Real-time integration between Enterprise Resource Planning (ERP), pricing, product catalogs, CRM-based CPQ applications is the most powerful catalyst for moving sales cycles forward. The five metrics discussed quantify how quickly sales cycles can improve when ERP systems including SAP R/3 are providing real-time pricing, product availability and configuration data to Salesforce. All these integration points enabled in real-time contribute to the moment of truth when a sales person sits in front of a customer, creates a quote and wins an order by being the first to respond.
- The most successful Configure-Price-Quote (CPQ) selling strategies prioritize speed and responsiveness, knowing that the first complete quote received by a prospect wins the deal the majority of the time.
- Real-time integration is a must-have in any CPQ selling strategy as it directly reduces average sales cycle length and time-to-quote.
- The more customer intelligence is available during quoting, the higher the probability of close as the quote will reflect their most current priorities.
Real-Time Integration Is Jet Fuel For These Five CPQ Metrics
By enabling real-time sharing of data, insights and knowledge across sales, sales operations and services teams, sales representatives can capitalize on new opportunities faster and close them quicker. With real-time data integration they have the data and specific products that are available for cross-sell and up-sell to specific customers.
Sales teams no longer have to be constrained by having the most valuable data in the company locked in an SAP R/3 system for example. Creating real-time integration between SAP R/3 and Salesforce CRM systems is the jet fuel that makes these five metrics of CPQ selling move. The five metrics include the following:
- Quote Cycle Time – The total time it takes to create a finished quote and return it back to a client. This metric measures the efficiency and speed of a real-time integration between diverse systems including ERP, CRM and pricing that enable CPQ strategies to be successful. Without real-time integration quote cycle times can range to days or weeks, especially for complex products. Once real-time integration between ERP and CRM systems is in place this can be trimmed to hours or minutes.
- Quote Conversion Rate – The percentage of quotes produced that lead to closed sales, this metric reflects how well orchestrated a company is at putting the best possible quotes together in the shortest possible time that meet customer requirements. Quote conversion rates provide insights into what can be done more effectively in a quote workflow to make sales more competitive as well. Successful quote conversions are the result of having real-time pricing, product and manufacturing data from an ERP system available in real-time within CPQ apps that sales teams are using daily.
- Average Quote Revenue Value – Quantifies how well sales teams are capitalizing on having all product, pricing and availability data in Salesforce from an SAP integration by tracking quote revenue uplifts from cross-selling and upsell strategies. Average quote revenue value also captures the effectiveness of pricing discounts, sales promotions and bundles on improving overall revenue value per quote.
- Average Monthly Quotes Per Sales Rep – Measuring sales productivity using this metric quantifies the usability aspects of a CPQ app and the value of existing data available within it. Often sales teams aren’t getting the greatest number of quotes out due to limitations in which systems they can get data from. By enabling real-time integration between ERP, pricing, services and CRM systems, sales reps have all the data they need in real-time to create effective quotes. A related metric is Quote Cycle Time as both will see positive growth when the real-time integration of ERP data is made available in CPQ apps.
- Percent Quote-To-Order Accuracy – One of the most important metrics is the percent of quotes that lead to the right product being produced to the exact customer requirements and delivered on time. Knowing the percentage of quotes that are accurate the first time and lead to production orders that are fulfilled with no errors is invaluable. Another reason is metric is so useful is that it tracks the accuracy of data obtained via real-time integration links and its contributions to quoting and order accuracy.
Bottom line: Improving CPQ sales performance needs to start with a core set of metrics that are defined here. These five metrics provide a solid foundation to build from in determining how real-time integration can fuel even greater CPQ selling success and sales growth.