Monday, 04 July 2022 10:09

What are the limitations of CPQ in Salesforce?

By Jacob Davis

GUEST OPINION: One of the features that Salesforce is known for is its CPQ feature.

With Salesforce CPQ, organizations can now seamlessly implement cloud-based B2B purchasing. CPQ helps with sales performance management and optimized revenue. However, there are certain limitations to the product.

These limitations of CPQ in Salesforce affect the functionality and how efficiently the system operates when put into a particular business context.

What Is Salesforce CPQ?

Salesforce CPQ (configure, price, quote) is a configurable product application that enables businesses to create and manage quotes, proposals, and contracts.

CPQ helps you close more deals faster by allowing your sales team to build quotes in-line with customer demand and automate the quoting process for faster approval cycles.

In a report published by Accenture, 83% of sales professionals are now using a configure, price, quote (CPQ) solution for their operations. It also allows your sales team to create proposals and contracts based on customer requirements so that you can deliver the right solution at the right time.

This solution enables you to:

  • Create quotes based on the buyer's needs.
  • Reduce quote mistakes by eliminating errors in pricing, product configuration, or other parameters.
  • Manage quotes for all phases of the buying process — from quotation to order management.
  • Automate quotation processes so your reps have more time to focus on closing deals.

How Does CPQ In Salesforce Work?

CPQ stands for Configure Price Quote, a feature in Salesforce that allows you to create a quote, which can be sent to customers via email or printed.

CPQ allows you to configure your products and services based on customer requirements quickly. CPQ also enables you to set up pricing policies for different product configurations.

These policies can then be applied across the entire organization or just to specific salespeople. You can also use CPQ to configure other things like discounting rules and shipping rates.

When a customer requests a quote, the CPQ engine looks at their request and creates a quote based on their needs. The system then sends out a quote via email or prints it out so that the salesperson can present it to them in person.

Limitations Of CPQ In Salesforce

CPQ is an essential new feature in Salesforce. It's available in most core, Enterprise, and Unlimited editions.

Salespeople using Salesforce CPQ generate quotes 36% faster and reduce invoicing errors by 27%. However, CPQ comes with a few limitations. Here are a few things to consider when you're planning your implementation:

1.   Include percent of total lines when you reduce a covered asset

When reducing a covered asset, the default behaviour is to include the percentage of lines that this asset represents in your portfolio.

For example, if you want to reduce a laptop that represents 10% of your total laptops, you will need to reduce 10% of all the other laptops in the portfolio.

You can change this behaviour by editing the configuration and changing "Include percent of total lines when you reduce a covered asset" to "Don't include." It will allow you to specify precisely how many items need to be reduced on each line item.

2.   Include bundle components when you reduce the parent bundle

This is one of the most important limitations and can cause severe problems if followed incorrectly. When creating a new price book and adding a product, there is an option on the Price Book page for including bundle components when reducing the parent bundle.

If this option is not checked, the system will only allow you to enter quantities for the individual item when creating an offer for a product in a price book.

If you have included bundle components, it will show up in your offers and quantity options for each of those bundles. For example, if I create a request using the Product, A price book with Product A and Product B included, I can only choose either A or B individually and not both.

3.   Create price schedules

You have to have created an opportunity for the customer.

The quote line items must be based on a pricing schedule, not an item. The quote line items cannot include any modifiers or option sets.

You can only select one item per price schedule. If you want multiple items in your quote, you must create various price schedules and link them together in the Quote Workbook.

4.   Consider the price calculation status when you activate an order

When you create an order, the price calculation status determines how the Price Book is used to calculate the price of an order.

If you don't select a price calculation status, Salesforce uses a default value. The default value depends on your Price Book:

If your Price Book has no unapplied changes and no pending changes, then Salesforce uses the "No Pending Changes" status by default. For example, if you have orders created before you can make this change, they might not use the new pricing formula until they are activated.

Your prices may be incorrect until you apply or reject those changes.

5.   Create a contract, subscription, or asset

The biggest drawback is that CPQ is not integrable with other Salesforce products. It means you can't create a contract, subscription, or asset from a quote, and you can't make an opportunity based on a quote.

Another limitation is that it doesn't allow you to configure items in batches. For example, if you have 20 different configurations of one item, you'd have to configure them all individually — one at a time — instead of all at once.

Finally, it's worth noting that CPQ doesn't come with its data warehouse or analytics tools; these are different products that you'll need to buy separately.

Wrapping up

In a nutshell, CPQ tools are intended to streamline sales processes and reduce the time it takes to create deals.

While this is true, CPQ solutions have their limitations. To truly maximize the value of a CPQ system, you must engage sales reps in the workflow by contributing insights along the way. It can lead to faster decision-making and better deals for your business!

In addition, if you're still learning the nuances of CPQ, review the documentation and get help from a third-party consultant or training.

About the Author:

Jacob Davis is a data analyst and strategist working in the Israeli startup tech space for the last decade. Jacob specializes in turning unstructured alternative data into actionable decision-making. His passion is uncovering stories and trends in the digital space and turning data into stories

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