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Making the most of Salesforce with a CPQ platform

Many businesses use Salesforce, so it needs little introduction, suffice to say that there must be good reasons for it being the world’s most popular Customer Relationship Management (CRM) ecosystem.

According to recent research, Salesforce employs 75,000 people and has an impressive customer list of 150,000 businesses using its core product.

Amongst its many features and benefits, Salesforce welcomes other developers to use APIs (Application Programming Interfaces) to ‘bolt on’ extra facilities and integrate them with the Salesforce platform.

CPQ in Salesforce is a specialized solution that seamlessly integrates Configure Price Quote (CPQ) functionality with the powerful Salesforce platform. With this integration, businesses can ensure the accuracy and profitability of their quotes while streamlining their sales process by leveraging the robust capabilities of Salesforce. Once managers approve a quote in Salesforce, the system can automatically send it to existing or prospective customers. Meanwhile, the CRM or Business Process Management (BPM) platform handles tasks such as invoicing, shipping timelines, contract control, customer satisfaction, online reviews, marketing, and more. By incorporating CPQ in Salesforce, businesses can benefit from a unified and efficient system that empowers their sales teams and enhances customer experiences.

So let’s concentrate on what CPQ software does and how it works, before any produced quote is passed to a business’s CRM, and then ultimately to the customer.

At first sight, it might seem to the rookie CPQ user that there is really nothing special in how the software works. CPQ uses Artificial Intelligence (AI) and a rules-based ‘decision tree’ architecture to handle the interrelationships between all the factors involved when producing a quote for a product or service. Initially, many people confuse a CPQ programming exercise as nothing other than a handy way to input pre-written formulae into a kind of spreadsheet framework. But they couldn’t be more wrong.

It’s true to say that for very simple businesses, neither a CRM nor a CPQ are required. Imagine for example a sole trader working from home producing A4 sized framed prints of scenic photos and selling them via an online shop. A spreadsheet might be used to itemize the cost of:

  •   Wood moldings for building the frames;
  •   Cardboard for the print mounts;
  •   Printing ink consumption for each average A4 or 8 x 10” picture;
  •   Price per sheet of photo printing paper;
  •   Packing material;
  •   Shipping prices.

A simple ‘sum’ formula would add together a column of the above six cells, and give a price for the production, postage and packing of a given product. Let’s say the total was $19. If it takes the trader an hour to print, frame and pack the item ready for collection by a courier, and the trader wants to make at least $25 per hour from their work, then the price of a print has to start at $44 per sale.

If the cost of printing ink or paper increases, the spreadsheet can be edited within moments to give a new total and required minimum sale price. Very easy.

Now let’s imagine that a very much bigger operation is selling framed prints and mirrors to order via high end galleries and interior design outlets. They might employ 200 people with a warehouse the size of an aircraft hangar. They offer ready-built products from greeting card-sized clip-framed prints to four foot by six foot tapestries weighing around 100 lb each. Customers are allowed to choose the mount they like, pick a frame molding from 200 samples, opt for non-reflective glass and decide upon the size of the mount rebate within the frame itself. The enterprise involved might be selling several hundred products per day, with a full production line of milling machines, wood turning lathes, print guillotines and a plethora of other tools.

This is definitely the sort of business that needs a CPQ platform built into a CRM system, simply because of the complexity of the factors involved in the manufacturing and sourcing of materials. A spreadsheet can still work out the costs of materials, but, crucially, it cannot warn against, nor plan a strategy around, incompatibilities of materials and processes involved in manufacturing processes.

Let’s say that customer A makes an order for a 36” x 48” print of a landscape photo by the celebrated photographer Ansel Adams. The order requires a 12” archival board around the actual image, which must be printed onto cotton-based luster paper. The frame surrounding print and mount must be built of a neutral pinewood 4” wide, with glued and stapled corner miters. The whole item would end up weighing 75 lbs. – which has implications for high-band shipping costs and requiring the supply of specific hanging brackets that would be strong enough to take the weight of the photo when hung on the customer’s wall.

The CPQ, having been programmed with all potential incompatibility conflict warnings, would advise the sales team that the cost price of the item would be the sum of all its parts at X, the final price being Y after profit, which equals Z after shipping and sales taxes. But it might also state, on its CPQ dashboard:

“Advisory: Archival board no longer available in 12” widths. Maximum 8” from Acme Boards Inc. Recommend sourcing board from [alternative provider], cost estimated at 15% addition from existing supplier…”

This is because the artificial intelligence in the CPQ scans the entire manufacturing process from beginning to end, and has ‘talked with’ the Salesforce CRM, which in turn has informed CPQ of a change of mount board supplier. In this way, it’s easy to see how the CRM can then be used to email the customer, advising them of either a reduced price for an 8” mount, or notify the extra cost and extra time involved in meeting the original 12” specification. The customer is not sent an inaccurate quote, nor do they suffer an unexpected delay in receiving their item.

There’s no way that a spreadsheet package like Excel  could do this. An experienced engineer would have to manually check each custom order to ascertain that there were no conflicts with the materials involved. But a CPQ platform lists every single item involved in fulfilling an order, from its pre-programmed memory, and its decision tree examines the compatibility of every other item required to manufacture the custom product. This ensures there are no conflicts or supply restrictions as above.

A CPQ platform, when integrated carefully with Salesforce, can mean the difference between a seamless supply, manufacture and output process – or a daily mess of epic proportions, where customers are disappointed, and staff are constantly correcting errors or taking shortcuts. Whether a company is selling furniture, fireplace surrounds or framed photographs, A Salesforce CPQ puts everyone in the picture.




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