Bottom line: Sales effectiveness is going through an inflexion point driven by rapid advances in cloud computing platforms and applications. Changing business models, emergence of everything-as-a-service, the subscription economy, and revenues tied to long-term contracts all require a more unified view of customers that includes quotes, contracts and transactions.
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From companies presenting the results of sales effectiveness strategies at Dreamforce 2013 last October to the continued consolidation of the Configure Price Quote (CPQ) market including three major acquisitions in the last year, sales effectiveness is changing quickly to encompass quotes, contracts and transactional data spanning quote or opportunity to cash. Salesforce and all companies mentioned in this post are not now and have never been clients of mine or of my employer Plex Systems.
Quote-To-Cash Is The Future of Sales Effectiveness
Moving beyond the front office, sales effectiveness is getting more defined by how companies are choosing to integrate customer, quote, contract and transaction data, all aimed at gaining a more unified view of the customer. From the manufacturers I regularly speak with and the presentations at conferences attended, it’s evident the days of sales effectiveness being tactical are numbered.
More companies want visibility from quote-to-cash or opportunity-to cash to-increase deal sizes and reduce selling cycles. Contracts are the catalyst that are revolutionizing sales effectiveness in the manufacturers spoken with.
The Salesforce platform and the many applications built in it are also accelerating sales effectiveness’ shift from tactical to strategic. Gartner calls this expansion of sales effectiveness opportunity-to-cash in a recently revised report, Configure, Price and Quote Tools Help Redefine the Sales Experience by Praveen Sengar published July 12, 2012 and updated earlier this month on January 8. A recent new service introduction from Deloitte called CloudMix includes Tweet to Cash and Tweet to Care process automation workflows. For purposes of this post, I’ll use quote-to-cash.
Presentations at Dreamforce 2013 by Ceridian, Global Foundries, Hewlett-Packard and NXP Semiconductors and others, in addition to conferences attended and companies spoken with all underscore how cloud platforms are enabling sales effectiveness to move beyond its tactical boundaries.
Here are the five lessons learned for these and additional companies spoken with regarding how cloud platforms are giving them the agility to redefine sales effectiveness for their unique requirements:
- Removing the roadblocks between quoting, pricing, contracts and product configuration to CRM and ERP systems is revolutionizing sales effectiveness. When companies break down these roadblocks and choose to create a corporate-wide sales effectiveness strategy, deal cycles and sizes increase. Being a fan of the CPQ market for many years, I keep this graph updated showing the business impact of streamlined quote-to-cash processes. Sources for this include interviews with over a dozen companies.
- Sales effectiveness is rapidly changing to provide contextually- and personally-relevant content, offers, bundles, upsells and cross-sells. Cloud-based platforms that include analytics are making it possible to recommend, price and bundle products based on a customers’ previous purchasing preferences. A few companies are using previous purchase data and constraint-based business rules. This personalizes the selling experience, increases customer retention and leads to more profitable sales as well as prices are optimized for each customer.
- Automating pricing to the quote and proposal level with real-time visibility into product line, sales channel and sales team level performance. Pricing analytics, cost estimation and reduction of special pricing requests (SPR) is within reach of more companies now that cloud platforms including the Salesforce platform and its application base are supporting these areas. A platform approach can nearly eliminate special pricing request (SPR) errors on high volume, low margin products and retain as much profit as possible. I’m also seeing more companies move from simple price execution and enforcement to system-driven price guidance, all based on cloud platforms providing greater analytics and better visibility into quotes, contracts and price history.
- Greater accuracy and visibility of order management and fulfillment. It’s ironic that companies who often said that cloud platforms didn’t have enough integration depth are today sending their developers to learn Salesforce APIs. This is especially the case in high tech and aerospace electronics firms. Distributed order management and the orchestration of suppliers, customers and the internal constraints of manufacturing and production is becoming part of sales effectiveness and driving opportunity-to-cash strategies today.
- Management by exception on mobile devices from literally anywhere. At NXP Semiconductors the sales team primarily relies on its smartphones and tablets to close business. Like many high tech manufacturers, they use a managing by exception approach for automating and accelerating sales cycles. Automated quote, pricing and deal approvals provide guard rails for sales reps, ensuring they make decisions within prescribed policies to accelerate sales cycles. Exceptions are routed back to sales management, the majority of which also primarily use smartphones and tablets. Giving sales and senior management the flexibility of managing by exception accelerates sales cycles, can increase deal size and improves sales effectiveness quickly.