8 secrets for a successful CPQ project

1. Focus on solving concrete problems 

Always start with a concrete product and set a goal to get the product live in a production environment. With today's SaaS-CPQ-solutions, efficient product modeling/pricing tools and a straightforward system configuration, it is not at all impossible to launch a first product within a month or two.

2. Be aware of the limitations of CPQ

In the field of psychology, the Dunning–Kruger effect is a cognitive bias in which people mistakenly assess their knowledge in a specific field is greater than it is. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability. Without the self-awareness people cannot objectively evaluate their competence or incompetence.

When you try to launch a CPQ-system, it is easy to fall into this trap. To describe the logic that limits how the product can and may be sold in a general way is somewhat cumbersome. Here it is important to understand what you need to understand before you start with product logic. Then the way to a working CPQ will be as straight as it can now be.

3. Listen to everyone involved – and to the customers

For some, external assistance may be required to ensure that the CPQ system provides useful results. Ideally, if you kick-start a project with a whiteboard meeting where all the key people involved spend an afternoon figuring out details and documenting the requirements you have.

4. Take on industry expertise

More and more companies have begun to realize that CPQ is not a miracle cure in itself. Many companies that start working with CPQ assume that "we have a lot of product data – plug in a CPQ and let it tell us something interesting".
Here we see that we as consultants have an important role to play in moderating, questioning and provide industry best practices.

5. Realize the value of tests in reality

By making a rapid first version of your CPQ-system you’ll get a quick take part in multicultural, multilingual and even intergenerational insights and learn from them. By going live quickly and exposing the CPQs ability of the organization, you can quickly make customizations that make the system several hundred percent better.

6. Be aware of the "black box-problem"

Trust is another subject that CPQ is forced to face when it comes out in reality – something that is known as the black box problem. How can this be overcome? An important part is not to complicate things more than that they can be explained.
Often it is domino effects in product logic/price models that gives weird (but accurate) effects. Here it is important to be well prepared to explain and describe the logic in an educational way.

7. Establish clear measurements

Having clear operational measures for your CPQ-project is important to prove that it works – and deserves continued support. But many companies do not give this aspect sufficient attention in their CPQ projects.
This is a problem with emerging new technologies such as CPQ. The result is likely to be CPQ projects that are bridges to nowhere, pilots that are not scaled up and projects without any business value. Therefore, we do not make pilots. We make sure to go directly to production and in this way are the goals we set up linked to the company sales. It makes it very easy to judge what works and not.

8. Look inward

Where do you find people who can both understand CPQ and the requirements from the business? It is not an easy task. There is a clear lack of CPQ skills.
One often overlooked method to bring down skills shortages is to look internally to find people who can take CPQ trainings. This way you can work so that there are people who have both CPQ and industry expertise. This is a very important part of our deliveries. We see no long-term benefit of the system if it cannot be managed internally. Our role should only be consultative once we have released the first product.

Top 4 reasons why manufacturers choose a CPQ solution

What criteria can you use to determine if your company needs a CPQ solution? How can you tell when it’s time to invest in CPQ software?

I wouldn’t set out specific criteria as much as offer four reasons that I think will help you sort out an answer.

This is what we hear over and over again from clients and potential customers.

Spend more time selling

Is there a feeling that not enough selling is being done by your team? If so, this deserves your immediate attention.

Sales people are expensive and their primary role is to engage with customers and prospects. This is how your organization generates revenue.

Preparing quotations and proposal documentation is still a major tasks in many sales organizations. If this can be reduced there will be more time for actual selling. This is the first reason to invest in a CPQ solution.

Better proposals

A good quote delivers a vibrant, crisp and compelling proposals that distinguish you from the competition. A superior quote will persuade your customer and win more business.

Developing best practice for quotes, RFP documents and other sales documentation enables your team to increase the overall quality of the delivered proposals.

A better proposal will tell the customer that you will fulfill their needs and deliver what the customer wants. A better proposal that will provide important benefits and clearly describe the delivered value. A better proposal that validate that you have the right qualifications to fulfill the customer needs.

The proposal should send the message why your company better than anyone else can deliver the optimal solution with the highest value. This is the second reason to invest in a CPQ solution.

Get the price right

Working with complex products is somewhat problematic. To get the price right is a challenge and it makes a big difference when it comes to bottom line earnings.

The first problem: One option often requires another option. Forgetting that other option in a quote can be will severely reduce the profit. But to keep track of all options and exception is a difficult task that requires up-to-date knowledge.

The second problem: When multiple products are combined there is normally a reduction in price that only applies under certain conditions. To work with packages is an efficient way to expand the offering, but it also requires that up-to-date knowledge.

The third problem: In a changing world pricelists need to adopt fast. What was previously done on a yearly basis is nowadays more likely to be day-to-day updates. To be able to adopt to changing circumstances also requires that up-to-date knowledge.

The third reason to invest in a CPQ solution is the fact that up-to-date knowledge should be part of the CPQ package.

First to respond

When a customer asks for a quotation or proposal it’s unlikely the request is sent only to your company. The most likely scenario is that the same questions and requirements will be sent to up to a dozen competitors.

Companies with an implemented CPQ solutions reports that speed makes a difference when it comes to closing more deals. A rapid respond really makes a difference.

Being the first to respond will in itself not guarantee better business. But in combination with more time selling, better proposals and correct pricing it definitely makes a difference. That’s why it’s the forth reason to invest in a CPQ solution.

CPQ - Configure, price, quote software

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