CPQ means Configure, Price, Quote. This is an integrated process for accurately generating sales quotes fast, which enhances the purchasing experience. CPQ helps advance the selling process by removing cumbersome manual processes. It helps in streamlining the entire process, as well.
In the past, everything must be done manually, which is a slow process and prone to mistakes. As with sales, businesses must manually compute sales quotations and prices for their products. Thanks to automation technologies like CPQ, there’s no more need to calculate and do other things manually. What is CPQ?
CPQ tends to look very complicated and too technical to understand. That’s not very true. Vital to appreciating what CPQ rests on understanding its core processes. This post will help you appreciate the process flows behind Configure, Price, and Quote.
CPQ software is just one of the fastest-growing B2B and B2C platforms today because it hastens the quote process and proposal generation. It opens the door to numerous opportunities to cross-sell and upsell.
With the growing demand for product configuration, advanced tools like CPQ and dynamic pricing management are becoming essential to today’s businesses.
As a process, CPQ is part of the larger order-to-cash (or lead-to-cash) business cycle. Order to cash is likely the most crucial customer-centric process in an organization. It begins with the customer’s intention to buy and ends 66with revenue recognition.
Utilizing AI-based technologies like CPQ and in-depth integration of data, you can make your processes inherently intelligent, thus guiding sales to be proactive, rather than reactive, to the changing customer needs.
The sales cycle of any business depends on opportunities and deals.
To follow an opportunity, sales teams spend too much time scouring through a conflicted system. From what they can gather, they’ll use their instinct to follow through. And this often leads to disintegrated talks, which almost always result in lost deals.
Salespeople can now effectively engage and convert promising leads into actual customers.
The smart, highly efficient approach that CPQ provides removes the clutter from the sales pipeline. It allows for better forecast precision, as well. We’ll learn more in this CPQ guide about the various processes behind this disruptive technology.
A standard CPQ definition is that it’s an advanced sales tool designed to help companies generate highly configured and precise quotes. This simplifies the complicated business protocols, pricing, and configured products.
CPQ centralizes, automates, and makes available the needed and correct information to salespeople in real-time. And at the center of these are the CPQ solutions.
This sophisticated software application streamlines the configuring, pricing, and quoting needs of sales. In today’s market of evolving goods, CPQ provides the needed increased precision in pricing.
Higher proposal volume%
More reps achieving quota%
Shorter sales cycles%
Better at creating complex, accurate sales quotes in real-time%
Higher lead conversion%
Source: Aberdeen, 2017Designed by
Each sales agent becomes a specialist in product configuration, pricing, and quotes with CPQ. Delivering exactly what customers need enhances the sales experience.
This technological tool improves the selling process as well by generating accurate, expertly-prepared orders and quotes. Thanks to the cloud, salespeople can do these anywhere using any device. CPQ allows for better visibility across the whole sales cycle, as well.
Other benefits of CPQ include accelerating the selling process and providing salespeople more time to sell. It increases the accuracy of pricing and removes room for any error. All of these new efficiencies translate into improved profitability for businesses.
Disparate processes and siloed teams typically characterize traditional business models. Small businesses often focus on how to increase revenues, which makes them overlook improving their business processes.
A successful CPQ deployment lies in initiating organizational change and in the adoption of several best practices that include:
It’s good to know that you don’t have to build these crucial CPQ capacities from the ground up. A case in point here is Salesforce CPQ, a leading configure price quote solution.
This is integrated within the Salesforce Platform, which allows you access to even more resources. With this CPQ solution, all mandatory CPQ skills or practices are already built-in within the platform.
You can try this robust guided selling workflow tool for free when you sign up for Salesforce CPQ free demo here.
What’s more, they’re placed strategically within the Salesforce CPQ process flow. This means that these capabilities will be automatically triggered when it’s time for them to function.
Take for instance, the need to initiate guided selling. Salesforce can help you bridge the gap between your clients’ needs and the possible product configurations that you sell. Its guided selling process starts once you’ve added products for quote. You then need to answer a series of questions to generate a list of recommended products that suit the requirements.
For every quote you make, you’ll receive a dynamic, responsive experience. This way, you’ll quickly identify the product configurations that best suit your customers’ needs.
Configuring products is not something new. We’ve been configuring some of the things we buy for a long time.
We create custom playlists for our music. We build our cars on dealer websites based on our desires and budgets. And how about those extra sour cream and tortillas in your favorite burritos? Well, those are product configurations.
The configure process involves the selection and combination of options to build a customer-specified product. The rules of configuration and limits related to the product control the process.
The extent of work involved to customize a product or service according to customer specifications is already considerable. And adding the time element makes it more complicated.
A CPQ removes all the intricacies, time-element, and other demands. This innovative software enables sellers to offer unique combinations of products and services that address specific consumer needs.
Today, sales efficiency depends on two things. First is the sales person’s capability to understand what a customer wants. The second is to guide the customer on the best mix of product features that can be worked out.
Just like a robust sales platform, CPQ helps salespeople to perform these needs with ease and accuracy per customer.
An in-depth analysis of the product or service portfolio is crucial to a successful configuration. It involves the need to search for patterns within the processes and features in the portfolio as well.
Configuration aims to look for common elements that can be produced using the same machine. It seeks to identify similar components used in all product variants.
A product configurator typically has a user interface that visually shows the product configuration overview. A commonly used tool here is the Microsoft Solver Foundation product technology for constraint solving and modeling.
In the past, product designers relied on a developer for the entire configuration cycle. This reliance starts with creating the product configuration model and testing it up to releasing it to the sales unit. With a CPQ tool, the product configuration process is simplified and made more efficient.
The process itself can even be a great marketing tool, like the Magento-based product configurator of Nike. Easy to use and with a clean design, this customizer tool features advanced dynamic imaging. Every time you choose or alter your options, the product picture changes based on your choice.
In today’s dog-eat-dog market environment, the reality is that businesses seldom sell products at their full list prices. Very few are able to sell at their regular pricing schemes in all selling situations.
As consumers continue to grow in sophistication, the best approach turns out to be offering special pricing offers. For bulk orders, businesses usually offer volume or bundle pricing and giving additional discounts to enhance the deal.
Making special pricing calculations on-the-spot is difficult and could be harmful to the business. Using inconsistent and wrong discounts often lead to adverse results.
It should be noted that the initial forms of CPQ platforms focused more on the configuration aspect, while the second generation improved the quote function. Fortunately, the current class of CPQ solutions is now using the long-awaited price optimization feature to complete the package.
Today, CPQ software efficiently optimize the pricing process for all the products and services your company sells. It allows salespeople to quickly generate accurate quotes with consistent pricing that include the correct discounting schemes.
You only need to set the pricing rules for handling the various pricing schemes that your company uses. These include channel and partner pricing, prenegotiated contract pricing, percent-of-total subscriptions, and volume discounts.
To know first-hand how the pricing AI works within a CPQ solution, a good example is the Automated Repricing tool by Amazon. This helps sellers a lot in conducting competitive pricing in real-time.
Reaching the quote stage means only one thing to a salesperson: the need to close the deal.
Manual quotes always open the door for errors. These could include typos or using wrong figures or details, which could lead to issues.
With CPQ, sales teams can create quotes fast, send them through email, and sign them electronically to close the deal. You only need a few clicks to do everything. To optimize this process, you can integrate it with a reliable email management platform.
A CPQ platform uses automation technology first to derive product data. Next, it calculates pricing and displays precise product configurations. Aside from removing any room for errors, the solution hastens and professionalize the quoting process.
The platform can create quotes that align with a company’s branding rules. It can build a professional and generate a polished effect.
After creating a PDF file of the quote, you can send it to the customer. An e-signature tool comes in handy when finalizing quotes.
CPQ-generated quotes are dynamic. If you need to make changes or introduce special terms, these quotes will be updated instantly.
There are common signs indicating fundamental problems in your sales process. Adopting a CPQ solution is the best recourse to address these problems.
Are you encountering some of these signs in your sales operations? Well, it could be the perfect time to implement a new CPQ platform. And it’s good to know that you can first test-drive at no cost today’s leading solution to see if it fits your needs. You only need to sign up for Salesforce CPQ free demo here.
A final tip: a CPQ solution works best when it’s used together with your other core business applications like CRM platforms.
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