If your products have millions of possible configurations, it’s hard for even seasoned salespeople to commit all those options and relationships to memory. CPQ software helps them see the big picture and make fast, accurate choices. Instant, high-quality professional quotes help your teams win more deals. They can be tailored to each customer’s needs while maintaining a consistent, standardized company message.
Quote Management
A CPQ system is designed to design quotes based on customer-specific product inquiries. It will configure the desired product portfolio within the scope of a section, define related pricing, and then send outputs for internal approval. One of the benefits of CPQ is that it helps ensure sales teams use accurate and up-to-date pricing, configurations, discounts, and promotions. CPQ solutions can also help to speed up the quoting process, typically reducing it from days or weeks to minutes or hours. This benefit is a win for sales operations, sales reps, and, most importantly, customers.
Services CPQ is all about simplifying the complexity of the sales process by automating the quoting and proposal generation for complex products or services. It will provide a streamlined workflow with minimal manual inputs and no errors. It will allow for delegated approvers so that one person can replace another if they’re out of the office or on annual leave, and it will provide easy-to-read and customized proposals with specific terms and conditions and accepted payment methods. Finally, it will make it easier for teams to follow up on quotes sent with automated reminders. It is an important step that often gets overlooked, but it can significantly impact your ability to deliver upsell and cross-sell opportunities. A best-in-class CPQ solution integrated with CRM will provide sales teams with little to no learning curve, and they’ll quickly see its benefits.
Configuration Management
CPQ solutions provide salespeople with tools to configure products, determine pricing, and generate quotes. These tools can be as simple as the Starbucks app that allows you to customize your order and calculate the price based on the number of add-ons you choose (configuration) and the pricing rules in place (pricing). Ideally, a Configure Price Quote solution will integrate with other software systems in your organization. It means you’ll have a centralized database where all of your product information lives and where you can use intelligent guided selling recommendations to improve up-selling and cross-selling. It also means that you can see the whole deal waterfall when quoting so that you know which profit reducers are occurring and can address them quickly.
A good CPQ solution can help you streamline your process and deliver high-quality, professional quotes to your customers in record time. It will increase revenue opportunities, improve customer satisfaction, and help you grow your business. Before implementing a Configure Price Quote solution, it’s important to understand your business needs. Start by identifying the challenges in your current sales processes and how a CPQ system will improve them. For example, consider your response times to sales inquiries, your churn rate, and the percentage of your deals that are closed successfully.
Pricing Management
If you have multiple product configurations, each with its own set of rules and pricing, CPQ software is for you. CPQ allows you to set up rules specific to a certain product portfolio easily and generates accurate quote outputs. It decreases the number of quotes that need to be amended after authorization and eliminates the chance of human error. Using a CPQ program, salespeople can be confident that their quotes are valid and that orders based on them will not be rejected. It is especially important when dealing with products with many possible permutations, like aircraft fleets or office buildings. It is not unusual for a configurable product to have millions or even billions of possible combinations of optional features and accessories.
A CPQ system can adjust pricing in real time as the customer makes choices. A simple example is an online computer purchase that allows the user to see their expected total cost change in real-time as they add or subtract different components. The best CPQ solution will support an integrated, efficient quoting process. It will feature approval workflows for complex or special pricing and can create a bill of materials and other documentation. It will also have a unified customer interface that non-technical customers can easily understand. The CPQ program should also help you gain insight into sales performance, including how well your team adopts price optimization recommendations.
Contract Management
If you’re selling highly configurable products, quickly and accurately delivering quotes is a big challenge. A robust, technology-enabled configure, price, quote (CPQ) process to facilitate customized orders solves this problem while saving salesperson time, reducing costly errors and improving customer experiences. CPQ can generate pricing and product information in both B2B and B2C sales. For example, Starbucks uses CPQ to allow customers to configure and customize their coffee order, determine the total price using an algorithm that adds the cost of their chosen add-ons to a base price (or formula), and then create a customer proposal with a full fee including the location and time it will be ready for pickup.
Depending on the size of your company and the complexity of the products you sell, your CPQ solution may also need to include contract management software. Including this capability within the CPQ solution makes it easier to implement and ensures that contracts comply with your business policies, sales best practices and financial targets. For instance, your CPQ solution can help prevent a sale if the resulting contract is unacceptable or would violate regulatory rules such as SOX (the Sarbanes-Oxley Act of 2002). The right CPQ solutions should provide easy and effective contract management capabilities. Choosing a cloud-based solution also saves your IT department from time-consuming installations and upgrades and allows your business to scale according to your growth.
