Salesforce CPQ or Standard Quotes: Making The Right Choice

By RafterOne
salesforce-cpq-or-standard-quotes-making-the-right-choice

CPQ and billing are two of the most significant pain points that B2B ecommerce companies deal with. Ironically, they are also the most significant determiners of future buying behavior. Making the CPQ-billing process automated, personalized, and seamless is the only way forward as it dramatically increases customer retention and helps to grow revenue. 

Personalization in the B2B e-commerce market is critical because even though overall number of orders is lesser, the volume of purchases is massive. As a result, every step of the B2B buyer journey mapping must be distinct in each case, including the CPQ process. 

In the B2B ecommerce marketplace, repeat business is a primary source of revenue, which means a personalized customer experience increases revenue and loyalty and one of the most crucial steps in the path to increasing revenue growth is applying a tailored B2B commerce strategy in the CPQ and billing method for each client. 

The “Empowering Your Sales Force: It’s Not Just Automation, It’s Personal” study by Accenture Interactive reveals how 83% of sales employees use some kind of CPQ tool to make their lives easier. Moreover, according to “Gartner’s Magic Quadrant for Configure, Price and Quote Application Suites”,  71% of people usually upgrade from a less advanced and feature-loaded, basic solution to a dedicated CPQ platform. 

The results are quite apparent if we look at Cincom’s insights on CPQ-related business outcome metrics. With 8.2 times greater margins in lead conversions, 7.5 times higher year-over-year increases in renewal rates, 1.6 times higher year-over-year decrease in errors, and 21% better efficiency in generating complicated quotes in time, it is easy to see how CPQ helps businesses increase their revenue in e-commerce selling. 

Salesforce CPQ & Billing 

Many B2B commerce solutions have started offering advanced CPQ tools or provide dedicated CPQ software for small businesses, mid-sized companies, and large corporations. 

The Salesforce ecommerce integration for CPQ is a leading one. There is a basic, in-built Salesforce billing module called Salesforce Standard Quoting. But for businesses with advanced needs, this is usually not enough, and Salesforce CPQ does a much better job for them. However, this is not always true. We will compare various scenarios in the next section.  

Salesforce CPQ Billing vs Standard Quoting  

The features offered by Salesforce Standard Quoting are: 

  • Standard Product and Pricebook objects 
  • Introductory list pricing, discounting, and bundling features 
  • Standard Contract and Asset objects 
  • Standard product validation 
  • Multi-currency compatibility 
  • Basic quote document generation 
  • Integration with e-signature tools 
  • A drag-and-drop quote template editor 
  • Standard approval process 

In contrast, Salesforce CPQ solutions include the following features: 

  • Standard Product and Pricebook objects 
  • Standard Contract and Asset objects 
  • Multi-currency compatibility 
  • Integration with e-signature tools 
  • Robust subscription product capabilities 
  • Automated contract and quote renewals 
  • Standard approval process 
  • List, cost-based, and block pricing 
  • Advanced discounting options like volume discounting, multi-tiered discounting, automatic discounting, partner/distributor discounting, etc. 
  • Custom product bundling 
  • Multi-record product validation 
  • Dynamic quote document generation 
  • Connectivity with customer community for self-service of quote creation 

It is easy to see why companies with complex products, discount, and renewal rules would want to upgrade to this state-of-the-art ecommerce implementation of Salesforce CPQ & Billing. 

However, the above Salesforce CPQ features come in handy in such intricate situations only. The configured price quote Salesforce facilities will be overkill for businesses with a straightforward product and pricing model. 

Should You Use Salesforce CPQ Billing or Standard Quoting? 

The pros of Salesforce CPQ are especially apparent if any of the following apply to you:  

1) You Offer Subscription Products 

Today, more and more businesses are adopting the subscription model across B2C and B2B markets. 

CPQ for B2B subscriptions requires multi-dimensional quoting to ensure that the same statement can be reused every year, even with changes, without requiring new quotes from scratch every year. 

The Salesforce subscription billing features of its CPQ software support actions are limited to recurring business-like renewals, cancellations, and add-ons. 

When you quote subscriptions with CPQ, you can easily add these interactive options within the customer interface.  

2) Your Products Are Sold in Bundles 

While Salesforce recurring billing takes care of products sold over the years, there is also the situation where you sell specific products with each other, i.e., in bundles. It includes cases where certain products must be bought together; others cannot be grouped into a bundle; certain products have upper and lower limits over the number or type you can buy, etc. 

In some cases, all these rules may apply at the same time. Remembering and using the right rule at the right place and time is impossible. But, Salesforce CPQ configuration features allow you to define these rules beforehand so that the process of quote provision and contract creation itself remains fast and smooth. 

3) You Sell Products with Complex Price Rules and Dependencies  

Products can also have rules and logic dictating what a specific product will cost depending on what other products the business is buying or buys. Tiered pricing and buying history-based pricing are standard in B2B customer journeys. These are also difficult to remember and manage. Errors and inconsistencies can cost a company precious business. 

The best way to avoid them is through automated quotes in CPQ that incorporate these rules after defining them once. With the Salesforce billing software, this step is made accurate, easy, and fast. Not only are sales reps relieved, but customers are satisfied too. 

4) You Require Multi-Channel Configure Price Quote 

If you sell a product that finds use in industries with zero relation to each other, it is natural for the rules and metrics to be different too. Setting the right rules each time becomes a tedious job and slows down the CPQ process. 

In turn, the client also gets turned off. But you can create custom objects for CPQ in the Salesforce billing platform. Only by using the right thing in the right place will all the proper rules be automatically applied for that sales channel.  

5) You Provide Rule-Dependent Discounts 

The ecommerce lifecycle of a B2B client inevitably involves discounts tied to loyalty and volume of purchase. The better your offers, the longer a customer will be hooked on to you. Multi-year deals, tiered discounts, volume discounts, etc., are some of these types. 

Manually applying these will make the system heterogenous and partial, leading to customer dissatisfaction and complaints. 

But you can define and apply complex rules to keep the process fair, satisfy customers, resolve complaints, and increase revenue streams with CPQ.

6) You Sell Through Partners and Distributors 

When your business sells through partners and distributors instead of directly to customers, product and price rules are bound to be far more convoluted. 

Renewals are also involved in most cases. There will inevitably be multiple contract start dates, warehousing needs, and shipping locations. All these must be reflected in the quote and contract.  

Using quote management in Salesforce CPQ, you can optimize the process smoothly. With Salesforce invoice generation, you make it easy for the Finance department to deal with accounts. 

While we know how CPQ can increase B2B ecommerce revenue, there are times it can slow operations down too. For example: 

  • There is no WYSIWYG Quote Template editor, so you would be stuck with a template or the original format if you do not have technical expertise. 
  • With many new and custom objects, the permissions and accessibility rules become much more complex and prone to mistakes. 
  • The complexity also makes the learning curve steeper. 
  • The entire migration and implementation process gives rise to many unexpected situations and requires a buffer period and extensive documentation. 
  • If subscriptions, product and price dependencies, and complex discounts are not part of your B2B e-commerce sales process, Salesforce CPQ is overkill, and Standard Quoting will be enough.

Conclusion 

If you are trying to decide if it would be wise to switch from Salesforce Standard Quoting to Salesforce CPQ, this post should give you the guidance you require. 

If you want to know more about what Salesforce CPQ offers, check out this detailed blog post on Salesforce CPQ and Billing.