There’s a lot that goes into achieving sales goals and CPQ can play a critical part in either hitting or missing your numbers. This post looks at examples of Sales KPIs that the right CPQ can significantly improve, and how.
In pursuit of operational excellence and maximizing growth, sales leaders constantly study the data that will tell us how far we are from our “north star”. When it comes to quoting in the sales process, here are some KPIs that sales leaders track:
Examples of Sales KPIs Related to Quoting
- How long does it take us to get quotes out? (quote cycle time)
- How many people are involved with putting pricing together for the customer?
- What percentage of quotes require rework?
- What’s our average discount?
- What’s our average margin?
- What’s our average selling price?
- How many skus are we selling on each deal?
- What’s our average deal size?
- What’s our average ACV, TCV, MRR, NRR, etc.?
- What’s our win rate?
- What’s our renewal rate?
- What’s our attach rate on renewals?
As you can see, there is a ton of information which needs to be analyzed to let us know how we’re doing. Then we need to get even more granular and look at this by product, by region, and so on. And of course, we want to understand how we compare to our competition in these areas.
The bottom line is not many of us are ever completely satisfied with our KPIs. What does that mean? We’re leaving money on the table.
Examining the Quote to Cash Process — and what can be done to improve performance of Sales KPIs — brings us to the role of CPQ in influencing many of these KPIs. Within some companies, CPQ will influence them all.
At a minimum, we leave money on the table if we can’t get quotes out in a timely manner, are involving too many people in the quoting process, or aren’t structuring deals intelligently. Additionally, there are other items which are not always tracked as closely but can also have a significant impact on the business. Let’s not forget about New Product Introductions (similarly, “New Service Introductions”) and KPIs related to getting new products and services to market.
New Product Introductions
At the risk of sounding cliche’, businesses are changing more than ever and customers are more demanding than ever. With “everything as a service,” customers are constantly evaluating their vendors and the value they’re getting. If the value isn’t there, it’s easier than ever to make a change.
If your business is to thrive, your products will change, and how you charge for them will evolve as well. Naturally, important questions related to New Product Introductions should be considered. For instance: how long does it take to get a new product into the system and made available to sell? Can the system handle our new monetization strategy?
I’ve seen it happen on many occasions where a company develops a great new product but:
- it takes multiple months just to make the new product available to sell in the quoting system,
- or perhaps the quoting tool is simply incapable of handling that type of product,
- or just as damaging, the quoting system cannot handle the new way of monetizing the product or service.
This spells catastrophe for so many stakeholders including customers, employees, shareholders, and the bottom line.
The right CPQ solution will help with your sales KPIs
There is hope! A solid implementation of the right CPQ solution will help with your sales KPIs and it can also accept creativity for any new products or monetization strategies.
Your business is sure to change. When you’re evaluating CPQ platforms, consider if the platform is too rigid. You need to see that the system can not only handle today’s requirements, but also affords the agility needed to support tomorrows’ innovation.
Make sure you see how the system will allow you to introduce new products, new rules, new processes, and new charge methods.
Keep in mind that CPQ implementations are not trivial. Why do I mention this? CPQ is a major commitment requiring an investment of significant time and money into the implementation; you don’t want to be stuck with the wrong system.
CPQ implementation for the win
Imagine all of your products and services and the business rules which govern how they’re configured and sold. It will take some work to set up a system to manage all of that just the way you want it to. But it can be done! The right system will manage all of your business rules, will be intuitive for the end users, and will encourage and support your innovation. Your reps, partners, and customers will be more independent. You will get quotes out faster. You will structure deals with intelligence and make new products available to sell with a reasonable effort.
When your CPQ is firing on all cylinders, you’ll see improvements across the board on those hard to reach sales KPIs.