CPQ) processes have emerged. One such vendor is Apttus, whose product is built on a modern, cloud-based platform that makes an excellent choice for businesses that want to tap CPQ capabilities.
What’s on offer? Just as CRM automates — or even eliminates — numerous tasks related to managing customer relationships, thus giving salespeople more time to sell, CPQ automates the manual, error-prone processes associated with generating or adjusting quotes.
4 Ways Antiquated Quoting Compromises Sales Power
What’s wrong with manually configuring products or generating quotes? Well, here’s a classic scenario, involving a medical device manufacturer — we won’t name names — that sells custom-built sterilization equipment to hospitals. Every time salespeople set up a deal, they need to make a custom quote, which involves sitting down with a customer, determining their needs, recording this information and sharing this with a pricing or sales-support team. Somewhere down the line, a spreadsheet will be used to generate a price quote and the salespeople can then go back to the customers, quote in hand.
What’s wrong with this scenario, which is common practice in many organizations today? Here are the four biggest downsides:
Costly: The process is prone to human error and mistakes can erode profits
Inefficient: Manual processes waste time and produce inconsistent results
Opaque: Sales team lacks visibility into workflow, including status/ETA of quote
Changes: Any customer-requested changes — large or small — require the entire quoting process to restart
In short, using manual processes to handle configuration, pricing and quoting is wasteful and expensive, and that’s what tools such as Apttus are focused on addressing. Using CPQ also helps businesses tame product or bundle proliferation, in part by letting salespeople create unique combinations of products or services for any given customer.
Maximum Returns: Tame Contract Management Too
Automating CPQ makes great business sense, not just for the above-mentioned reasons, but also for any business that manages contracts. In fact, when it comes to pipeline management programs, contract management is the low-hanging fruit, and a no-brainer business rationale, for implementing CPQ.
Here’s why contract management offers such big potential returns. Let’s say your customers renew subscriptions — perhaps for maintenance and technical support — annually. What’s the best way to handle that?
In 90% of CRM systems, after salespeople book a deal they hand it off to a different department, oftentimes because the salespeople can’t quote a price using the CRM system. Accordingly, that hand-off kicks off a lengthy process involving the customer receiving a quote, selecting a related level of maintenance and support, tweaking the order and then signing the deal. Once the deal is closed, the precise assets that the customer purchased get booked, perhaps in the ERP system.
One year later, meanwhile, the sales team may be none the wiser into what the customer actually ordered, how they’ve used it or if they’ve had a smooth ride from a service standpoint.
Maximize Wallet Share: Cross-Sell & Up-Sell
But this is valuable information for sales teams, especially for up-selling and cross-selling purposes. For example, let’s say a valuable upgrade becomes available after a customer makes a purchase. Or maybe the customer’s usage pattern suggests that a different maintenance contract would better fit their needs. Likewise, perhaps complementary products or services are available that might enhance their purchase or otherwise benefit the customer.
Accordingly, it’s a no-brainer for businesses to ensure that this deal information resides in the CRM system from the moment the deal closes, as well as to put CPQ processes in place that make it easy for salespeople to work through various scenarios for up-selling and cross-selling customers, including generating automatic and accurate quotes. By putting these types of more advanced pipeline management practices in place, businesses can earn more money not just from brand-new prospects, but also by gaining more wallet share from their existing customers.