Today’s customers increasingly expect their suppliers to provide customized solutions for their business needs, driving a trend called “mass customization.”
Adopting a customer relationship management (CRM) solution is a good first step toward improving your sales process, and many companies now also use configure, price, quote (CPQ) technology as a way to meet the growing demand for configured products and services.
But in order to win deals at a price that both your company and the customer can afford, you need to look beyond CPQ. Pricing guidance improves the effectiveness of your sales team by arming them with data-driven, defensible pricing position. It also integrates your policy and your process, improving the sales experience for both you and your customers.
Here are three ways that CPQ and pricing guidance improve your sales process:
1) Providing context for deals: When one of your sales reps goes into a pricing negotiation with little more than gut instinct, the initial price offered is likely to be too high, too low or lowered too quickly. All salespeople have had the experience of coming in too high and losing the business, or coming in too low and leaving money on the table.
Salespeople are most effective when equipped with a rational pricing strategy that allows them to negotiate in a range that makes sense for their business and the customer. With pricing guidance, sales reps know when they have flexibility and when they don’t, and have confidence that the prices being offered are realistic, fact-based and defensible.
2) Increasing confidence in negotiations: To win deals at the prices your organization needs, reps must have confidence in their pricing position. Often, the buyer has the most comprehensive and up-to-date market research, and thus more power in the negotiations. When a sales rep doesn’t have confidence in their price position, the first thing they do is back off the initial price. This signals the customer to keep pushing until they find the lowest possible price.
With pricing guidance integrated with CPQ, however, the salesperson’s position is strong and clear. Reps have the confidence to stand firm with their prices as they are backed up by hard data. Your sales reps are also able to spend more time on ensuring they communicate the value your solution provides because they’re confident the pricing is data-driven. This approach helps to change the sales conversation from haggling over the lowest price to helping the customer internalize the full value they receive from your solution.
3) Improving the sales experience for prospects: Combining CPQ with pricing guidance allows reps to quickly deliver the right price for the right product, improving the experience for their prospects. Using CPQ’s product configuration capabilities, your sales rep has the right tools to quickly create the best offer to meet their requirements. Pricing guidance then supplies the sales rep with a data-driven price for this configured product that meets your business goals while also being within the customer’s affordability range.
CPQ tools help salespeople manage the complexity of configuring products and delivering quotes quickly and accurately. But getting the product right on the quote isn’t enough. By adding pricing guidance, your sales team is armed and ready to work more effectively with your customers and become that trusted partner they can’t live without.
Ready to learn more about using CPQ and pricing guidance to improve your sales process? Download our free tip sheet, “5 Reasons To Make Pricing Guidance Part Of Your Quoting Solution.”