Services sales can be complex and time consuming, but it doesn’t have to be. With the right tools and processes, selling services can be quick and efficient.
Configure, Price and Quote (CPQ) applications enable and automate the end-to-end process for Sales organizations to convert customer interests to formal quotes, closed deals, and ultimately cash. The quote to cash process for products can be highly automated with CPQ but the same level of efficiency for service statements of work may often require manual configuration steps to account for the added complexities of selling services.
When service sales processes require manual intervention, the entire action is slowed and errors in the pricing or configuration of service proposals are likely to be introduced. Well defined Configuration, Pricing and Quotation practices and tools for services – Services CPQ – are essential to quickly and accurately responding to customer needs for the service resources required to accelerate the time to value for products.
Elements of the Service CPQ process and required capabilities for service sales automation are described below.
The configure element of Services CPQ provides a streamlined process to capture customer needs, align needs to recommended service offers, and assures adherence to established service sales guidelines. The result is the rapid and accurate configuration of new complex service proposals.
Customer needs are rarely the same when deploying new or expanding existing products. To help customers accelerate product adoption and achieve the successful outcomes they need, vendors must be able to provide customized service configurations aligned to customers’ unique circumstances.
Rapid and accurate response to customer service needs must also be balanced with accurately configured and priced quotations.
Services CPQ must assure that following activities can be supported during the service configuration stage:
- Present available service catalog options such as access to expert resources, specific service activities or pre-defined outcomes as standalone service options or defined bundles.
- Define configuration guidelines including minimums, inclusions, prerequisites, and notable exceptions.
- Collect necessary customer-specific needs and environmental considerations through streamlined tools and processes.
- Align customer needs with available service catalog options to configure the appropriate service statement of work.
- Guided selling motions to enable Sales and Success teams to configure service proposals aligned to established guidelines and requirements.
The pricing element of Services CPQ determines pricing levels and discounting policies and establishes the necessary guardrails to assure that pricing policies are adhered to during proposal development. Through automation, sales workflows and system integration, pricing practices can be both consistent and accurate.
Every service resource and bundle starts with a base price. Effective proposal development requires that discounting rules and customer-specific terms can also be applied. The ability to automate service pricing minimizes the potential for errors and eliminates the creation of proposals with non-compliant pricing and discounting. Services CPQ must assure that the following activities can be supported during the service pricing stage:
- Enables access to list pricing for all service assets and bundles through the service catalog and/or integration with price books.
- Applies customer specific pricing terms to new service proposals through integration with contract and customer management systems.
- Recognizes and adjusts pricing based on regional considerations (e.g. where will the service resourced reside and work.)
- Establishes and reinforces compliance with discounting guidelines.
- Determines the approvals required based on size and terms of proposal.
The quotation element of Services CPQ is intended to pull all service entitlement, pricing and terms together in a final customer-ready quote within a matter of minutes, not days or weeks. Services CPQ should automate the creation of all selling documentation based on branded templates with up-to-date terms and conditions and facilitate the necessary approval workflow if necessary. Services CPQ must assure that the following can be supported during the quoting stage:
- Template-based document creation.
- Definition of and routing to required approvers.
- Preparation and delivery of customer-ready sales documentation.
- The means to capture customer acceptance with integrations into appropriate contract management.
- The ability to automatically update CRM, ERP and service delivery platforms.
Services CPQ Benefits
Services and the means to sell them are imperative. With the right resources Sales can quickly and accurately discover, understand, configure, price, and quote services. Services CPQ tools and processes are fundamental to selling services. The measurable benefits of Services CPQ solutions are realized when complex service quotations can be quickly and accurately prepared and presented to customers.
When companies lack the means to configure and sell the services customers need, product adoption and achievement of successful outcomes is inhibited. When adoption and success is impeded, the potential for customer churn increases placing recurring revenue at risk.