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Quote-To-Subscription:
Evolving BeyondTraditional CPQ
André PimentelChristian Jennings
Business Applications
CONFIDENTIAL 2
CPQ has transformed from a linear process to a multi-touch, multi-threaded customer engagement lifecycle…
Success
Renewal
Cancel Request
Upgrade/ Downgrade
Initial Sale
IPD
Engagement w/ Customers is a
series of Touchpoints &
Lifecycle events
CPQ CONUNDRUM
CONFIDENTIAL 4
Company A: Widget Corp
TRADITIONAL CPQ
“Buy all of the widgets!!!!”
• Sell the customer as much as possible in any single transaction.
• Offer discounts on add-ons if purchased at the same time.
• Greater flexibility for the customer but may result in customer feeling confused and as if there are many hidden costs.
COMPANY GOALS:
CONFIDENTIAL 5
Traditional Business Model
• Product/Revenue mix: Hardware & Networking Equipment (60%), Software (15%), Premium Services & Support (25%)
WIDGET CORP
TRADITIONAL CPQ
Customer-facing CPQ Workflow
Product Line
Core Product
Required Add-ons/ Features
Optional Add-ons
Service & Support Options
• Works well for one-time transaction but not for relationship-based selling
TRADITIONAL CPQ
CONFIDENTIAL 6
WIDGET CORP
One-time Interaction We are selling you these things and we want to maximize
that sale now
Configure the widget Add options
CONFIDENTIAL 7
Company B: Cloud Inc.
“Come check us out so we can start forming a relationship and offering value add services & products.”
CLOUD CPQ
COMPANY GOALS: • Customer acquisition: GET YOU IN THE DOOR• Form a relationship, upgrade, and retain• Want you to feel like you’re getting all these features for
only $X!
CONFIDENTIAL 8
Cloud subscription business model
• Product/Revenue mix: 90% recurring subscription business, 10% add on and usage based products
CLOUD CPQ
CLOUD INC
Cloud Inc Imperatives• Rely on recurring revenue (generally only break even in year 1
for paying customer)- Have 100+ features and products inside core platform
• Cloud Inc initially tried CPQ: let the user pick their features
• Customers tended to choose fewer features to reduce price• Cloud Inc has several core product features directly tied to retention: they need customers to use these features to see great value out of their product
CONFIDENTIAL 9
Success
Renewal
Cancel Request
Upgrade/ Downgrade
Initial Sale
IPD
Align CPQ to subscription
lifecycle management
CLOUD CPQ
Feature & Pricing Bundling with Zuora = Cloud CPQ
CLOUD INC’S CPQ SOLUTION
• Bundling with advanced discounting configuration• Optional add-ons• Upgrades and downgrades• Lifecycle
management
CONFIDENTIAL 10
PROS
CLOUD CPQ PROS AND CONS
Cloud Inc must fight to keep customers engaged so that they continue paying for the service
Cloud Inc offerings are transparent Clear difference in packages offered
Cloud Inc has a recurring revenue stream
Cloud Inc has vast upsell opportunity to their install base
Focus on ease of sign up and the transparency of the monetization strategy
CONS
Cloud Inc must sell you the value proposition of add on services and upgrades Cloud Inc needs a CPQ system/method that provides the flexibility necessary to manage the entire customer lifecycle
DRUMROLL PLEASE
Cloud Inc = Demandforce!
• Cloud based marketing and communications platform
• Many features and value add services that drive customer growth and retention
CONFIDENTIAL 11
WE HAVE A SECRET TO SHARE
Attach
Renewal
Save/Retain
Sale
Our Lifecycl
e
VIDEO!
CONFIDENTIAL 12
Demandforce’s Lifecycle Management Roadmap:
• Un-package and re-bundle charges & discounts• Allow for greater pricing model flexibility• Enable any-time upgrades and downgrades• Restrict (AE) choice with configurable
logic
GOAL: ALIGN QUOTING AND PRICING CAPABILITIES TO DF CUSTOMER LIFECYCLE
QUOTING & PRICING ROADMAP
CONFIDENTIAL 15
Current Quoting & Pricing Inputs:
Industry
Approval Level
x SFDC Profile
x Customer Size
x Customer Lifecycle Stage
x Primary Partner or Campaign Source
Future Quoting & Pricing Inputs:
Industry
Approval Level
SFDC Profile
Customer Size
Customer Lifecycle Stage
Primary Partner or Campaign Source
QUOTING & PRICING ROADMAP
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