14 Sep Salesforce CPQ for the MedTech Industry
If there was a shortcut that would instantly increase your number of sales, save you money, increase the value of your product, and improve productivity, would you use it? Salesforce CPQ (configure, price, quote) provides that magic shortcut. The MedTech industry is constantly changing and evolving. As new products are introduced and consumer needs change, companies must be willing to change to meet the needs of their customers. Salesforce CPQ is a sales tool that quickly and accurately generates quotes for customers.
Not sure if Salesforce CPQ is right for your company? Continue reading to see and examine whether or not your company could benefit from Salesforce CPQ.
Salesforce CPQ is a robust, powerful tool meant for companies across all industries. Healthcare and medical companies are particularly well-suited for it, as they can build a tailored application that allows them to accelerate the lead-to-cash timeline and grow faster. From medical device companies and health insurance to even pharmacies, CPQ has a place in all types of healthcare organizations.
A decade ago, the Medical Device and Diagnostics (MedTech) industry was basking in the glow of over 10% revenue growth every year. More recently, this has declined by more than half. There are multiple factors impacting growth, ranging from changing customer expectations to more complex decision-making processes. Sales cycles are now more getting dragged longer, leading to slower revenue growth. In the coming years, it is predicted that growth will be driven by sales volume. In order to stay on the growth trajectory, medical device and diagnostics companies need to identify opportunities to counter changes in purchase methods and sales processes. So where do you begin the transformation and how do you move at the pace of business? To get a competitive advantage, you must look at building operational efficiencies, establishing innovative business models, and diving deeper into data and analytics.
Building operational efficiencies
A high percentage of sales and general administrative costs can be indicative of sales productivity issues. Productivity issues arise from sales reps having to look up product and pricing information manually, precious selling time is being spent on administrative tasks.
With advanced product configuration, contract management, and pricing automation, here at Cloudity, we can help you to reduce time wasted putting together the correct quote. Together, using CPQ, we can eliminate the possibility of reps creating quotes with inaccurate configurations or forgetting to include product training and support. We can take hours out of administrative work that your employees can then put back into selling activities and your operations team can put back into the business. Improving productivity creates a frictionless sale for your reps and a better buying experience for your customers.
Growing competition and new regulations in the marketplace demand efficiencies in order to maintain healthy margins and sustain growth. When reps have no constraints on discounting, you are left with dramatic price inconsistencies and oftentimes, declining margins.
Innovative business models in MedTech
In a marketplace that is extremely price-conscious, you need to determine how you can differentiate your products and services. A recent Boston Consulting Group report estimates that the MedTech services market will grow by roughly 50%, from $50 billion to $75 billion. Value-based offerings have become the decision driver for many hospitals and care providers. It is no longer just about the product – services, warranties, and consumables subscriptions need to be an important part of your go-to-market strategy. The advantage of building a holistic solution versus focusing on the product is twofold. Firstly, it delivers tangible value to the customer. Secondly, it builds a recurring revenue stream that provides steady cash flow. As you start thinking about new revenue channels, ensure you have the infrastructure to manage the recurring nature of revenue.
Quotes and contracts don’t stop with products. By creating service contracts with CPQ you can increase service revenue and have full visibility into product entitlements and case management. Service excellence can become a true source of competitive advantage while providing an additional source of revenue.
Data & Analytics
At the executive level, a lack of real-time insight into the average selling price, discount trends, and sales forecasts makes it challenging to make smart decisions for resource allocation within certain markets and geographies. Market intelligence around product revenue by product line, by channel, or by region helps sales leaders make smarter decisions.
With all of your sales data on a single platform, we provide management with visibility into pricing and discounting data that they never had access to before—allowing executives to pivot their commercial model according to what is required in order to win. Decisions can be made based on data such as average selling price within certain markets or geographies. You can focus your limited resources and budgets towards markets where there is the most opportunity. At the same time, CPQ enables reps to have visibility into contracted prices. Providing sales reps with the required contract and pricing information for all healthcare facilities within the same network gives them a much better position when it comes to price negotiations. A higher level of insight also helps you build trust with your customers.
HOW SALESFORCE CPQ WORKS?
Salesforce CPQ configured by Cloudity uses pre-programmed formulas to produce quotes quickly. Usually, a sales team must decide between spending hours to get an accurate quote to a customer or delivering a quick quote—which often results in incorrect prices or unapproved discounts. CPQ uses pre-programmed rules to consider every configuration, price, discount, and scenario to produce an accurate quote that will satisfy both the customer and CFO.
C Is for Configure
Rarely does one size fit all. A good salesperson guides customers to the best mix of products and services to solve their problems. CPQ software enables those sellers to configure unique combinations based on need, company size, and other relevant factors. It even suggests appropriate add-ons, such as extra training sessions, extended service contracts, or complementary products.
P Is for Price
How often do you sell at list price? Perhaps you offer special bundles or volume pricing, or maybe you allow extra discounts to sweeten the deal. Keeping track of current pricing and discounting can be a major headache. And, it can be disastrous to the bottom line when discounts are applied incorrectly or inconsistently. CPQ helps manage pricing for all your products and services. Advanced pricing rules can be set to handle volume discounts, percent- of-total subscriptions, pre-negotiated contract pricing, and channel and partner pricing.
Q Is for Quote
Once sales reps provide a quote, their focus should be on closing. They don’t want to worry about losing a deal because of a pricing error or a poorly formatted quote document. When reps create their own quotes manually, they risk typos, mismatched fonts, and so on, which can lead a prospect to think the rep is unprofessional, or worse, uncaring. With CPQ, a sales rep quickly generates a quote, sends it via email, and can even include e-signature options to close the deal in just a few clicks.
Market challenges underscore the need for MedTech companies to bring in automation and artificial intelligence in their sales processes. Salesforce CPQ helps establish pricing guardrails, build contracted pricing, and drive rep productivity.
Want to know more? Please schedule a 20-minute no-obligation call with one of our CPQ consultants.
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Article by Michał Mroczkiewicz.