SelectHub

The State of the CPQ Market in 2017

CPQ strategies continue to bring greater accuracy and speed to every aspect of sales cycles, from pricing to product configurations. Considered to be one of the hottest areas of Customer Relationship Management (CRM), CPQ strategies are unique in that they provide unequivocal evidence of their value across an enterprise. The more complex the sales cycles, product configurations and channel selling structures, the more CPQ selling strategies pay off. Gaining greater insights into customer requirements and being able to quickly anticipate and act on their needs is essential for winning additional deals.  CPQ is the catalyst of sales growth many companies need to excel at, as every aspect of customer relationships is becoming more complex, faster and more context-driven than ever before.

Get our CRM Software Comparison Matrix.

Some Quick Facts:

CPQ Is Redefining Sales Effectiveness

Progressing beyond product configuration and making sure the orders sold by sales teams are reliably built, CPQ today is the foundation creating an entirely new era of sales effectiveness possible. Every aspect of the sales cycle is being improved by CPQ today. Of these areas, the two with the greatest potential are pricing and managing products throughout their lifecycles. Despite the hype surrounding analytics, Big Data, and machine learning, there’s ample evidence these technologies are delivering insights that drive more profitable selling strategies. The decision-making process for prospects changes over a given quarter or year. The more urgent the need is to solve a problem with pricing and profit implications, the faster the sales cycles move. CPQ is proving to be a very effective cloud application that takes on these challenges and turns them into opportunities.

Sales effectiveness is also being revolutionized by the rapid advances in user interface design, intuitive workflows that can quickly be modified to match how companies work, and mobile-first application design. The mobile-first mantra that so many CRM companies, including Salesforce platform-based companies specifically, are adopting are paying dividends regarding faster, more contextually-aware applications. The three factors of user interface design, intuitive workflows, and mobile-first application design are also driving the highest levels of sales team adoption for the latest generation of CPQ applications. The evolution of the user experience is one of the most-needed innovations in the CPQ market as adoption has often been a challenge due to the inherently complex nature of product configurators and their related apps.

Accenture’s study, Empowering Your Sales Force: It’s Not Just Automation, It’s Personal provides a glimpse into how pervasive technologies are being used to streamline the selling process. It’s accurate from the standpoint of how sales professionals tend to be overwhelmed with the technology that’s supposed to help them gain closer contact with customers. Ironically, the study finds that sales professionals spend more time attempting to make technologies align with customer-driven initiatives than spending time with customers. This finding shows one of the most powerful trends happening in the CPQ market today, which is the consolidation and simplification of CPQ applications across entire platforms. This development is most evident in how the many CPQ vendors who have built on the Salesforce platform are attempting to broaden their scale quickly.

83% of sales representatives interviewed as part of the Accenture study are currently using CPQ applications today, and 81% are using technology-based tools to identify and take action on sales leads. 80% are using automated CPQ tools to provide prospects with quotes that include their product and service configurations.  The following graphic compares the key findings from Accenture’s survey on sales effectiveness.

CPQ Is Streamlining Omnichannel Selling

It’s a daunting challenge for any company to provide a consistently excellent experience across every selling and service channel at all times. Given the services, product and support breadth that companies have, excelling at Omnichannel is especially difficult. Cloud-based CPQ applications have global scalability developed at the platform level, enabling them to flex in response to unique pre-sales, selling and service strategies. Below are a few examples of how CPQ is streamlining Omnichannel selling:

 

 

 

 

CPQ Is The Rocket Fuel Driving The Era Of The Intelligent Cloud

Knowing when to offer specific price incentives, upsells or cross-sell promotions based on previous customer behavior patterns is becoming possible thanks to machine learning. By aggregating the massive amounts of data captured across transactions, marketing and selling teams are aggregating data sets together and using the combination of CPQ and machine learning to gain greater insights. These insights accelerate sales cycles, increase deal sizes and remove barriers to creating and closing more business. Taken together, they are the core components of the Intelligent Cloud, unified by the many approaches companies are taking to drive more sales using their CPQ strategies.

The following is just a few of the many data points that reflect how CPQ is revolutionizing selling, with the Intelligent Cloud being the platform of the shift in selling strategies:

Machine learning and predictive analytics combined with CPQ applications are accelerating a new era of intelligent selling, setting a strong foundation for the growth of the Intelligent Cloud, and delivering the following results:

 

 

 

CPQ Is The Foundation Of The Intelligent Cloud Maturity Model

When CEOs, CMOs and CROs (Chief Revenue Officers) are asked to define the most pivotal point when they turned their selling performance around, they all tend to mention the foundational elements of the Intelligent Cloud. Accurately defining the competitive landscape for products and services using descriptive analytics is where the majority of companies begin integrating analytics into their CPQ strategies. The intersection for descriptive analytics and CPQ applications lead to creating predictive analytics workflows that guide pricing, discounts, and advanced deal analysis. As companies mature from multichannel to omnichannel selling, they need data that enables easier collaboration. The model reflects this, with the focus turning to collaboration. At the apex of the model is cognitive analytics, where analytics provide insights into how best to orchestrate selling strategies. The following graphic illustrates the Intelligent Cloud Maturity Model:

Exploring The Leading CPQ Providers Today

The Configure-Price-Quote (CPQ) vendor landscape continues to rapidly evolve as leading vendors develop and launch new applications aimed at streamlining the selling process. CPQ’s inherent value is in quantifying its contribution to every stage of attracting, selling and serving customers. Every one of the over 60 vendors competing in this market can provide measurable improvements based on their application’s technologies and tools. The most valuable CPQ vendors are moving beyond the basics of providing feedback on how they improve sales: they’re guiding upsell and cross-sell strategies, providing contextual intelligence and recommendations based on machine learning and artificial intelligence (AI).

The greater the intelligence, contextual insight and AI that can bring greater guidance and direction to selling strategies, the shorter and more lucrative sales cycles will be, and the faster companies grow when they rely on a CPQ strategy. With the criteria mentioned above in mind, in addition to factoring in how effective each CPQ vendor is at the basics of improving sales cycles, quantifying their contributions and creating a unified selling process, the following five CPQ vendors are chosen as market leaders:

Final Thoughts

There’s a series of revolutionary developments occurring in CPQ today, and this article has provided a glimpse into the most major new ones. The future of CPQ will be marked with greater descriptive, predictive, collaborative and cognitive insights than ever before. Pricing strategies will be finely tuned to the specific decision-making styles of customers when they are most likely to buy. Quotes for the most profitable products will be produced within minutes of a sales call and delivered within the hour. Customer’s time will be respected more than ever before, as will the context in which customers want to buy. The era of intelligent selling is here, forever changing how CPQ applications are used for streamlining and simplifying complex selling strategies.

Get our CRM Software Comparison Matrix.