Let’s Break Down The Fundamentals Of Salesforce CPQ Together

Salesforce has proven itself a vast and diverse universe, rapidly growing and ever-changing. Not to mention, nowadays it’s the Customer Relationship Manager (CRM) software industry’s golden standard. For those trying to optimize their sales process, Salesforce CPQ is your best friend because it’s a sales tool companies use to accurately deliver quotes for a given product configuration scenario. 

Here’s a guide to help you understand the basics of Salesforce CPQ:

What is CPQ in Salesforce?

CPQ is a sales team’s strongest ally as it is specifically designed to smooth the sales process. Salesforce CPQ accounts for the following factors when generating prices and optimizing quoting procedures:

• Optional features
• Customizations
• Quantities
• Discounts

In the Salesforce world, CPQ stands for Configure, Price, Quote. Let’s break it down:

C = Configure

Direct-to-consumer products likely utilize a simple “click and purchase” sales tactic. With B2B companies, however, there’s often some variation in the products you deliver. 

For example, imagine you are a car manufacturer. Your customer may pick and choose the features they want to include in their new vehicle, such as heated seats or a push button start system, while also choosing to forego features they don’t find necessary, such as a sunroof. Each customization costs you more money on manufacturing, meaning the final cost of the vehicle will increase. 

Respectively, these increases in cost will impact profitability for the distributor, which is typically reflected by an increase in the price.

P = Price

Prices vary entirely through three main components: a customer’s order, the company, and the customers themselves. It typically comes down to pricing factors (including product configurations), which are constantly shifting. 

Let’s go back to the car manufacturer example. Marketing teams often push promotional discounts, especially around major holidays. When pricing a sale, this variability needs to be taken into consideration. 

Other pricing factors that can change the way you price your product or service include:

• Flat-rate (per company or per user) licensing fee
• Usage-based measurement
• Time-based measurement

Q = Quote

With Salesforce CPQ, generating quotes is meant to be quick and simple. The quote will typically include the quantitative pricing, as well as any terms and conditions that may apply. There are a variety of factors that make up the quoting phase of CPQ including:

• Calculation of prices of goods or services, which are broken down into different units of measurement
• Time constraints
• Designation of responsibilities
• Discount schedule (if applicable)

Take our previous example— car customizations or product bundles may add time to the expected production, deliverability, and will, therefore, be considered in the itemized quote.

What Are CPQ Product Bundles?

As mentioned before in the car example above, any configurable product has a number of different add-ons that customers may want to include. These add-ons can include accessories or custom components that make up a product. 

When a product is customizable in this regard, they may consider using product bundles in CPQ to optimize the process and potentially drive a bigger sale. From a more granular perspective, bundles are broken down into the following categories:

• Bundle Parent: Or the parent product with customizations
• Options: Individual add-ons
• Features: Features are a group of options 

Product bundles are an asset used by the sales team to collect and assess the different options for a customer to personalize their purchase. This can also be utilized to cross-sell products that may be sold in tandem.

What is the Value of CPQ Software?

In theory, the process of delivering quotes is simple. But what happens when a customer wants different iterations of the same product? Small changes to an order in the quoting phase can result in hours of re-calculations to generate a new quote.

As stated before, Salesforce CPQ is your best friend, and here’s why– CPQ software was specifically designed to streamline processes from lead-to-purchase. Salesforce CPQ can solve several problems in the purchasing process including tight timelines, general efficiency, deal sizing, quote accuracy, over-involved sales processes, and overall customer satisfaction.

Salesforce CPQ as a Time-Saver

Without Salesforce CPQ, companies spend hours revising at each respective phase in the lead-to-purchasing process. As mentioned above, even a minor change in the configuration side can offset the entire quote, which could require even more time and resources to be dedicated to the process. 

CPQ software takes these things into account and any potential change won’t call for too much extra time.

Salesforce CPQ as a Sales Asset

Salesforce CPQ can serve as a valuable resource to your sales team, help increase deal size, and optimize the sales process. While your sales team may be well versed in your company’s basics, it’s unlikely that they are a Subject Matter Expert (SME) on all product offerings. That said, CPQ software can eliminate the need for a SME altogether by helping your sales team:

• Ask the right questions to provide a more comprehensive needs analysis
• Understand the opportunities to maximize deal size through cross-selling and upselling
• Identify the features that set you apart from your competition
• Determine the expected ROI, thus minimizing discounting
• Address any questions or objections
• Record what happened during the sales call

Salesforce CPQ can be your substitute SME! CPQ can be customized and optimized to eliminate extra steps in the sales process, making it an incredibly valuable asset.

Salesforce CPQ to Improve Accuracy

Iterations on the configurations are more than just time-consuming, they can also increase the margin for mistakes, which can lead to:

• Manual research and writing of each quote
• Missed information on sent quotes
• Unnecessarily long waiting times for quotes
• Customer frustration

All of these are time wasters and can ultimately prevent your team from generating precise quotes. Salesforce CPQ solves that. Especially as the degree of customization capabilities increases, efficiency, flexibility, and accuracy become ever more crucial to the success of your company. Let CPQ software help simplify your team’s work.

Salesforce CPQ in Action

From its implementation to its daily use, Salesforce CPQ can be a complex tool to navigate, especially without proper training. Many companies require professional certification to be able to work within the program. That’s why training and assistance with implementation is incredibly important.

Though this might seem quite involved, there are several resources out there to help you attain your Salesforce CPQ certification with relative ease.

Salesforce CPQ Training

If you want to fully reap the benefits of CPQ software, education and certification are key. Resources such as Salesforce CPQ Trailhead’s trails and modules can assist in the process. Trailhead is designed to orient you on the basics and guide you through every step on your journey to Salesforce CPQ mastery.

Another great option is free training tutorials like the Salesforce CPQ youtube videos made by Ashley Allen, CEO and founder of Salesforce consulting partner, ITequality. Whether you learn best through a training program or through educational videos, remember that these resources are abundant and readily available as you work towards obtaining your CPQ certification.

Seek Outside Help

Trying to master the art of Salesforce CPQ can be tricky, especially if you are attempting to self-teach all of the individual nuances. Even if you have a certified Salesforce CPQ specialist on your team, there are some aspects of Salesforce that can be especially challenging to navigate.

That’s why Salesforce partners with consulting companies to help direct customers to an educated team to troubleshoot and support with implementation. The one downside most companies see when working with consulting firms is that they often don’t learn how to manage Salesforce on their own, leaving them reliant on outside teams.

ITequality Will Help You Master Salesforce CPQ

Constantly relying on outside help can be costly and isn’t always effective. Unlike other Salesforce consulting partners, we want to help you take the training wheels off and let you ride on your own. 

Our team at ITequality pride ourselves on our ability to teach as we work so you can learn and operate without outside help. In fact, we value documentation and step-by-step instructions to ensure the overall success and adoption of new sales processes.

We also celebrate our diverse and cohesive team and work to provide opportunities to groups of people with limited exposure to careers in the IT industry. Because of this, our consultants understand what it’s like to work from the ground up and are willing and able to walk you through any processes your team needs help with. With our combined years of experience, you’ll soon be taking the world of Salesforce CPQ in stride, with independence and confidence!