Lane Four

Author: Stephanie Damgaard

  • When to Make the Leap to Salesforce CPQ

    When to Make the Leap to Salesforce CPQ

    Salesforce already offers out-of-the-box product and price books. It works well, plus, the product selection interface is getting a makeover in the next release (according to a DreamForce session I attended.) However, if your organization has a complex pricing model and you want to drive proposals using Salesforce, your Salesforce rep might suggest switching to  Salesforce CPQ.

    Salesforce CPQ (Configure, Price, Quote) is a comprehensive module that allows you to manage pricing, quotes, renewals and optionally billing (for a fee). Pricing varies depending on the edition, and the number of users for which you need licenses.

    So, should you make the leap to CPQ? At a certain point, your organization may require tools that are more powerful than the out-of-the-box Product, Quote and Opportunity Line Items objects in Salesforce. Here, I outline how to recognize if you’ve reached that point.

    Note, I will only discuss CPQ Pro, because if you’re already considering CPQ Premium, the out-of-the-box Salesforce tools aren’t for you.

    Salesforce Out-of-the-Box Tools

    Salesforce products and pricebooks allow you to create straightforward pricing models. This means:

    • A single independent product (i.e., 3 Genwatt Power Motors which sells for $1000 each and 2 Genwatt Connectors for $200 each)
    • These products can be grouped by pricebooks which allow for variable pricing for the same product (i.e., the same Genwatt Power Motor is $1,500 when sold to an enterprise)
    • The product model if fully customizable, meaning additional fields, formulas, compensation calculations, and more, are used by thousands of customers

    “What about proposals?”

    • You can use out-of-the-box Salesforce quotes and quote templates. (But note that this isn’t currently supported in Lightning, and hasn’t received a feature upgrade in years, so it’s generally not recommended.)
    • I typically recommend using a document generation AppExchange product like Conga or Drawloop . Both of these tools are far less expensive than CPQ and can generate documents on just about any data, meaning they work for MSAs, term sheets, and other types of documents. They also have native hooks for DocuSign, so, depending on your pricing model, you can create data-driven documents that can be automatically sent for signature.

    CPQ Pro

    According to Salesforce, this is the most popular Quote-to-Cash edition for businesses. CPQ Pro allows for complex product configuration, as well as dynamic pricing for partners and customers. Orders can be automated, as can renewals. There’s also the ability to forecast renewals. There are several tools for product configuration, including a product catalogue with advanced search and a product selector based on various parameters.

    Salesforce Billing

    This tool is essentially a billing extension for orders and subscriptions managed by CPQ. Invoices are automatically generated and orders are integrated with various payment gateways. Plus, reporting capabilities let you track various revenue metrics. If your company needs invoicing and tax management, subscription management, and reports to help track business analytics.

    “What is the key inflection point between out-of-the-box and CPQ?”

    Choose CPQ if your company has the following needs:

    1. “Complex” product configuration, which includes
      1. Bundling (picking a group of products and configuring these)
      2. Product dependencies (only sell product A when product B is in the mix)
      3. Pricing rules (volume discounts, or dependant product discounts)
    2. Dynamic data-driven proposals — CPQ has an advanced sales order generation mechanism. This means you can have variable headers, sections, terms, conditions, and so on. For example, if the deal size is greater than $10,000, you can add enterprise-level terms and conditions. This level of dynamic document generation is difficult in the above-mentioned document-generation tools.

    Note, this tool is fairly powerful, so it’s not suitable for long-form, text-filled documents; it’s best used for documents that have lots of merge fields and other such components. This tool will also require a good working knowledge of Salesforce objects, formulas, rich-text fields, and possibly HTML.

    1. Automated renewals — While there are some straightforward ways of creating renewal opportunities, CPQ does this in a fairly elegant way. Just be sure to deal with the headache of legacy contract data, as your renewal pipeline is only as good as the contract data you have managed.

    CPQ can be quite the investment, especially for larger teams. Make sure to figure out your company’s specific requirements to determine which features are actually needed. Verify that your company will use most—if not all—features of CPQ. For example, if your company has modest pricing complexity but a very simple sales order, I’d recommend sticking with the out-of-the-box tools until you actually need the dynamic proposal generation offered by CPQ.

    Finally, cost is a major factor here. CPQ implementations generally start at $15,000, with fully-managed implementations costing anywhere from $30,000 to $40,000. Add in the annual user cost of $75 per user, per month, and you need to ensure you’ve really made the business case for using this tool.

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  • To Kick Down the Door, Invest in Sales Enablement

    To Kick Down the Door, Invest in Sales Enablement

    A recent SalesTO gathering in Toronto focused on the topic of getting back to the enablement side of sales. If you’re a sales organization, this isn’t something that can be overlooked. If you want to achieve hockey-stick growth, you must invest in your enablement.

    Here were some takeaways from the event, which was moderated by Kenny Goldman of Sales at Helpful.

    Peer-to-Peer Enablement

    Elay Cohen, CEO of SalesHood, discussed how you can scale your training processes by allowing salespeople to learn from each other. So, for example, you can challenge sales reps to post pitches on an internal online portal, which means they can practice half a dozen times, while also viewing 10 other reps doing their own pitches and giving feedback. Encouraging them to share their pitches, whether online, or simply in-person with each other, ensures reps onboard faster. This will potentially build more quota and drive revenue.

    The 3 Pillars of Enablement

    Melissa Madian, SVP of Customer Experience Enablement at Vision Critical discussed the following key pillars:

    1. Recruitment: Any decent salesperson will, of course, be able to sell themselves. They will present well in an interview, they may even sound brilliant. But it isn’t enough to look for bright, hungry sales reps. You must test potential employees for the nitty-gritty aspects of your business and of your company culture. So if you are hiring for a field sales job, make sure the candidate can work independently. If they will be selling services, make sure that’s in their skill set, and that they’re not just good at selling a piece of software. Look for people that can sell your product, in your context.
    2. Onboarding: No sports team walks on to the field without having practiced first. Similarly, you can’t expect reps to perform well without first having them complete a solid onboarding program. Think like a good sports team and practice, practice, practice as you ramp up to the big game.
    3. Ongoing: Regularly provide knowledge training, maintain good enablement tools, and stick to a cadence of training.  This ensures that ongoing improvement is rooted into the culture of your sales organization. Scheduled pitch sessions, coaching and team kickoffs should be held on a regular and scheduled basis.

    Hockey Stick Growth

    Sheetal Jaitly and David Wright, CEO and COO, respectively, of TribalScale outlined the following traits of hockey stick growth:

    • The company has sales reps who are hungry for success
    • They don’t let budget get in the way: If they need to get on a plane to go see a customer, they do it. They measure the value, make a plan and go for it.
    • They aggressively pursue big deals with the confidence. They get smaller sales deals as well, but they don’t settle for these
    • The founders and sales reps all need that ‘boss mentality,’ meaning everyone is willing to own what they do and kick the door down, when needed.