Understanding Endeavor’s New CPQ ROI Calculation

Try the CPQ ROI Calculator to estimate the value Configure Price Quote software can bring to your business.

Try the CPQ ROI Calculator to estimate the value Configure Price Quote software can bring to your business.

 

We have created a CPQ ROI Calculator that will help you assess the value of CPQ for your company. We’ve used comprehensive and reliable statistics from industry-leading analysts to create our calculator’s algorithm.

 

Since we want this calculation to be as accurate for your company as we can possibly make it, we need answers to six questions. In order to help you answer the questions easily and accurately—and so you understand why we need answers to these specific questions—we’ve written an explanation and introduction to our ROI Calculator.

Once you answer these questions in the ROI Calculator, our free CPQ Value Assessment and Guide instantly downloads, which gives you more information about what your calculation means. We know the information you provide is important to your company, and we value privacy here at EndeavorCPQ. Rest assured, we will only use this information to create your calculation and CPQ Guide.

  • What is your company's annual sales revenue?

                  The statistics we have used to create an accurate CPQ ROI Calculator are based on percentages of companies that are CPQ and non-CPQ abled. In order to provide a calculation of how much your company can save using CPQ software, we need to know a general estimate of your annual sales revenue.

  • What percent does your company make on sales (return on sales)?

Return on sales (ROS), also known as “bottom line profit margin,” is a helpful measurement that provides insight into how much of your company profit is being produced per dollar of sales. Companies can use ROS to determine and improve their operational efficiency, and it’s important to this calculation because CPQ has been shown again and again to make sales more efficient and profitable.

To determine your ROS ratio, divide your net income by your company’s revenue, times 100.

  • What percent of market penetration is your sales team achieving?

This can be a tricky question to answer, but it’s also really important for companies to understand. Market penetration is the measurement of the amount of sales reach your team has achieved for your product or service compared to the total theoretical market for that particular product or service. For example, if there are 30 million streaming video possible users, and your sales team for your streaming service has reached 1.5 million possible users, then your market penetration is 5%.

  • On a scale of 1 to 10, with 10 being world class, how would you evaluate the effectiveness of your sales team?

There won’t be an exact objective answer to this question, but many industry-leading companies have very clear KPIs for sales effectiveness. Many companies use revenue generation, sales pipeline goals, historical trends, and percentage of deals won to determine sales team effectiveness. Tracking your sales team effectiveness can help you set goals to improve individual and team performance, and track sales progression. We recommend imagining 10 as your company’s goals for what you realistically hope your sales team could achieve if operating at 100% effectiveness and efficiency. Are they achieving 75% of that? Then rank them a 7 or an 8. Are they achieving 50% of that? Then rank them a 5.

  • On a scale of 1 to 10, with 10 being world class, how would you evaluate the strength of your pricing and margin management processes?

Price and margin management is crucial to your company’s bottom line. If a company fails to price their products accurately and manage their margins effectively, they will lose money. Poor pricing and margin management leads to:

  • Price leakage
  • Poor judgement on low margin business
  • Fixed cost errors
  • Inaccurate cost-plus pricing
  • Non-segmented product offerings

So, how strong is your company’s pricing and margin management processes? CPQ provides exceptional tools to help you with pricing insights and pricing rules, so we need to understand your current processes to estimate your room for improvement.

  • How long does it usually take to push product changes into the market and all outstanding proposals?

Last, but not least, we need to understand your product change timeline and how long it takes to get those product changes into your outstanding proposals. Companies that can quickly respond to market demands have a dramatic competitive advantage, especially in highly competitive industries. Product change timeline will vary per industry, but CPQ can help you make product changes more efficiently and connect product changes instantly to existing proposals.

Since you have a better understanding of these questions—why they matter for your company and how we use them in our calculation—visit our CPQ ROI calculator and receive a free custom assessment and guide today. If you have any questions or would rather talk through an ROI calculation, please contact us today.

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