Introducing approvals in Salesforce CPQ
Why are approvals required in CPQ ?
During the sales cycle’s approvals are most commonly required so that sales do not go over the discount on any of the products. Approvals provide a mechanism to put in the required checks in the system.
Typically, company driven discounting policies do not require approvals. For example, if the same discount is given to all customers then no approval would have been required. However, on the other hand, if you allow your sales reps to override the default discounts, you might want to validate the discounts before the deal is closed.
The most common type of approval is related to pricing. Other approvals are related to change in terms of sales, addition to custom attachment, etc.
Often pricing approvals are driven by the discount level. It can also be based on pricing thresholds or margins or a combination. Price related approvals are often tiered: Eg: Your sales reps might be allowed to discount up to certain level say 10% without approvals, above 10% and up to 30%, their direct manager might have to approve, and beyond 30 %, the VP of Sale will need to approve.
It is important that you define how these prices will be considered for approval, either on a line item per line item basis (e.g. maximum discount given to any product in the quote) or at the quote level (e.g. blended discount across all line items). This information can then be leveraged by your system for streamlined approvals.
Other typical approval reasons may include:
Finance approvals: For change in payment terms or billing terms/billing milestones
Product-specific approvals: For when an approval is required to quote a specific product regardless of its discount.
Key benefits of using advanced approvals in Salesforce CPQ
- Smart Approvals If an approver or approval group has already approved a quote and it gets rejected at a higher tier, the same approver/group isn’t required to re-approve when the quote is resubmitted.
- Approval Chain Visibility Reps can have complete visibility into what approvals they’ll need to obtain as they work on the quote
- Delegate approvers Used for assigning an approver to take over for someone when they are Out of Office
- Replacing approvers If a certain approver is no longer required to approve quotes, they can be replaced easily.
Few best practices related to approvals
- Use approvals as a tool to mitigate deviations from organization policies.
- Reduce the number of approvers. Fewer approvers means a quicker sales cycle.
- Provide easy methods to approve like email approvals, mobile approvals, approvals from homepage dashboard etc.
- Email notifications to approvers should contain all relevant key information the approvers need to make their approval decisions. Also ensure that additional information is either attached or easily available so that they just have what they are approving. For example, if your Sales VP is responsible for approving payment terms, they might also need to consider the overall margin for the quote before accepting longer payment terms.
