The right CPQ vendor helps sales teams grow revenues by simplifying the quote process. It minimizes human error and speeds up buying experiences, all while ensuring pricing rules are followed. CPQ addresses key sales management, operations, finance, and legal pain points. Consider what pain points your business is experiencing to determine if CPQ is right for you:
Pricing
The configure, price and quote (CPQ) process is vital for businesses selling highly configurable products. Using software to handle configurations and pricing saves time, reduces costly errors and improves the customer experience. A CPQ solution automates many manual processes that can be laborious and error-prone for sales representatives when delivering customer quotes. It also enables consistent company branding and terms and conditions, reducing the need to email or send multiple versions of each quotation. All the quotes generated by a CPQ system are stored in an internal electronic record, making it easier to re-use the same quote for similar deals or product configurations.
CPQ systems also enable your team to deliver upselling and cross-selling recommendations that maximize profitability, customer satisfaction or other business goals. It acts as a strategic compass, offering data-driven insights and unveiling upselling opportunities that would otherwise remain obscured. Depending on the nature of your business, the complexity of your products and the extent to which you negotiate prices globally, a CPQ solution could benefit your company. However, if you produce only a few products and arrange a few price variations, the extra effort to use a CPQ system may not be worth it. In this case, implementing a best-in-cloud CRM solution with robust lead-to-quote capabilities could be more effective.
Product Configuration
Regarding the CPQ meaning, it is a product configuration platform, a Configure-Price-Quote (CPQ) system, which is a critical piece of sales-focused technology. It allows businesses to generate accurate quotes and meet customers’ unique requirements. It also reduces the need for manual processes, minimizing errors and bottlenecks. CPQ software can help automate and streamline sales processes, allowing for more accurate and faster quotes. It can also reduce salespeople’s time sifting through catalogs and looking up pricing information. It can also improve the quality of sections and increase customer satisfaction. To make creating a quote as easy and efficient as possible, a good CPQ solution must have a configurator that can easily and accurately identify a customer’s requirements. The configurator will ask questions to determine what product type is needed. Then, it will configure the product based on those requirements. For example, a laptop may require a certain amount of RAM, storage and screen size.
In addition, a CPQ solution should have a sales-to-production process that is seamless and efficient. It should also be able to connect with core systems, such as CRM and ERP so that different departments have access to centralized specifications lists and pre-configured bundles. This connectivity between systems can eliminate misunderstandings and ensure that all departments work with the most up-to-date information.
Quotes
Typically, the quote stage involves more work than just telling a customer what it will cost. Salespeople will use the results from CPQ to fashion a proposal that will be presented to the client, laying out details such as delivery timescales, payment terms, and breakdowns of costs. It is where a CPQ solution adds value, as the automated process ensures that pricing and product specifications are accurate. It also allows quotes to be produced in a consistent style and format so that customers can compare one company’s offering with another’s without confusion. A bespoke template can often be set up to allow the salesperson to include their contact details and company branding on the quotation, presenting a professional image to customers.
Lastly, the ability to incorporate business rules in CPQ will ensure that a quoting process is efficient and error-free. For example, a rule could be set up only to permit a discount above a certain percentage of the total outturn figure – this will prevent highly commissioned Salespeople from compromising their profit margin by giving unauthorized discounts to win the business. It will help the overall profitability of the organization and reduce risk. Most modern CPQ systems can even create a full suite of job documentation, such as purchase orders, delivery notes, picking notes, production plans, risk assessments and work statements, all based on the key data from the original quote or proposal.
Contracts
CPQ automates sales quotes for all products and services configured, with all the pricing, terms and conditions. It is a huge time-saving benefit for sales representatives who were previously using worksheets to generate these documents. It also makes negotiating agreements between your company and customers more efficient, eliminating errors that can result from manually entering data into multiple systems. Typically, your CPQ system integrates with your CLM solution (Customer Lifecycle Management) to ensure that contract terms are properly reflected in the quote. It may include incoterms, pricing escalators, effective dates and other information that can significantly impact the final price of a product or service. CPQ can also automatically create other documentation for jobs, such as Production Orders, Risk Assessments and Work Statements, based on the key data in a proposal or quote, reducing manual processes and error rates. CPQ is the engine that drives the quotation process but relies on a strong Revenue Operations / Sales Operations team to implement and maintain it. With the proper support, a CPQ system will maximize your company’s sales effectiveness and profit margins.
