Revenue Lifecycle Management (RLM) is rapidly replacing CPQ for high-growth sales teams in many companies. Sales, like any other profession, has evolved. Proactive customer outreach, automated quotes and proposals, and a comprehensive view of the entire revenue lifecycle support modern sales processes and revenue growth. Here’s why many companies are switching from CPQ to RLM, and why you should consider doing so, too.
Traditional Configure, Price, Quote (CPQ) tools have long been a staple for managing sales quotations and configurations. However, the emergence of Revenue Lifecycle Management is rapidly redefining how sales manages the quotation process. RLM, particularly when integrated into the Salesforce ecosystem, offers flexibility, scalability, and alignment with modern sales processes and evolving business models.
Revenue Lifecycle Management software helps automate and streamline revenue recognition. Revenue recognition, billing, forecasting, and compliance can all be handled through a single platform. RLM in Salesforce combines both Sales and Finance in a single, unified system, with all the user-friendly features sales teams love with Salesforce products.
Although at first blush it might look similar to Salesforce Sales Cloud, RLM differs in several ways. The focus of Revenue Lifecycle Management is on the entire revenue lifecycle including quotes, lead generation, revenue recognition, and renewals. Automation within the platform makes complex billing and renewal processes easier, and its integration into Salesforce ensures seamless data transfer among the systems.
Traditional CPQ tools have been used by sales teams for many years, but they do suffer from several limitations. While they can be an efficient way to generate accurate price estimates and quotes, they are limited. For example, CPQ tools are typically designed as a fixed workflow. They don’t adapt easily to the specific requirements of a business, and they may not scale quickly enough for a high-growth company or sales team. These limitations may hinder a business’s sales team from proactively responding to customer sales needs, resulting in wasted time and lost opportunities.
If you’re comparing Salesforce RLM vs. CPQ, there are several things to note.
First, Salesforce RLM takes a comprehensive approach to revenue management. It follows revenue throughout its entire lifecycle, starting with lead generation and ending with revenue analysis. It includes deal closing, quotes and order creation, contracting, invoicing, billing, and more to provide a comprehensive picture of the revenue lifecycle.
CPQ focuses more on configures, prices, and quotes. Bundles can be created for complex products and services. It is intended to help sales teams quickly look up or create price quotations and proposals for customers. And a big drawback of CPQ is that if you want to extend its functionality beyond proposals and quotes to billing and invoicing, you’ll need to integrate it with other Salesforce solutions or third-party apps.
Clearly, RLM offers more benefits than CPQ. For modern sales teams, it can be a game-changer. For example, you can leverage Salesforce’s advanced analytics built into the platform to anticipate customer needs and market trends. Sales can then proactively contact customers, inviting them to reorder before a potential surge in market demand.
Another advantage of RLM over CPQ is its ability to support customer engagement. Features in the platform enable sales to identify and capitalize on renewal opportunities, upsells, and more, thus setting the stage for further growth.
As business models evolve and sales approaches change, having a flexible platform like RLM is a strategic advantage. It supports a flexible, scalable sales model and aligns with today’s approach to proactive customer engagement and customer experience. Companies seeking a holistic sales and revenue tracking approach will find it in RLM.
The Salesforce ecosystem offers many platforms to empower sales and improve efficiency throughout your business. Learn more about Salesforce Sales Cloud.
Salesforce is not completely getting rid of CPQ (Configure, Price, Quote). However, the company announced that CPQ will enter an “End of Sale” (EOS) phase, meaning they will stop selling the CPQ product to new customers. Existing customers will still be able to use CPQ with full support from Salesforce, including the ability to renew their subscriptions. Salesforce is shifting its focus to Revenue Cloud Advanced and Revenue Cloud Billing, which are built on Salesforce’s core platform and offer enhanced capabilities. So, while CPQ is not being entirely phased out, it is no longer a strategic priority for Salesfor.ce
Salesforce Revenue Cloud and CPQ (Configure, Price, Quote) are not the same, but they are related. CPQ is a component within Salesforce Revenue Cloud. Salesforce Revenue Cloud is a comprehensive solution designed to manage the entire revenue lifecycle, from quote to cash. It includes various features and tools to streamline revenue operations, such as CPQ, billing, invoicing, and revenue recognition. CPQ specifically focuses on automating the process of configuring products, pricing, and generating quotes for customers.
In essence, CPQ is a part of the broader capabilities offered by Salesforce Revenue Cloud, which aims to provide a unified view of revenue operations and enhance financial performance.
CPQ (Configure, Price, Quote) and RLM (Revenue Lifecycle Management) are both solutions within Salesforce’s suite of products, but they serve different purposes. CPQ primarily focuses on the sales process and generating quotes, while RLM includes a broader range of revenue-related activities, including billing and revenue recognition.
Salesforce Revenue Cloud offers several benefits. First, Revenue Cloud automates the CPQ cycle, including creating quotes for customers. It can help the sales team respond quickly to customer requests for quotations and ensure accurate quotes are created efficiently. And, the faster sales can generate quotes, the faster they can move from quotation to closing deals. Lastly, the automation in Salesforce Revenue Cloud reduces manual tasks, saving even more time for your sales team.
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