14 Aug Using CPQ and CLM to increase revenue and decrease the sales cycle
One of the most common ways to increase revenue is to decrease the sales cycle. But that’s not as easy as it sounds. SiriusDecisions, a popular online resource for salespeople, said: “The average sales cycle has increased almost 25% in the past six years.” That’s a big jump and not a fun statistic to those wanting to be successful in sales anytime soon. CSO Insights World-Class Sales Practices Report stated that “the percentage of salespeople hitting their quotas has dropped from 63% to 53% in the past six years,” and it also found that “just 61% of salespeople feel they’re good at identifying customers’ pain points and identifying those pain points is a primary key to winning sales.
Kyle Hanagarne, EVP of Sales at Simplus ANZ, and Amy Cook, CMO at Simplus, jumped on the Revenue Growth University Podcast to talk about how to better understand your sales cycle, including tips and tricks for using CPQ and CLM to shorten quoting and contracting processes.
Pull the Numbers
To figure out where you’re going, and before you can put together a plan on how to get there, you need to figure out exactly where you are.
“What you need to do is break it up into the different pieces and isolate how many days are spent trying to schedule your appointments with your customer,” said Kyle. “How many days are spent actually doing a needs assessment? How many days are spent making your proposal? How many days are spent in legal review? How many days were spent in finance, approvals, etc.? You need to really, really break it down so you can see the numbers.”
Hone in using CPQ
The next step is honing in on how to use CPQ to shorten the proposal time, quote, generation time, etc. With a Salesforce CPQ solution, Simplus has seen an average of 66% decrease in quote creation time and a 29% increase in quota attainment with clients across the board. That’s pretty significant. And since more than 50% of customer loyalty is based on the sales experience from calling to closing, according to The Harvard Business Review, it should be a high priority to all businesses.
Then comes CLM
The legal approval side, the terms and conditions, the red line stuff—that’s where CLM comes in and makes the journey not only quicker but increases the likelihood of a successful close. “With the ultimate kind of value being something to the effect of, if your sales cycle is 30 days and you can cut five days out of that sales cycle, you can essentially increase your sales by 17% with the same amount of salespeople,” said Kyle. CLM and CPQ add speed to your revenue growth. That’s what it’s all about: adding speed and efficiency to processes without sacrificing quality.
Want to hear the full podcast? Click here.