The Salesforce CPQ Implementation Handbook E-Book

Madhu Ramanujan

• Herausgeber: Packt Publishing
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 378

Veröffentlichungsjahr: 2022

Beschreibung

Salesforce CPQ is innovative software that enables you create better quotes, improve quoting accuracy, and maximize sales and deals. It also provides a quick analysis of profits and losses, helping you improve the overall execution of sales processes, and allows a great deal of flexibility for your prospects, customers, and business partners.
The book starts with the Quote-2-Cash business process in Salesforce and shows you how to assess when a business needs to implement CPQ. You’ll then progress to configuring opportunities, quotes, and CPQ products. As you advance, you’ll understand how to define and configure price books, price rules for CPQ quote automation, multidimensional quoting, and more. Next, you'll look at how to configure CPQ guided selling and create package configurations, contracts, and amendments. Later chapters will demonstrate how to perform data migration from a legacy system and the order in which the objects are to be migrated. You’ll also explore CPQ billing and its advantages with the help of different use cases before learning about Industries CPQ and how it is different from standard Salesforce CPQ. Finally, you’ll discover best practices for achieving optimal CPQ performance and avoiding performance bottlenecks.
By the end of this Salesforce book, you’ll be able to implement Salesforce CPQ for any business.

Leseprobe

Salesforce CPQ Implementation Handbook

Configure Salesforce CPQ products to close more deals and generate higher revenue for your business

Madhu Ramanujan

BIRMINGHAM—MUMBAI

Salesforce CPQ Implementation Handbook

Copyright © 2022 Packt Publishing

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Packt Publishing has endeavored to provide trademark information about all of the companies and products mentioned in this book by the appropriate use of capitals. However, Packt Publishing cannot guarantee the accuracy of this information.

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First published: March 2022

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Published by Packt Publishing Ltd.

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ISBN 978-1-80107-742-2

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To my parents and siblings, who taught me the value of education. To my husband and daughters, for their support and inspiration throughout my writing journey.

Contributors

About the author

Madhu Ramanujan has been extensively using the Salesforce platform for almost a decade now. She finds that her substantial experience and work on multiple implementations has helped her easily transition between various roles in renowned corporations. She is a certified Salesforce Application Architect and System Architect and is an aspiring CTA with 14x certifications. She enjoys giving back to the community through volunteering as a RAD Women coach. She is passionate about designing secure, scalable, reliable, and high-performing solutions using cutting-edge technologies and helping customers in their transformational journeys.

I want to thank the following people from the Packt team, who helped make this book that you are holding in your hands a reality: Alok Dhuri, for having faith in my ability to write this book, as well as Storm Mann, Vaishali Ramkumar, Prajakta Naik, Aaron Lazar, Shweta Bairoliya, Nisha Cleetus, Rosal Colaco, Maran Fernandes, and Deepak Kumar. A big thanks to the reviewers, Brad Gross and Mitch Colyer, for their invaluable suggestions and helpful feedback. I would also like to thank all of my friends and colleagues who helped me in this wonderful process. A virtual high-five and a lot of gratitude from me to all of you!

About the reviewers

Brad Gross has been working in IT since the 20th century. In 2000, he developed one of the first Salesforce organizations and then turned his attention to helping others learn Salesforce. His work in the community led to his induction into the first class of Salesforce MVPs and the first-class Salesforce MVP Hall of Fame. For the past decade, he has been a leading industry consultant, working for several firms and even founding his own firm, Information Logistics. Currently working as the principal strategist for revenue cloud at Traction on Demand, his focus is on Sales Cloud and revenue operations.

When he is not developing the next generation of Salesforce leaders, he spends his time biking, skiing, and cooking for his family.

Mitch Colyer is a principal quote-to-cash consultant, specializing in Salesforce CPQ, Salesforce Billing, and other non-Salesforce product implementations. His experience inside and outside of the Salesforce platform lends him a unique perspective on how to best bring a Salesforce CPQ solution to light. Throughout his time working on the Salesforce platform, Mitch has led partner enablement training both domestically and internationally, been a Dreamforce speaker, and assisted in Salesforce CPQ and Billing rollouts in the United States and Europe. He lives with his wife, Brooke, in Montana, where he enjoys being outdoors, fishing, and trail running in his free time.

Table of Contents

Preface

Section 1: Getting Started with Salesforce CPQ Implementation

Chapter 1: Getting Started with Salesforce CPQ Implementation

The relationship between the sales process and cloud computing

Understanding the quote-to-cash process

Introducing Salesforce CPQ

Configure

Price

Quote

CPQ high-level object flow

Salesforce CPQ advantages

Salesforce CPQ versus Industries CPQ

Installing Salesforce CPQ

Summary

Chapter 2: Configuring Opportunities and Quotes

Salesforce opportunities, quotes, and products

Opportunities

Quotes

Products

Introducing CPQ quotes

Enabling CPQ permission set licenses

Creating a quote

The Quote Line Editor

Field sets

Quote line drawers

Sorting QLE line columns

Default buttons on the QLE

Custom buttons in the QLE

Cloning a quote line

Customizing the QLE column width

CPQ approvals

Standard approvals

Advanced Approvals

AA objects

Advantages of creating orders from a quote

Enabling orders

Summary

Chapter 3: Configuring CPQ Products

Products overview

Types of products

Configuring products

Creating custom actions and search filters

Creating custom actions

Creating a search filter

Verifying custom actions in the QLE

Creating dynamic search filters

Configuring product bundles

Creating a product bundle in a Salesforce instance

Creating a product option in a Salesforce instance

Creating a product feature in a Salesforce instance

Adding a bundle to the QLE

Creating product rules

Creating a validation product rule

Creating a summary variable and an error condition

Associating a product rule with a product bundle

Testing the validation product rule in the QLE

Creating an alert product rule

Creating an alert product rule error condition

Testing the validation product rule in the QLE

Creating a selection product rule

Creating a selection product rule error condition

Creating an alert product rule action

Testing the validation product rule in the QLE

Creating a filter product rule

Creating twin fields 

Summary

Chapter 4: Configuring CPQ Pricing

CPQ pricing

Learning about pricing methods

Setting a list price

Creating the cost price

Creating the block price

Adding a block price product to a quote

Creating a percentage of the total price

Creating Multi-Dimensional Quoting (MDQ)

Understanding the pricing structure

Discounting in CPQ

Discount schedules

Associating the discount schedule with a product

Creating price rules

Enabling the advanced calculator

Creating a sample price rule

Creating a price condition

Creating a price action

Testing a price rule in the QLE

Creating a price rule using a lookup object

Creating a lookup query for the price rule

Creating a price action for the lookup query price rule

Summary

Chapter 5: Generating and Configuring Quote Templates

Generating PDF quotes using quote templates

Generating a quote document

Creating quote templates and template content

Attaching additional documents

Creating template content and linking quote templates

The types of content

Creating HTML content

Linking the HTML content to a quote template

Creating line item content

Linking the line item content to a quote template

Creating quote terms content

Linking quote terms to a template

Integrating DocuSign for eSignatures

Summary

Section 2: The Next Stage of the CPQ Journey

Chapter 6: Configuring Guided Selling

Guided selling and its advantages

Configuring guided selling in Salesforce CPQ

Creating picklist values on the Process Input object

Linking the API values to the Process Input object fields

Creating dynamic process input

Testing guided selling in QLE

Summary

Chapter 7: Creating Contracts, Amendments, and Renewals

Contracts overview

Creating a contract from an opportunity

Creating a contract from an order

Service Cloud for Salesforce CPQ

Creating amendments

When do customers need amendments?

Cancel and replace

Amendment fields on a contract

Creating a sample amendment

Amending MDQ products

Creating renewals

Contract-based renewal process

Asset-based renewal process

Renewal pricing

Renewal fields on a contract

Creating a sample renewal

Early renewals

Contracted pricing

Summary

Chapter 8: Configuring CPQ Package Settings

Configuring the CPQ package

The Documents tab

The Groups tab

The Line Editor tab

The Plugins tab

The Pricing and Calculation tab

The Subscriptions and Renewals tab

Prorate multiplier

The Quote tab

The Order tab

Additional settings

Summary

Section 3: Advancing with Salesforce CPQ

Chapter 9: The CPQ Data Model and Migration Concepts

Understanding the CPQ implementation strategy

Deploying CPQ changes

Understanding the CPQ data model

Exporting a Salesforce object model

Exporting Salesforce objects to Lucidchart

Legacy data migration

Data migration tools

The data migration sequence

CPQ localizations

Summary

Chapter 10: Salesforce Billing

Salesforce Billing overview

Configuring products for Salesforce Billing

Advantages of Salesforce Billing

Installing Salesforce Billing

Creating invoices

Creating a sample invoice

Configuring an Invoice Scheduler

Creating payments

Understanding the revenue recognition process

Creating GL accounts

Summary

Chapter 11: Understanding Industries CPQ

Industries CPQ overview

Comparing Salesforce CPQ and Industries CPQ

Key features of Industries CPQ

Industries CPQ test environment

Enterprise Product Catalog

Creating products

Industries CPQ's UI

Industries CPQ's cart

Industries OM

Industries CPQ OmniScripts

Digital commerce

Summary

Chapter 12: CPQ Implementation Best Practices

The best practices for improving CPQ performance

The best practices for CPQ implementation

Summary

Further reading

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Preface

Now more than ever before, customers have become the focal point of businesses around the world. Not to be left out, companies both big and small want to invest in digital transformations that can drive growth and improve operational efficiencies. These in turn help businesses accelerate their sales and see revenue growth. The sales teams need technology that can help them with responsive and flexible customer needs and automate the quote-to-cash process. Salesforce CPQ helps reshape the business relationship between sales organizations and customers.

Salesforce CPQ is a configure, price, quote tool that helps businesses automate the quote-to-cash process in a unified platform. Using the CPQ application allows sales organizations to focus on selling, while the tool can help with complex product configurations, accurate pricing, and helping sales reps generate precise quotes in minutes. CPQ is a native app built on Salesforce, the world's number-one cloud-based Customer Relationship Management (CRM) software for managing customer relationships and integration with other systems.

This book will start with an outline of the quote-to-cash process, present an overview of CPQ, and provide the details of when a business needs to implement CPQ. We will explore how CPQ helps configure complex products and bundles and helps apply accurate pricing and discounts. Then, we will learn how to automate the approval process and generate a professional quote and send it to customers.

After the initial sales have been closed, you will learn how a contract can be generated. The customer relationship gets stronger as the sales process progresses further and amendments can help make any changes to existing contracts. You will understand the renewal process that will generate revenue for your business for both subscription-based and non-subscription-based products and services. You will also learn how package configurations help in controlling the configurations and automation at the Salesforce org level.

Then, you will explore Industries CPQ and the types of businesses that need to implement this. This book provides insights into how Salesforce Billing replaces the multiple systems typically used by finance to create orders, send invoices, and collect payments. By the end of the book, you'll have gained CPQ knowledge that can be utilized to configure and customize various kinds of use cases for CPQ implementation in any type of industry.

Who this book is for

This book is intended for Salesforce professionals who have standard Salesforce platform knowledge and readers who are interested in learning about CPQ. This book helps administrators, business analysts, functional consultants, sales managers, and Salesforce architects understand CPQ configurations and customizations. This book also provides the foundational knowledge needed for any CPQ implementation project. Most of the CPQ concepts are explained using simple use cases.

This can become your go-to reference material that can be applied to any implementation as needed. Reading these chapters will also help those aspiring to gain Salesforce CPQ certifications. Working knowledge of the Salesforce ecosystem is recommended to get the most out of the book. It is recommended to create a Salesforce CPQ test instance and follow along with the examples provided in this book.

What this book covers

Chapter 1, Getting Started with Salesforce CPQ Implementation, provides a high-level overview of the quote-to-cash process for any business. This chapter describes the basic concepts of what CPQ is in Salesforce. Each Salesforce object concept (opportunities, quotes, products, price books, and quote templates) will be explained clearly and the high-level CPQ data model will be discussed. The details of how to configure these in Salesforce will also be covered. The decision as to when a Salesforce CPQ is needed will be explained. The different types of CPQs present in the market today will be briefly touched upon. The advantages of using Salesforce CPQ from a business perspective will be discussed. You can practice all these concepts using a free Salesforce developer org. Instructions for creating a free developer organization and CPQ installation will be provided.

Chapter 2, Configuring Opportunities and Quotes, walks you through, having understood what Salesforce CRM is and what you gain by implementing Salesforce CPQ in your organization, what Salesforce opportunities, quotes, and orders are. Using an example, you will understand the relationship between opportunities/quotes and products. Then, you will be guided with an overview to configure the opportunity and quote objects in Salesforce. You will explore the Quote Line Editor (QLE) in detail and understand several out-of-the-box features of QLE, including QLE customizations for different use cases. This chapter also provides the knowledge to implement advanced approvals and their advantages. Configuring advanced approvals for CPQ quotes will be explained in detail.

Chapter 3, Configuring CPQ Products, having understood creating and configuring Salesforce CPQ opportunities, creating quotes, and creating orders, will take you to the next step, which is understanding how to configure products. Product configuration is the bedrock upon which many CPQ configurations and automations can be built. Whatever the type of the business, either B2B or B2C, defining a product structure is very important. This chapter will help you understand what product options, features, and bundles are. You will also understand the power of CPQ product rules to automate business processes. All of these can be achieved with configurations and no Apex coding is required. As a power user, you are now ready to create custom CPQ actions and use custom filters for automating different business requirements. This chapter also provides the concept of the twin field feature in CPQ.

Chapter 4, Configuring CPQ Pricing, helps you to automate pricing and discounting. You will understand the CPQ pricing methods and the configuration. By the end of this chapter, you will understand how to define pricing, price structure, how multi-currency use cases can be handled, configuring price rules, discounts, and multi-dimensional quoting, and will be able to set up all these configurations in Salesforce using different use cases. Each concept will be explained by providing the Salesforce navigation path so that you can practice these in the test environment.

Chapter 5, Generating and Configuring Quote Templates, walks you through how Salesforce CPQ generates PDF quotes to send to customers. You will understand how dynamic templates can be used for quote generation. You will also learn the advantages of using quote templates. For sending quotes to the customer, you will learn how DocuSign, or any other third-party integration tool, can be used for the automation of quote signing by customers.

Chapter 6, Configuring Guided Selling, helps you understand how to use guided selling and its advantages. You will explore a guided selling use case and configuration details.

Chapter 7, Creating Contracts, Amendments, and Renewals, helps you understand why we need amendments and how to create amendments, amendment opportunities, and amendment quotes. You will also understand what Salesforce assets are. You will learn how to configure CPQ renewal opportunities and quotes automatically and be able to customize them for business-specific needs. You will also understand how evergreen contracts and autorenewals work.

Chapter 8, Configuring CPQ Package Settings, helps you understand what CPQ package configurations are and how some of these settings control the other configurations. This chapter also provides details on the prorate multiplier and how CPQ provides different options to configure the prorated pricing for subscription products.

Chapter 9, TheCPQ Data Model and Migration Concepts, helps you understand how Salesforce CPQ objects are related to each other and how you can perform a data migration from a legacy system into Salesforce, as well as the order in which the objects need to be migrated. You will understand the CPQ Data Model and use Salesforce Schema Builder to view and configure object relationships. You will also be advised on CPQ deployment from one Salesforce org to another.

Chapter 10, Salesforce Billing, provides an overview of Billing, installation details, and the advantages. You will understand how Billing enhances CPQ capabilities with invoice generation, payment, and revenue recognition functionalities. You will learn how Billing implementation provides the ability to create quotes, orders, and invoices all on a single platform.

Chapter 11, Understanding Industries CPQ, provides an overview of Industry Cloud and where Industry CPQ falls within Industry Cloud. This chapter outlines high-level differences between standard Salesforce CPQ and Industries CPQ. You will learn the key features of Industries CPQ. You can create an Industry CPQ training org to further explore the features.

Chapter 12, CPQ Implementation Best Practices, provides you with some of the best practices recommended by Salesforce for getting optimal CPQ performance. Also, you will learn some of the standard implementation guidelines. Any tool that you use should be used efficiently. Salesforce CPQ is no exception; with proper implementation, you will reap the benefits. Otherwise, you will hit performance bottlenecks.

To get the most out of this book

You will get the most out of this book by practicing the examples and CPQ configurations in a Salesforce test instance or training instance.

Salesforce provides a pre-installed CPQ developer org for 90 days. You can get a free training org here: https://developer.salesforce.com/promotions/orgs/cpqtrails.

Alternatively, you can install the CPQ package in any Salesforce developer org. To create a developer org, sign up here: https://developer.salesforce.com/signup. Follow the instructions provided in Chapter 1, Getting Started with Salesforce CPQ Implementation, for installing CPQ.

For advanced approvals, install the package from this link: https://install.steelbrick.com. Follow the instructions provided in Chapter 2, Configuring Opportunities and Quotes, for installing CPQ.

You can create a test environment for configuring sample use cases and examples using Industries CPQ; refer to the Industry Cloud documentation on Vlocity University: https://help.salesforce.com/s/articleView?id=000357469&type=1. You can request a training environment by filling in the form at https://vlocitytrial-prod.herokuapp.com/?templateid=SFI_IPQ. This is a free instance that is available for a limited amount of time.

Download the color images

We also provide a PDF file that has color images of the screenshots and diagrams used in this book. You can download it here: https://static.packt-cdn.com/downloads/9781801077422_ColorImages.pdf.

Conventions used

There are a number of text conventions used throughout this book.

Code in text: Indicates code words in text, database table names, folder names, filenames, file extensions, pathnames, dummy URLs, user input, and Twitter handles. Here is an example: "Similarly, add the other product picklist API names (in this example, Hardware type and Laptop type) that you created in the product object."

A block of code is set as follows:

<apex:page standardController="SBQQ__Quote__c"

extensions="QuoteExtController" action="{!onRecall}">

<apex:pageMessages />

Bold: Indicates a new term, an important word, or words that you see onscreen. For instance, words in menus or dialog boxes appear in bold. Here is an example: "To configure contracted pricing, navigate to App Launcher → Account → Related → Contracted Prices → New."

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Section 1: Getting Started with Salesforce CPQ Implementation

This section focuses on providing Salesforce CPQ foundational knowledge. You will understand the quote-to-cash process and get an overview of CPQ Using simple examples, you will learn how to create CPQ quotes from opportunities and understand the relationship between opportunities, quotes, and products. You will focus on how products can be configured and customized, how complex pricing can be automated with applicable discounts, and how to create quotes accurately. You will understand how product rules, price rules, and quote templates can be customized for any business easily.

This section comprises the following chapters:

Chapter 1, Getting Started with Salesforce CPQ ImplementationChapter 2, Configuring Opportunities and QuotesChapter 3, Configuring CPQ ProductsChapter 4, Configuring CPQ PricingChapter 5, Generating and Configuring Quote Templates

Chapter 1: Getting Started with Salesforce CPQ Implementation

In this chapter, we will learn what Salesforce CPQ is, as well as begin to identify situations and business needs that can be aided by Salesforce CPQ. Typically, sales personnel spend a lot of time creating quotes, calculating prices, seeking approvals, and working through multiple legacy systems. These legacy tools may not be up to date and so are inaccurate, leading to delays in closing deals as well as impacting customer satisfaction. Salesforce CPQ helps to automate and streamline sales processes and create quotes quickly and efficiently, resulting in increased business revenue, the ability to forecast efficiently, and increased customer satisfaction.

In this chapter, we will cover the following topics:

The relationship between the sales process and cloud computing Understanding the quote-to-cash processIntroducing Salesforce CPQSalesforce CPQ advantagesSalesforce CPQ versus Industries CPQInstalling Salesforce CPQ

By the end of this chapter, you will be able to install Salesforce CPQ either in a Salesforce test environment or in a production environment. You will also understand when your business needs Salesforce CPQ. With the examples provided in the upcoming chapters in this book, you will learn how to configure, test, and automate Salesforce CPQ.

The relationship between the sales process and cloud computing

In the past, the sales process was done manually. Sales representatives used printed catalogs and assembled quotes by hand. These quotes would then be physically delivered to customers. Changes to a quote or fixing errors in either the product or pricing meant the quote process had to be started again.

Before cloud computing, closing deals included business cards and manual processing. Over the decades, though, the sales process changed along with the advent of technology, and businesses started using automation as a result.

A business that hosts everything in-house is called an on-premises model. The on-premises model of using software also has its own challenges in the form of a lack of flexibility and agility for the sales rep. When data is disconnected, sales reps struggle to keep up with demand. Without the sales process being automated, businesses would face longer sales cycles, resulting in revenue loss.

The limitations that businesses face with an on-premises model were tackled by the introduction of cloud computing. Cloud computing has taken the world of software by storm and the sales process has not been left out, consequently getting a boost in the form of automation with speed, enhanced security, ease of use, centralized reporting, and an efficient sales process.

Salesforce is one of the leading Customer Relationship Management (CRM) vendors, having realized the limitations of the traditional on-premises model, leading the transformation of the sales process through their cloud computing software.

With the evolution of cloud computing, the Salesforce sales process has also benefitted. We'll explore the quote-to-cash process in detail in the next section.

Understanding the quote-to-cash process

The sales process is key for any business to be successful. Although this seems pretty simple, right from leads entering the system, generating opportunities, quotes, shipping the products or services, and invoicing the customer, this process can become complex as your business grows. The quote-to-cash process refers to the sales process right from opportunity creation to the invoice being paid by the customer.

In any business, once the marketing team completes the lead generation process, the potential leads will be handed over to the sales team. This marks the entry point of the quote-to-cash process for the sales team. The first step in the quote-to-cash process is creating an opportunity to deliver a quote to a customer. Here is a look at the high-level quote to cash process (this is a generic sales process and this can be tweaked as per the customers' business needs):

Figure 1.1 – Quote-to-cash process

The following are the major steps from Figure 1.1 for the quote-to-cash process:

Opportunities are pending sales. You can create an opportunity in your system when the customer is interested in your business's products and services. In Salesforce, an opportunity can be created for an existing account or by converting a qualifying lead.Using CPQ software, you can start configuring the products and services, create product bundles, and automate product selection.The price is calculated automatically, and relevant discounts can be applied.You can then present the quote to the customer. Multiple quotes can be generated to adjust products and prices as per the needs of the customer and the terms and conditions.Once a quote is finalized and necessary approvals are completed, an order can be generated. Based on your business model and the type of product you are selling, subscriptions and contracts can be created. For example, if there is a one-time purchase such as hardware for the products and services you are selling, there won't be a need for a subscription. If you have a warranty associated with a product, then you need to create a subscription associated with the product. Once the customer agrees to place an order, it can be generated, and goods and services are shipped to the customer.

Shipping and invoicing is not a pure CPQ process. Salesforce Billing can be used as an add-on to CPQ and helps customers to have an end-to-end solution on a single platform.

Finally, an invoice will be created, and the customer is ready to make a payment. Once the customer pays, billing and payments can be processed for the order.

In the upcoming chapters, you will learn in detail how to configure and implement Salesforce CPQ to automate this process. You will also see how renewals can be combined with cross-selling and upselling to increase revenue and continue selling to new and existing customers.

From the preceding brief description, you will realize the important role that the quote-to-cash process plays, from quote creation to payments for your products and services.

When the quote-to-cash process is part of an integrated system, it will result in the following:

Revenue growth for the businessSpeed and accuracy in the sales cycle using automation Increased customer satisfactionImproved overall productivity and accuracyProfitability for the business

Important Note

All technical references in this book will be with respect to Salesforce only. You will be advised otherwise if a non-Salesforce-related topic is being discussed.

Now that you understand the elements of Salesforce CPQ and the quote-to-cash process, we will dive deeper into each of the components of CPQ.

Introducing Salesforce CPQ

CPQ is cloud-based Salesforce software standing for Configure, Price, Quote. This tool can be used to create a structured and scalable sales process for your company and can provide your customers with accurate pricing for your business's products and services.

Salesforce CPQ was originally called SteelBrick, which was a managed package. CPQ uses most of the standard Salesforce objects, including opportunities, products, and price books. Here are some of the key concepts of the Salesforce business process that will help us have a better understanding of CPQ:

Opportunities are potential revenue-generating deals for your business. Opportunities go through different stages before the deal is either Closed Won or Closed Lost.Accounts are companies that you are doing business with, and Contacts are the people who work for them, while Leads are potential customers that may be people or companies. In B2B business scenarios, leads convert into a business account, contact, or opportunity. For B2C business scenarios, leads convert into a personal account and opportunity.Products and services are the items that your company sells. Each of these products can exist in single or multiple price books based on your business model. A price book contains the prices related to these products and services. We will explore these concepts further in Chapter 3, Configuring CPQ Products, and Chapter 4, Configuring CPQ Pricing.

When a CPQ package is installed, custom objects, including subscriptions and quote lines, are added, which extends the native functionality of Salesforce Sales Cloud.

In this section, we are going to dive into CPQ as a concept. This will help us to understand how accurately you can configure products and combine the right products into a single bundle or separately. You can also apply discounts and complex pricing to your products to generate a quote for your customer.

Let's start by exploring C for Configure.

Configure

You need to first Configure the product your company is going to sell to its customers. Typically, CPQ is used when the product configuration is more complex than what standard Salesforce can support. When there is a need for product bundling, validations, automatic pricing, and discount calculations, standard Salesforce requires heavy customizations that are hard to maintain. In addition, a simple error in adding a product can delay the sales process. If an error occurs, the rep will need to start the quote all over again and add the right products.

Using Salesforce CPQ, product configuration becomes simple and easy. This configuration can be achieved by answering a few questions related to what the customer wants to buy, including the type of product, quantity, and configuration. When these questions are answered, the related products will be displayed. Using out-of-the-box CPQ configurations products can be bundled together with related products or services, and reps can add the configuration with a few clicks. Bundles can also be configured based on a customer's specific needs.

For example, if your company is selling laptops, the rep does not need to remember the configuration of the laptop and the prerequisites.

Product managers can bundle the following:

The hardware (laptop), power cables, mouse, and keyboard can all be bundled togetherThe warranty, which will be a subscription product based on the customer selection

The rep can then add the configured bundles in one click. When the company has customers across different regions, based on the locations you are selling in, bundles can be adjusted accordingly.

For example, a laptop bundle sold in the US will include a US power cord and a US keyboard. The same bundle, when sold in EMEA, will contain a UK power cord and a UK keyboard.

Product configuration can also provide soft alerts or hard errors. When the rep is configuring and they forget to add an optional component, the system generates a soft alert: Do you need to add a mouse pad? The CPQ can force hard errors on the product configuration when the rep forgets to add a mandatory product such as the power cord.

Automations such as bundling accessories according to the geography and providing alerts if a mandatory component is missed while configuring the products can be configured in a timely manner with Salesforce CPQ. Using CPQ, sales reps will always generate error-free quotes and make the sales process a better customer experience.

In Figure 1.2, a sales rep can use previously created bundles with all the relevant products to create a quote. With one click, the bundle can be added to the quote, and all the products in the bundle will be added automatically.

Figure 1.2 – Product Selection

In the Product Selection page, both standalone products and bundles can be selected as required.

Price

Reps do not have to burden themselves with memorizing the Price of products or referring to a third-party tool or a pricing catalog. They also do not need to waste time on spreadsheets and calculators for complex discount calculations. In addition, they do not need to refer to any additional details to provide extra discounts.

All the pricing logic and discounts can be configured in CPQ, which does all the complex math for you. As a result, reps can stop worrying about the calculations and concentrate on each customer's needs.

If the rep wants to apply discounts or make changes to any of the quantities, the quote can be updated in a matter of a few seconds with the click of a button. With prices changing dynamically for any business, CPQ can automatically pull the active price from the Salesforce price book.

A price book is similar to a catalog with the list of products and services that your company is selling, and the corresponding price associated with them. Salesforce provides two types of price books:

Standard price book: This contains a list of all the products and services that your company is selling and their default standard prices. A Salesforce admin needs to create a price book entry whenever a new product is created. Also, if the product needs to be sold in multiple countries with different currencies, a price book entry is required for each currency. Custom price book: This contains all of, or a subset of, the products from the standard price book with custom prices called list prices. Custom price books are created to offer products at different prices based on region, market segment, or specific customers. For example, we can have one price book for all the products sold in the Americas and another for selling the same products in Asia or Europe.

CPQ allows different pricing methods based upon the type of product. Using the number of units purchased and the discounts applied by the rep, the quote's total price is automatically calculated by the CPQ engine.

Quote

When a sales rep is negotiating an opportunity, there can be multiple quotes. However, there can be only one quote that is marked as primary. A primary quote is a quote that will most likely be accepted by the customer, and this gets converted to an order. At any time, all the quote lines from the primary quote are synced to the opportunity.

It is now time to generate a Quote for the previously created product(s). Out of the box, Salesforce CPQ supports generating doc and PDF versions of a quote using a pre-built template. This quote template can also have the company logo embedded to create a professional quote. Dynamic quote templates can be used to change the quote's terms and conditions. We can also dynamically add sections to a quote. This can be integrated with e-signature software (for example, DocuSign) to send the quote to the customer in a matter of minutes and close deals faster.

Shorter sales cycles and more accurate data result in greater customer satisfaction day by day.

What does a quote template contain?

A quote template is a PDF document that contains the products and services that you are selling. It contains the prices associated with these products, including the discounts and the totals. It also includes the terms and conditions specific to your business.

To generate a PDF quote, navigate to a Salesforce org, App Launcher  Opportunity  Quote  Generate Document.

The quote template can be emailed directly to the customer. A sample CPQ PDF quote has been generated next using out-of-the-box Salesforce CPQ functionality:

Figure 1.3 – CPQ PDF quote

You can preview the quote template before emailing it to the customer and change the terms and conditions as needed. You can also customize quote templates.

CPQ high-level object flow

While there are many aspects of Salesforce CPQ, the main objects are products, pricebooks, accounts, opportunities, opportunity products, quotes, quote lines, orders, and contracts. The following diagram shows a high-level CPQ object model:

Figure 1.4 – High-level CPQ object model

Opportunity is created from an account. Once the products are added to the quote and the quote is made primary, quote line products sync to opportunity products. An order can be created from an opportunity or quote. Based on the products added to the quote, contracts and subscriptions can be created either from an opportunity or an order. We will learn about object relationships and the data flow in Chapter 9, TheCPQ Data Model and Migration Concepts.

Salesforce CPQ Return on Investment Calculator

The decision to implement Salesforce CPQ for your business can be methodically calculated by using the Return on Investment (ROI) calculator, provided by Salesforce. This tool asks you to answer a set of questions that will help you make an informed decision. The questionnaire includes basic questions about your business, such as the number of invoices raised, the number of quotes generated, the number of sales reps, the hourly rates of sales reps, the gross profit margin of your products, and the annual revenue of your business.

The results of the ROI calculator will provide insights into your business regarding increased sales productivity, a reduction in invoicing costs, an increased win rate, and improvements in cash flow, to name a few. These indicators will help you make informed decisions for your business to be successful.

Here is the link for the Salesforce CPQ ROI: https://www.cpqbillingcalculator.com.

Now that you have an understanding of Salesforce CPQ, let's explore the advantages of implementing CPQ.

Salesforce CPQ advantages

Out-of-the-box Salesforce may not always support all your business needs. Sales reps sometimes struggle to sell complex products with their associated pricing. They resort to the manual generation of quotes to be sent to the customer. Generating quotes that are accurate is one of the biggest challenges that companies face. When the sales process is dependent on accurate data that the rep does not have access to or the quote does not reflect the products and services being sold to the customer, the following may occur:

A disconnected sales process: When the data used by the sales rep during the sales process is disconnected, it is hard for the sales rep to refer to isolated product catalogs and price catalogs. This sales process will have data discrepancies when the information is stored locally if the source changes, (Microsoft Excel or Microsoft Word is referred to as the local copy). Referring to product codes or product names that have changed may result in the pricing not being accurate during the sales process.Revenue impact and quote correction: Generating quotes with information that does not reflect accurate pricing of products impacts revenue for the business. Furthermore, retracting such quotes could result in a longer deal closure and a loss of revenue as well.Approval and bad customer experience: Sales reps need to chase approvers manually for updated quotes, resulting in potential delays for the customer to receive these quotes. The sales organization may also see a bad customer experience when quotes are retracted, or when quote information needs to be corrected.Sales forecast and lack of visibility: The sales org will struggle to forecast the buying habits of the customer accurately and to keep optimal product inventory, resulting in revenue loss for the business.A solution that is not scalable: When customized solutions are implemented, the sales process is not scalable. Data will reside in silos and will depend on individuals for access and the retrieval of information.

To address the aforementioned shortcomings and to give more flexibility to the sales organization, Salesforce CPQ is the way forward.

Some of the obvious advantages of using Salesforce CPQ include, but are not limited to, the following:

A predefined process: The disconnected sales process discussed in the previous section can be addressed using Salesforce CPQ. Salesforce CPQ helps you close complex deals quickly. Sales reps can use CPQ to apply discounts, automate product configurations, and create quotes. Salesforce CPQ serves as an internal e-commerce platform. Sales reps can add, modify, and delete items from the cart. The Salesforce CPQ configuration can help sales reps tailor product configuration. It will also act as a guard rail in providing the right products to the right customers. Quote change and approval: When the customer requests a change, the sales rep can generate quotes with the company branding and update and/or modify the quotes. Negotiations with the customer become easy for the sales rep, as multiple quotes can be created within a short time. With automation in place using Salesforce CPQ, approvals happen when the criteria are met. Changes to existing contracts that are to be shared with customers can be made easily with add-ons or amendments. Sales reps can generate quotes in Microsoft Word or PDF and can also share them with customers.Pricing: Pricing is part of the integrated system and sales reps do not need to refer to a third-party system. They can automatically apply discounts based on volume or customer tiers (for example, premium customers). Sales reps will be provided with proactive suggestions by the CPQ engine, which looks at the buying patterns of customers. These can be added to the cart and quotes will be updated accordingly.Customer visibility and customer satisfaction: The sales organization gets a 360-degree view of the customer and works on improvements if gaps are identified. By integrating third-party tools such as DocuSign, deals can be closed faster for better customer satisfaction. Salesforce CPQ is often referred to as the heart of the sales process, ensuring that business rules and technical rules are enforced in every transaction that goes through the system.

In the next section, we will look at Industries CPQ and when it can be used.

Salesforce CPQ versus Industries CPQ

Apart from Salesforce CPQ, the other CPQ used for specific business needs is Industries CPQ. Industries CPQ, formerly known as Vlocity, was acquired by Salesforce in 2020, and it is built on the force.com platform. The solutions that Industries CPQ provides are for specific industries that include telecoms, health, insurance, media, and entertainment. Industries CPQ requires a typically extensive programming effort and is not a direct competitor to CPQ. They serve different needs entirely, even though the end result is generating a quote. Industries CPQ helps companies with complex business models overcome the challenges that are unique to their industries.

Industries CPQ with Salesforce Service Cloud helps companies deliver a personalized solution. For example, in the insurance industry, combining Salesforce Service Cloud's omnichannel capabilities with Industries CPQ helps deliver a personalized and seamless retail experience. For the media and entertainment industry, Industries CPQ can provide a complete industry solution across subscriber and advertising sales life cycles for both B2B and B2C customers. Pre-built modules can be downloaded, deployed, and integrated, with Salesforce removing the burden on the business to come up with new solutions.

In Chapter 11, Understanding Industries CPQ, we'll cover more use cases and Industries CPQ tools and features.

Installing Salesforce CPQ

Having covered the need to implement Salesforce CPQ, as well as the advantages it offers, it is now time to install it.

Before the full implementation is deployed in the production environment, all the required configurations can be done in a test environment. The advantage of using a test environment is that deploying these configurations into production following thorough testing and approval by the business will leave little room for error. All use cases in this book will be demonstrated in a developer org using Salesforce Lightning. Let's get started.

Tip

You can skip the installation if you just need to practice CPQ configurations. Salesforce provides a pre-installed CPQ developer org for 90 days. You can get a free training org here: https://developer.salesforce.com/promotions/orgs/cpqtrails.

Before installing Salesforce CPQ, you will need to create a developer org. The developer org comes with sample data for all the Salesforce standard objects. To create a developer org, sign up here: https://developer.salesforce.com/signup. You can then verify your account via email and set up a password.

Important Note

Salesforce CPQ is a managed package and it needs to be separately installed on any Salesforce org.

Once you have created a developer org, you are ready to install Salesforce CPQ. The following steps can be followed to install CPQ in any Salesforce org:

Log in to the Salesforce org where the CPQ package needs to be installed. If email deliverability is not enabled, you will not receive any email notifications. These could include notifications for the package installation status, for example, completed or failed. Before installing, make sure the email deliverability