For most sales organizations today, a customer relationship management (CRM) platform serves as the central hub for sales activity. Now, companies are finding ways to get additional value from a CRM by extending its capabilities into all aspects of sales performance management. Case in point: managing contract compliance.
Typically, you would first extend your CRM environment with configure, price, quote (CPQ) tools, which greatly enhance your sales effectiveness. Then, you would integrate an additional application for contract management. Having all of these systems interacting within the same CRM environment provides great opportunities for improving customer relationships and driving revenue.
Combining Contract Management and CPQ
Here are three ways to combine contract management and CPQ tools to improve contract compliance:
1) Improve access to contract information: Companies don’t usually have a central location for managing contracts, and that tends to result in an out-of-sight, out-of-mind situation, as you lose meaningful access to the contract details. Shortly after winning a deal and signing the contract, people start trying to find that contract and remember what it says.
When people don’t have easy access to the original contract and its terms and conditions, they start making guesses. It’s not hard to see how that causes problems for contract compliance.
When you have a central location for contract management, such as within your CRM environment, all of those details are maintained in a single place. The sales team is able to quickly access accurate contact information and use it to drive offer development with the CPQ tools. With this approach, your sales reps have confidence that the offers they create are based on the relevant terms and conditions of the agreement, improving contract compliance.
2) Streamline your renewals process: A contract has a start date and an end date, and you probably want to renew your B2B customer contracts without disrupting the flow of the business relationship. When you combine a contract management system with CPQ tools, it’s easy to be proactive, developing proposals in advance of the contract expiration.
In this situation, you’d get an advance notification that the contract is going to expire, then use the CPQ to provide a renewal proposal, conduct the negotiation and extend the agreement to the next round. What’s especially helpful is that the proposal you create could draw upon the terms of your existing contract, but also forecast the customer’s changing needs and what your product line should be able to provide, based on your product roadmap.
You’re able to pull all of this information together without disrupting your business relationship and without the pressure of scrambling to meet to get ahead of a contract expiration.
3) Ensure compliance with specific terms and commitments: B2B contracts frequently include volume commitments for specific products. The customer commits to buying a certain amount of the product in order to get a favorable price for the duration of the contract — one to three years, for example.
In practice, managing and enforcing those commitments is quite difficult. When you think of all the different people in an organization who could be buying from you, it’s easy to see that some may not know about or remember all the details of that agreement over time.
If you’re using a CPQ solution in conjunction with contract lifecycle management, it gives your reps a way to provide offers and proposals to customers that include all those products that are specified within their agreement. You’re ensuring contract compliance as your reps make recommendations, cross sell, upsell and offer comprehensive configuration. This allows you to proactively ensure that customers continue to comply with the contract terms.
The underlying benefit of combining contract management with CPQ is that it helps you demonstrate your value as a trusted partner. By proactively managing the contract, you make it easy for customers to do their jobs and increase their confidence in your relationship.
Through its partnership with SpringCM, PROS currently offers the only solution that integrates CPQ, price optimization, and contract management within your CRM environment. Combining these tools gives you unprecedented capabilities to manage terms and conditions and maintain contract compliance as part of your customer relationship.
To learn more about how to successfully plan for and manage multi-solution deployments such as CPQ and CLM on Salesforce, check out the webinar: Proven Methods for Extending Your Salesforce Deployment to Improve Sales and Revenue Effectiveness with PROS and Acumen Solutions on June 10 at 9 am PDT.