What is the cost of putting off a Salesforce CPQ implementation?
You are a RevOps leader considering a solution to optimize and accelerate your sales process. Standardization is crucial, but you also need transparency to ensure your team is quoting contracts accurately and efficiently.
You’re considering a Salesforce CPQ solution, but you also are wondering if there is any downside to your current quoting process. Maybe it’s a Frankenstack of mismatching platforms, an Excel or Google Sheet that houses everything, or you just want a cheaper CPQ alternative.
Whatever your current method, you want to consider the trade-off of making this significant investment on CPQ over another process or department first.
We hear stories like this all the time—a RevOps leader gets ready to implement a new system or process that benefits the company, only to get cold feet for one reason or another. Sometimes it’s your budget. Sometimes it’s getting executive buy-in. Most often, however, it’s because you want to try to squeeze as much time out of your current system and process as possible. “If it’s not broke, don’t fix it,” as the old saying goes.
But what if we told you that not only is it (your current quoting process) broken, but putting off implementing a CPQ solution will make it worse?
Do we have your attention now?
This article will detail some of the common problems we see RevOps leaders like you face when maintaining your current quoting model. Not only are these problems happening now, but you may pay more to deal with them the longer you wait to make the switch. When you finish reading this article, you’ll understand the cost of putting off a CPQ implementation.
Do you lack visibility?
Do you know exactly when your customer accounts are up for renewal? How about what product configuration you sold customers? Any idea on what the renewal price is vs. what they first paid? Do you have any recorded documentation of these transactions if a customer argues for a lower price at renewal?
If you’re scratching your head by now, you’re not alone. Many SaaS organizations begin with a modest offering that becomes unmanageable as they rapidly outgrow their first sales model. What once was a single offering may now be a complex solution combining several different offerings.
What’s at stake if you’re seeing these issues? You can’t efficiently and consistently renew customers, making your customer LTV challenging to maintain. Worse, friction in the renewal process can lead to the dreaded C-word every CFO hates (churn, it’s churn).
If the renewal process feels broken to customers, what’s stopping them from turning to your competitors? Without a CPQ solution in place, knowing who, when, and how to renew becomes nearly impossible as your organization grows.
Forecasting your MRR and ARR
If you don’t have transparency on transaction data, offerings, or line level detail, how can you accurately measure or forecast your MRR or ARR? How are you factoring in discounts?
You want to know your data is accurate and clean. Otherwise, you could forecast a great month that ends up being a miss because the data is messy. Manually managing each of your transactions and offerings line-by-line is time-consuming and unmanageable.
Do you have any transparency on discounts your sales team offers? How do those discounts impact renewals? Without clear guardrails for discounts in place, any transactional data you do have quickly becomes untrustworthy.
If you want to forecast revenue to hit your MRR and ARR targets accurately, you need a system and standards that enforce good data hygiene. A trustworthy quoting solution enables you to forecast with the confidence that your data is clean and accurate.
Do you have manual (and messy) quoting?
Your sales team manually quoting each customer order creates two issues that impact your revenue and customer experience:
- Manually processing a sale makes it difficult, if not impossible, to maintain consistency with pricing, discounts, quotes, and renewals.
- Bespoke quotes for each customer can make messy guesswork for understanding what your customers actually “own” vs. what you sold them.
How is manual quoting impacting your revenue?
Because your sales team is manually configuring each quote, there is almost always going to be inconsistency. Without a Salesforce CPQ solution, you have to pay for the labor of someone to review all transactions.
What about the number of SKUs you have for line items? If you are ASC 606 compliant, you may have hundreds of SKUs even if you only sell “six” offerings. Can your sales team afford to wade through every SKU to configure quotes accurately?
Believe us when we tell you that the answer is always “no.” We also want to point out that your customer acquisition cost (CAC) will steadily increase because of the extra work from manual quoting. And a portion of your revenue now becomes maintenance, a cost you need to avoid.
The impact friction has on your customer’s experience
What do your customers “own?” Configuring a quote without line level details makes this difficult to answer when a customer is up for renewal. Manually configuring a quote also creates a poor customer experience because every customer is not getting the same offerings.
Poor contract management becomes a customer experience nightmare. Even if you can convert, you need a sustainable revenue source to drive your customer LTV. If the process of renewal is painful and full of friction, your customer base will quickly lose confidence in you.
Are you struggling with compliance?
Before we even ask, let’s review the ASC 606 compliance definition and why you must meet the standard. ASC 606 is a revenue framework jointly developed by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). The standard eliminates variations in how organizations across different industries handle accounting for transactions.
To be compliant, you need to have line level detail for each product configuration part of your offering. If you aren’t using a CPQ solution, you’ll end up with customer-facing documents longer than CVS receipts. You also need ASC 606 compliance to pass a tax audit—we don’t think we need to explain the cost if you don’t pass.
Want to scale
Our team at OpFocus wants to empower you with effective tools to scale revenue growth. If you want to Increase visibility, standardize quoting, and ensure your team practices good data hygiene, you need a Salesforce CPQ solution.
Now that you understand why you need a Salesforce CPQ solution, it’s critical to know what to expect during a CPQ engagement. Learn what to expect during a Salesforce CPQ implementation so you can prepare your team for a successful deployment.