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Quote-to-Subscription: Evolving Beyond Traditional CPQ

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Learn how traditional CPQ has transformed from a simple linear process to a multi-touch, multi-threaded customer engagement lifecycle.

Learn how traditional CPQ has transformed from a simple linear process to a multi-touch, multi-threaded customer engagement lifecycle.

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  • 1 speaker
  • -CPQ has traditionally been a linear process. That doesn’t mean it hasn’t had it’s own complications, input and decision points, and interaction model
    -However, subscription CPQ has different demands and therefore requires a different solution….
  • -Would like to tell the story of how this impacts business and plays directly into company strategy in a very real way using a few fictitious companies: one traditional hardware manufacturing and distribution company and one cloud based subscription business
  • -CJ to provide image that resonates with Widget Corps core strategy and business model
  • -CJ to provide image that resonates with Widget Corps core strategy and business model
  • -Currently charges are bundled together because there was not a way to separate them but force flow (assisted selling / bundle validation)
    -AE has a lot of choice of what product to choose based on what type of singup this is: system is not doing the work for them and limiting choice only to what is applicable to what they’ve previously told us about the customer
  • -Currently Add on products are selected at signup through quoting flow and manually processed if added later
    -Future goal would be to have quoting flow use amendment type/lifecycle event as input to product selector page
  • -Goal is to allow any logical relationship to the customer record from SFDC be a possible input into the quoting flow
    -We will accomplish this using the new features released in Titanium and the future release of Guided Selling and the product selection enhancements
    -This will allow us to separate subscription, usage, and setup and discount them separately while forcing selection of each component, it will allow us to build amendment flows for cancellation/save and upgrade/downgrade that are independent of new signup flow
    -Revisit previous slides and reference changes


  • 1. #Subscribed14 Quote-To-Subscription: Evolving Beyond Traditional CPQ André Pimentel Christian Jennings Business Applications
  • 2. 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
  • 4. Company A: Widget Corp CONFIDENTIAL 4 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:
  • 5. Traditional Business Model • Product/Revenue mix: Hardware & Networking Equipment (60%), Services & Support (25%) CONFIDENTIAL 5 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
  • 6. 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
  • 7. 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!
  • 8. CONFIDENTIAL 8 Cloud subscription business model • Product/Revenue mix: 90% recurring subscription business, 10% 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
  • 9. 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
  • 10. 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
  • 11. 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 Lifecycle VIDEO!
  • 12. Demandforce’s Lifecycle Management Roadmap: CONFIDENTIAL 12 • 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
  • 15. Current Quoting & Pricing Inputs:  Industry  Approval Level x SFDC Profile x Customer Size x Customer Lifecycle Stage x Primary Partner or Campaign Source CONFIDENTIAL 15 Future Quoting & Pricing Inputs:  Industry  Approval Level  SFDC Profile  Customer Size  Customer Lifecycle Stage  Primary Partner or Campaign Source QUOTING & PRICING ROADMAP