How to Prepare for a Lead to Cash Transformation
Written by Jack Holliday
As you embark on your journey towards Lead to Cash transformation, it’s critical to prepare for the challenges that lie ahead. Salesforce CPQ delves deep into the core operations of your business, requiring inputs from various departments including Marketing, Sales, Sales Op, Finance, and Legal.
At the heart of this transformation are many important decisions regarding Products and Pricing, understanding the overarching product and pricing strategy and rallying all stakeholders around it. These decisions serve as the foundational building blocks of your Lead to Cash program. It's imperative to recognise that top-level pricing decisions, when not effectively communicated to the sales team until the testing phase, can lead to resistance during the rollout or a reluctance to simplify pricing structures.
Realisation of the product and pricing strategy moving forward and bringing everyone on board is part of the critical path to success.
Overly complicated pricing structures is a common problem; how you sell is just as important as what you sell. Pricing needs to be understood by everyone, most importantly by your customers (especially in the low cost self-serve landscape /eCommerce architecture), or you risk losing their trust as well as having to deal with too many invoicing queries. Complexity will slow down your sales cycle, increase your customer acquisition costs and potentially lead to rework to correct errors and associated high operational costs
It is important to tackle this complexity early, asking questions such as: Are customers driving your pricing complexity? Are you too flexible and catering for too many permutations? and most importantly: can we adopt a standard approach to pricing utilising Salesforce CPQ out of the box pricing models? Converging on a more manageable set of pricing models, focusing on those that will have the best effect on sales cycles and long term revenue, will greatly benefit your customer relationships and internal operations while offering stronger scalability across multiple sales channels.
Salesforce Billing offers the ability to bring invoicing and payments onto the same platform as quoting and ordering, unifying the front and back office teams. This is particularly useful in the age of the Subscription economy where recurring billing has become the norm. We know Finance cares about efficiency in billing (delays in billing often means delay in collecting revenue), accuracy of information (mistakes can mean loss of customer trust or even revenue) and compliance & audit (much of the finance workstream is subject to regulations and audit). Generating invoices in Salesforce removes a dependency on integration and the associated risk of error during the transfer process between CRM and Finance platforms.
So, does Salesforce Billing replace my existing ERP solution?
Not entirely. Your existing ERP solution may handle some aspects of billing, invoicing, and revenue recognition. However, it will also manage all necessary accounting practices such as accounts receivable, accounts payable, and general ledger activities.
Salesforce Billing can take over some processes traditionally handled by ERP systems, such as billing, invoicing, and revenue recognition, whereas traditional accounting processes will remain in the ERP. It is important to consider the architectural integration considerations for Lead to Order vs Lead to Invoice vs Lead to Payment / Cash.
During the Mint Discovery phase, various implementation options for Lead to Cash are meticulously explored. This requires a comprehensive analysis of the pros and cons associated with each approach, ensuring informed decision-making and optimal outcomes.
The Lead to Cash preparation for Discovery checklist:
Define ROI metrics and key performance indicators (KPIs) for improvement.
Formulate a core project team consisting of a Project Sponsor, Product Owner, and Subject Matter Experts from various departments including Marketing, Sales, Sales Ops, Finance, Legal, and product/pricing experts.
Ensure that there is alignment on programme objectives and a clear path for critical business decisions related to product and pricing
Gather relevant supporting documentation such as process maps, product lists, pricing models, product selection rules, quote and contract samples, quote approval processes, invoice data, invoicing requirements, and revenue recognition guidelines.
Review the current pricing structures currently in use, and the frequency of use in each case
Engage a Salesforce specialist such as Mint Consulting to go through the recommended pricing models that the Salesforce platform supports and to help compare against current state
Consider eliminating current “edge case” pricing variants, and consider which pricing models will best achieve the business objectives in the future, and the implications of changing
Establish a collaborative governance model and change control process to maintain project alignment and progress.
Ultimately, navigating the Lead to Cash transformation journey requires careful planning with alignment of stakeholders and decision-makers in order to leverage Salesforce CPQ and Salesforce Billing to their full potential to achieve key business objectives such as enhancing top line growth and driving efficiency from streamlined operations.
Contact us to find out more about how we can help you with your lead to cash project.