Is Salesforce CPQ really worth it? A look at ROI
The Salesforce CPQ Journey Series
When is Salesforce CPQ worth the investment? And how do you quantify ROI?
Over the years, Cloud Giants has implemented Salesforce Configure, Price, Quote (CPQ) for numerous clients and industries. For these customers, the decision to purchase and implement CPQ had many facets: increase sales effectiveness, reduce systems and administrative burden, and provide greater operational transparency. For more on these considerations, check out Do I Really Need Salesforce CPQ? published earlier in the series.
In this blog post, we’ll look at these considerations as we define approaches for quantifying the technology’s return on investment. Our goal here is to help you answer the question Is CPQ worth it?
First, some perspective. CPQ implementation is a journey lived in phases. Like any enterprise system, it matures over time through iteration. The business impact and value it creates will increase over time as well. As we look at ROI measures, keep in mind that success is gradual and iterative. Setting realistic expectations with short-term and long-term goals is key. Celebrate the small wins that build to groundbreaking change. After all, digital transformation is an ongoing process, not a destination.
ROI can mean many things depending on your goals, so we’ll focus on a few different approaches for quantifying it. A documented calculation greatly increases accuracy and shared understanding when comparing two values. As for the approaches, we’ll look at areas based on common client interest and CPQ capabilities.
1. Sales Efficiency
This space is all about ROI from revenue generation. CPQ investments should aim for just that, an increase in revenue production. Here are a few capabilities we’ve seen that have the greatest influence in this area:
Guided selling: Provide reps a guided experience so they are positioning the right products at the right time. Maximize cross-sell and upsell opportunities.
Product rules: Ensure products that should be bundled are bundled automatically. Simplify the configuration process for reps increasing the speed, accuracy, and quality of product combinations.
Price rules: Limit discounting and setup approval processes to maintain profitability targets. Create coaching opportunities for reps that may discount too early or too often in the sales cycle.
2. Reducing systems & Administrative Burden
Given CPQ is native to Salesforce, there are many advantages to be gained from process and technology simplification. ROI in these areas is most commonly associated with cost savings. Considerations here include:
Licensing: Evaluate any systems and user licensing that may no longer be needed i.e. analytics tools, quoting tools, pricing tools.
Support Tickets: Quantify the existing level of support tickets related to your quote-to-cash processes. Compare those levels with future state. Is there an established cost per ticket? If not, can this be defined?
CPQ training time: Evaluate the amount of time spent on CPQ during new hire training. Also survey new hires to determine how much time they require after training to get up to speed on the quoting process. For organizations that have a manual or multi-step quoting process, there’s typically good savings potential here in terms of training and support hours for new hires.
3. Greater Operational Transparency
CPQ leverages Salesforce reporting and dashboard capabilities. Supporting the end-to-end sales process in a single system creates tons of operational advantages. ROI in this space is mostly focused on closing performance gaps and improving product, process, and risk mitigation.
Pipeline: Ability to manage pipeline by quoted products. Evaluate product performance and overall win rates.
Retention: Ability to evaluate retention of products and discover trends to mitigate renewals at risk.
Legal: Automate the creation of service agreements and statements of work. Reduce legal involvement by conditionally including terms based on products or aspects of the sales cycle.
ROI Metrics to Consider
So, is CPQ worth the investment? It certainly can be.
Use these evaluations to set realistic expectations on quantifiable ROI goals. Calibrate ROI based on the size of your sales organization, costs of providing current service levels, and operational capabilities.
Remember to be conservative and take a crawl-walk-run approach to ROI realization. Then, look at the numbers. Does the expected return satisfy the investment? If yes, great! If not today, it’s better to know before jumping into an implementation. Reevaluate as your organization grows.
If your particular path forward still feels a little unclear, our CPQ experts can help you navigate the conversations needed to gain clarity and make a decision. Let us know where we can best support you.
Chris S. is an experienced sales leader who has translated his success in sales to customer-focused CRM consulting. A 4x certified Salesforce professional, has has deep experience optimizing ROI for clients and helps organizations better compete in their industries.
He is a Salesforce Certified Administrator, Platform App Builder, Pardot Specialist, and Sales Cloud Consultant.