Do your sales reps struggle with configuring the products and services that align with customer specifications? Is your company losing money due to pricing miscalculations or rogue discounts? Do the proposals sent to customers contain errors or look unprofessional? If so, configure, price, quote (QPC) can remove the barriers that are keeping you from expediting the sales cycle and maximizing profitability. Determining the right configuration and price for your offerings isn’t easy, nor is it a one-and-done initiative. This is where CPQ software can make a difference.
CPQ (Configure Price Quote) is designed to help sales reps accurately configure and price products and services. CPQ software takes into account changing variables and aggregates them, so organizations can optimize their margins. It simplifies the quotation, pricing and approval processes, reduces errors and accelerates deal closure and offers many other benefits.
CPQ Software: Description and Processes
A quick search reveals numerous CPQ definitions, however here’s one that encompasses many aspects of CPQ from Gartner. CPQ application suites provide an integrated set of software applications supporting the configuration, pricing and quote generation activities that accompany solution and negotiated selling. CPQ application suites are also deployed to support self-service sales environments, including business-to-consumer (B2C) and business-to-business (B2B) sales environments. Typically, CPQ systems include pricing engines, proposal generators, quoting systems, and rules or constraint engines, and are complemented by approval and authorization workflows.
Configure proposals that are accurate and actionable. Use a unified product catalog and a rule-based configuration engine. This will ensure that sales reps only propose valid combinations of products and services.
Price products and services with robust features. These include subscription and usage-based pricing, discount schedules, and flexible contract durations. Streamline the approval process with automated routing.
Quote deals quickly and automatically generate branded proposals, then close them faster with electronic acceptance of proposals.
While the above provides CPQ’s core functionality, here’s a more detailed look at each of the steps.
- Defining the products and services
- Configuring the products and services according to the customer’s specifications/requirements
- Pricing the configured products and services, and applying discounts, promotions, and bundles if applicable
- Developing the proposal
- Forwarding the proposal for internal reviews and approvals
- Sending the approved proposal to the customer for acceptance
CPQ software is often used to extend customer relationship management (CRM) and enterprise resource planning (ERP) systems. Its primary function is to automate a business’s configuration, pricing, quotation, and approval rules.
CPQ software was designed to decrease quoting errors and reduce (or eliminate) quote revisions and order changes. It also delivers several more features and benefits.
CPQ Software Increases productivity
Most CPQ software has a guided selling feature. This feature automates the process of analyzing a customer’s requirements. It does this by providing easy-to-answer questions about the customer’s needs. The system then uses the responses to create appropriate product/services choices.
Reduces administrative tasks
CPQ and CRM integration enables account information to be easily shared between the two systems. This eliminates the need for sales reps to manually enter the information. The products, services, prices, and status of the potential deal are automatically transferred to the CRM system. This ensures that both systems are in sync.
Shortens the sales cycle
Introducing automation to the sales cycle drastically reduces the amount of time salespeople spend on manual processes. CPQ not only shortens the sales cycle and increases proposal volume, but provides reps with the ability to close more deals.
Improves forecasting accuracy
Given the accuracy and visibility of quotes generated by CPQ software, you’ll greatly improve forecasting. The ability to track win rates, deal sizes, discount patterns, and trends is a game-changer. Additionally, it provides insights into pricing, sales strategies, and product offerings for better decision making.
CPQ software ensures that salespeople use the latest pricing, eliminates errors, and ensures they follow set margins. It also handles deal complexities such as temporary promotions, customer–specific pricing, currency fluctuations for international sales, etc.
Provides accurate and professional proposals
Handling proposals manually risks not only typos and miscalculations but font and format differences. All of which result in unprofessional looking quotes. As a bonus, CPQ software proposal templates can be branded, are customizable, and include personal content. So you’ll send quotes that are error-free and professional looking.
Automate notifications with CPQ software
Reduce or even eliminate delays by providing internal resources with electronic notifications of quotes that require approval.
Using configuration rules, sales reps receive product or service recommendations that complement the requested product. This enables them to quickly add upsell and cross sell offerings to the quote.
Provides actionable insights
The CPQ system provides a wealth of useful information. After analyzing it you make more informed business decisions, improve business processes, etc.
Are all CPQ Software Solutions Created Equal?
The CPQ software market is seeing extraordinary growth. This January 2023 report predicts that the figure will reach US$7.3 billion by 2030. That’s an increase from US$2.2 billion in 2022.
With CPQ software in high demand, the number of vendors that provide this software is also on the rise. To give you an idea of this growing market, a recent comparison of CPQ software providers rated over 140 vendors on various aspects of their solutions.
Is your company ready to replace manual and error-prone processes with the automation provided by CPQ software? Are you ready to take advantage of its many benefits? If so, exercise due diligence to ensure you purchase the CPQ solution that best meets the needs of your organization.
CPQ Software Can Improve All Aspects of Your Sales Cycle
You need to develop the most accurate quotes possible, in the fastest way imaginable. As part of our unified quote-to-cash (Q2C) platform, BillingPlatform’s CPQ meets the demands of today’s buyers such as a fast and seamless purchasing experience.
BillingPlatform brings CPQ and billing together in a single solution. With a single product catalog, it allows quotes to seamlessly translate into billing. By supporting both physical and digital goods, including hardware components, software bundles, and associated services, you can quote, price, and bill for any business model. It also easily turns quotes into billable services.
BillingPlatform provides the industry’s only unified Q2C solution. It supports the entire revenue management process from a single source of truth. We provide pre-built connectors to Salesforce CRM, Microsoft Dynamics 365, and NetSuite ERP. So you’re able to onboard an end-to-end solution that delivers the deals your customers want at prices that will enable you to increase revenue and boost profitability.
Curious to learn even more? Take a few minutes to listen to BillingPlatform’s CSO and Co-Founder, Nathan Shinn share his wisdom on CPQ in this podcast!