If you’re like many of your counterparts, you’ve struggled to determine the right price for your products and services. Charge too much and customers will flock to your competitors, charge too little and you may find yourself operating in the red. Establishing the right price depends on a number of variables such as your regional economy, competition, the perceived value of your products and services, the number of potential buyers, and costs associated with your products and services. Coming up with the right price for your offerings isn’t easy, nor is it a one-and-done initiative. This is where configure, price, quote (CPQ) software can make a difference.
Designed to help companies accurately determine the price of products and services, CPQ takes into consideration constantly changing variables and aggregates them. This allows businesses to configure products or services in the most optimal way, price them according to the variables mentioned above, and provide a quote to the customer with the best possible price possible. Does this mean that every business needs CPQ software? Not necessarily. Before we discuss when and why some companies need CPQ software and others don’t, let’s take a look at each of the components that comprise CPQ.
What is CPQ Software?
Essentially, CPQ software improves the sales cycle by making it more efficient, productive, and successful. Used to create accurate quotes for complex and configurable products, it speeds product configuration and proposal creation, reducing the risk of human error to improve the buying experience. Consisting of three elements: configure – price – quote, each of these components perform a specific function.
As the word implies, the configuration function ensures that products and services are configured accurately and meet customer specifications.
Allows your sales reps to choose between products, bundles, packages, and services, and provide approved discounts. If you offer customizable products and services, chances are you don’t have predetermined pricing, so ensuring accurate configurations plays a key role in the pricing.
With configuration and pricing out of the way, you need to generate a quote as fast as possible. It goes without saying that prospective customers are also requesting quotes from your competitors, and it is in your best interest to beat them to the punch. Not only do you need to expedite the quotation process, but you need to ensure that it is personalized and error free.
As you can see the automation provided by CPQ software offers enormous benefits. From expediting the sales cycle and ensuring accurate pricing to eliminating errors and providing upsell or cross-sell opportunities, CPQ software has its place in many organizations. However, the question remains – does my business need CPQ software?
Should I Invest in CPQ Software?
CPQ software can eliminate many of the hurdles your sales reps encounter to deliver an award-winning quote. But as mentioned previously, CPQ software isn’t for every company. To help you determine if you need CPQ software, we’ve compiled a list of questions that’ll help you make this decision.
- Are you in the process of creating a recurring revenue stream?
- Do you have hundreds or thousands of product or services offerings?
- Are your offerings complex by nature?
- Do you offer customizable products and services?
- Does your sales team rely on spreadsheets to configure your offerings?
- Are you losing revenue due to excessive discounts?
- Are the quotes you send the last ones to be received by the potential buyer?
- Have you found yourself plagued with sending out inaccurate sales quotes?
- Do you employ personnel to manually review all sales quotes?
If you answered yes to one or more of these questions, it may be time for you to start shopping for CPQ software.
Not All CPQ Software is Created Equal
It goes without saying that the CPQ market has seen extraordinary growth, and according to Technavio this is expected to continue. They forecast that the CPQ software market size will grow to USD 1.14 billion between 2020 – 2024.
If you decide that your company could benefit from CPQ software, homework is essential to ensure that you select the right CPQ solution for your business. Did you know that there are more than 40 companies that provide CPQ technologies?
Improve Your Entire Sales Cycle
You want and need to develop the most accurate quotes possible, in the fastest way imaginable without taking your sales reps away from what they do best – selling. BillingPlatform provides you with the best CPQ solution in the market. By combining our forces we’re able to deliver a complete solution that takes you from the configuration process through to order fulfillment and revenue recognition. Talk to a member of our team today to learn more about BillingPlatform CPQ solutions.