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Why are CPQ and Dynamic Price Management Important?

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Why is CPQ important?

CPQ is important for its advanced sales features and sophisticated selling tools. It helps leverage their capability to better deploy optimized prices derived from multiple sources. As the channel selling structures, product configurations, and sales cycles become more complicated, CPQ-driven sales strategies can provide more benefits.

Pricing used to follow the conventional supply and demand rule. Today, many top brands have embraced unconventional, dynamic pricing and selling strategies. Global firms like Walmart, Best Buy, and Amazon have been reaping unprecedented profits. This shift from the old pricing norm is best characterized by the increasing deployment of smart sales technologies. These tools are CPQ software and dynamic price management platforms, which we’ll discuss in detail.

Below, you’ll learn the finer details why these two top sales engagement and pricing optimization tools are among today’s most important revenue and productivity engines that many high-performing organizations worldwide deploy. After reading this article, you can decide with clarity on how CPQ or dynamic pricing fits your business.

CPQ and dynamic price management importance

CPQ tools were initially used to help sales reps manage how customers choose their product specs. Now, they’re designed to boost sales team productivity and enhance business outcomes. Likewise, more and more businesses are using dynamic pricing strategies. This helps salespeople optimize their pricing schemes based on current market conditions. Dynamic pricing enables businesses to benefit from AI and Big Data.

For decades, the use of static or fixed pricing had caused too much inconvenience–like spending too many resources and time to identify the price that somehow will create the highest possible profits–aside from being highly unreliable in predicting the effect of the fluctuating demand into the price or the depreciation value.

Static Out, Dynamic In

In today’s market, the buying process has become very complicated. One study found that 94% of B2B buyers conduct online research at some point in the purchasing cycle. The sales process is getting slower and longer. Sales reps must quickly provide the correct quote. If it takes longer, the buyer might look somewhere else.

In recent years, B2B sales cycles have been expanding by over 20%. Businesses can now choose to set their price based on their preferred target consumers to try reducing the selling process. The problem with this is the possibility that the brand might appeal excessively to an unexpected or different consumer or market segment that does not like the price. This can impede the volume of sales and transactions with the target market. It is in this bleak scenario that dynamic pricing comes in, which can help businesses transform problematic markets into viable ones.

cpq dynamic pricing

Hospitality businesses like hotels and airlines have long been using some dynamic pricing schemes. Decades prior to the internet, airline companies had been using expensive price optimization platforms. This involved setting-up gigantic data overflowing with servers to operate them. Large teams of pricing professionals were employed to run the systems.  

These technologies had advanced their capabilities over the years. They used to be very expensive. Now, even small businesses can deploy dynamic pricing and CPQ tools. Let’s now discuss the key aspects of CPQ and dynamic pricing.

What is CPQ?

Configure Price Quote or CPQ software is a popular tool for helping businesses provide what their customers really want. It supports core sales processes like quote presentation, price negotiation, solution configuration, and product selection that can be deployed through various interfaces. CPQ solutions can automatically configure products that suit the particular needs of consumers, who are given the capability to custom design in real-time their orders, with precise pricing. Salespeople find CPQ as a very efficient tool for identifying and taking action on sales leads, making it an ideal means for growing a business through lead generation.

Elevating Sales to New Levels

A recent survey found that 83% of sales teams use smart tools for configuration, price, quote, etc., all of which CPQ tools are known for. CPQ automates the quoting system to offer a seamless customer experience Using features like 3D product configuration, quoting management and guided selling. These are among the benefits that are known to leave a long-term effect on customer satisfaction and sales team effectiveness. 

Essentially, CPQ tools are best known for their robust efficiency to design product pricing and product smart quotes. CPQ provides the capability to configure pricing models to generate precise quotes. Intelligently-generated proposals are made, based on the specific customer requirements. The efficacy of CPQ platforms has been proven in many studies, including one that found to help sales teams produce more quotes, RFP responses, etc. by as much as 49%.

Top Sales Functions where Intelligent Sales Tools are Deployed



Identifying New Sales Leads


Proposal Generation


Capturing Signatures to Close Deals


Source: Accenture's Empowering Your Sales Force report.

Designed by

What is Dynamic Price Management?

What is dynamic pricing? It is an established retail strategy that uses variable pricing rather than the more common fixed pricing method. Dynamic pricing isn’t something new. The basic concept of the “Happy hours” that bars used is a perfect example of dynamic pricing. By advertising that drinks and food are offered at discounted prices for a specific time period, throngs of customers are regularly attracted to such establishments that profits for that time usually increase.

Leveraging Big Data

In today’s era of Big Data and IoT, an overabundance of market data must be analyzed to allow the calculation of optimal prices for product and service offerings. The time between price changes depends on the business and the item, although it can be as frequent as daily or even hourly. One study found that the frequency of price changes at multi-channel retailers rose from 15% a month from 2008 to 2o1o to almost 30% from 2014 to 2017.

Demand and supply used to be standard in pricing. Today, dynamic pricing management helps businesses influence the outcomes of their sales and marketing operations to their advantage. This is achieved with the tool capitalizing on advanced data, including previously used data sets. Actually, the dynamic pricing can only be achieved when one has all the data on hand. Dynamic pricing typically involves an automated process that focuses beyond conventional factors. With today’s highly complex business environment, along with other solutions like smart marketing automation platforms.

Why is CPQ Important?

Reinvents Sales Efficiency

CPQ today is now going beyond product configuration and is progressing to ensure that orders accomplished by sales teams are efficiently created. CPQ is reinventing sales efficiency. Each aspect of the sales cycle is being enhanced by CPQ. Businesses were found to experience a 17% higher lead conversion rate with CPQ software.

Streamlines Omnichannel Selling

Businesses are faced with the challenge of consistently providing excellent experience in every selling and service channel. Considering the extent of operations, product, and services businesses use to operate, being good at omnichannel selling is really hard. Cloud-based CPQ tools boast of its unlimited scalability configured at the application level, which allows them to initiate distinct selling and service approaches. CPQ is now streamlining omnichannel selling. To verify this, customers have mentioned that Salesforce CPQ decreases their average time from quote to close by 26%.

Foundation of Intelligent Cloud

Machine learning and AI help salespeople now know when to offer particular cross-sell campaigns, upsells, or price incentives based on consumer patterns. Sales and marketing teams are combining large data sets and employing the combination of CPQ and machine learning to build up better insights. In turn, these insights are helping businesses enhance deal sizes, hasten the sales processes, and eradicate obstacles to generating and closing more deals.

Intelligent Cloud Maturity Model

The Intelligent Cloud Maturity Model. (Source: Forbes)

Core of Intelligent Cloud Maturity Model

By using descriptive analytics, CPS tools can precisely identify the competitive market environment for a service and product. This is the area where most businesses are starting to integrate robust data analytics tools into their CPQ approaches. CPQ tools are at the core of the Intelligent Cloud Maturity Model. The combination of CPQ and descriptive analytics results in true predictive analysis. This, in turn, directs advanced deal, discounting, and pricing analysis. As they shift from multichannel to embrace omnichannel selling, businesses require an ample amount of data to allow seamless collaboration.

Why is Dynamic Price Management Important?

Fast Competitive Pricing Adjustments

Dynamic pricing management has assumed a pivotal place in today’s digital business landscape, mainly because of automation, unceasing competition, and customer sophistication. In a brick-and-mortar setup, store personnel must physically replace the price tags on thousands of products. For stores that use dynamic pricing, the price of an item can be proactively changed without incurring considerable expense to the business. It works seamlessly along with today’s best POS tools for retailers

Enhanced Flexibility

Top corporations are aware that in the present digital marketplace, dynamic pricing is a crucial driver for success, relevance, and growth. Real dynamic pricing only happens when a company is able to change its prices to match demand and supply. 

Using Technology to your Advantage

Key to optimizing the efficiency of dynamic pricing is the integration of machine learning and AI. These tools allow dynamic pricing algorithms to learn patterns and train on inputs. Remember, AI can identify patterns that people cannot see. Thus, an AI-powered dynamic pricing platform can run at a considerably more demanding level compared to rules-based tools of the past, where people are forced to understand and predict things that could happen. Further, AI is known to expand CRM efficiencies.

What are the Top CPQ Tool Benefits?

Reduces sales cycles

A CPQ’s smart features like automated quoting enable businesses to have shorter sales cycles. Automated quoting enables sales teams to spend more time selling. They can now focus on attracting new clients to buy products. Studies have found that CPQ software can shorten the sales cycle by a third, which shortens the average sales turnaround time from 4.68 months to 3.42 months.

Helps improve quoting productivity

A CPQ application gives precise quoting to clients as they personalize their orders in real-time. This results in higher productivity in their quoting tasks.  This enables salespeople to produce and dispatch more proposals, contracts and quotes faster. CPQ solutions have been found to help quote productivity increase by as much as 33%.

Boosts sales team performance

One of the biggest benefits of a CPQ tool is found on how it enhances sales rep performance. By providing a user-friendly ordering system, consumers can likely finish their orders more quickly. A CPQ solution is an efficient way to help increase conversion rates and lessen order cancellations. One important area of improvement that CPQ had been proving to be very helpful is in addressing the severe document disconnect and lack of system automation in many businesses. One survey found that 61% of employees typically access four or more systems to get the information they need to do their jobs.

Salesforce CPQ Quote dashboard sample

A Salesforce CPQ dashboard showing a quote being completing using a smart template.

Increases sales rep efficiency

Sales reps spend over five hours each day doing administrative tasks like data entry. As a sales rep, they should be spending the majority of their time selling. They simply don’t have the time to manage multiple systems and relationships. A CPQ solution eliminates their quoting, pricing, and proposal management tasks. As a result, they can spend more time selling and less time encoding data. It was found that CPQ reduces the number of quote revisions by 13%.

Reduces order and quoting errors

Manual management of numerous proposals and contracts often results in errors. These include oversights like incorrect dates, signatures, or names. These errors do add up, which lengthens the sales cycle. This could leave a poor impression on your customers. By automating your quoting and pricing in CPQ software, human error is taken out of the equation, dramatically reducing errors and the number of quote revisions per customer. From deal size to quota goals, reports have found that companies with CPQ software have a 105% larger than average deal size.

What are the Dynamic Pricing Advantages?

Enables businesses to remain competitive

Businesses that have restructured their pricing methods to incorporate dynamic pricing have become capable of remaining competitive as they now have the power to readily bring down their prices–for the best of reasons–against the competition when the need arises. It should be noted that dynamic pricing is not simply about underselling in the market. It’s really about empowering businesses to adjust prices based on their own objectives, like revenue, or profit.

Making changes in one’s pricing rates to remain competitive is crucial in this digital marketplace. It only takes customers a few seconds to look around for options. In fact, Google Shopping actually penalizes products that are not competitively priced by putting them in a lower ranking in the ad listing despite CPC. Top retailers in the world, such as Amazon, have implemented dynamic pricing for years now and have continued to enjoy considerable benefits. Amazon averages over 2.5 million dynamic price adjustments daily.

Amazon dynamic pricing sample

A sample Amazon dynamic pricing changes chart for an unspecified product.

Helps you gain higher profits faster

Businesses can achieve better profits for each sale by using flexible pricing strategies. Dynamic pricing enables businesses to seize any market segment they want to capture ASAP. This is done without conducting any lengthy market research. If prices are higher, businesses can readily adjust by focusing on capturing affluent customer segments. This means more profit per unit sold. Utilizing the available market data for dynamic price optimization enables a business to enhance conversion rates. It helps identify maximum pricing that levels margins and conversion rates.

Improves inventory management

You can use dynamic pricing for best-selling items to increase prices for higher profits. On the other hand, when a store has too many non-moving items, a business can quickly cut the prices of these items to support faster clearing out cycles.

Gives you access to real-time market data

Dynamic pricing gives businesses ready access to real-time data about current market movements. They can easily determine the quick impact of a price change and get insights on price responsiveness to market demand. This information is perfect for manufacturing and supply chain use. Businesses can clearly see if a product will perform well among consumer segments or not at different pricing schemes; they can expand or reduce manufacturing levels. Dynamic pricing management enables a business to design their pricing strategies based on actual, market-derived data and related factors.

What are the CPQ Market Leaders?

The top CPQ vendors are continuously designing and launching new solutions that seek to further simplify the selling process. CPQ’s intrinsic value is in measuring how it contributes to each selling stage. Every one of the current 60-plus vendors competing in this market can provide measurable improvements based on their application’s technologies and tools. Moving beyond the basics, the top CPQ vendors are now guiding upsell and cross-sell strategies. This provides contextual intelligence and recommendations based on machine learning and AI.

Salesforce CPQ

Salesforce CPQ analytics dashboard

A Salesforce CPQ dashboard showing a product’s report and analytics highlights.

One of the most popular CPQ software is Salesforce CPQ, a configure price quote software designed on the Salesforce platform, with the entire resources and integration residing within every Salesforce event. This robust and innovative solution is deeply integrated with Salesforce. This setup increases its adoption rates across sales teams aside from cutting time-to-first-sale for sales newbies. This industry-leading platform provides the biggest value in high volume and small-to-medium complicated processes of CPQ-powered product and services offerings.

Salesforce CPQ, formerly SteelBrick, is configured to help business users increase their bottom line. One such way is by helping substantially cut organizational time by implementing lean operational practices. This CPQ streamlines key business processes like proposal creation and submission. Even when sales teams are doing fieldwork, they can readily access key company information through their mobile since this CPQ is integrated with Salesforce CRM.

The best way to find out how this solution can help you is to try the features at no cost. You can easily do so when you sign up for Salesforce CPQ free demo here.

A powerful way to provide value to clients is helping them solve their business problems. Salesforce CPQ can be readily used as a Subject Matter Expert (SME) by sales teams. This provides them with adequate knowledge in problem-solving at all times. Armed with a robust SME for each sales call, sales reps can readily answer any product- or service-related queries. The outcomes are larger deals.

Similarly, Salesforce CPQ helps in boosting sales by generating precise quotes. It can efficiently forecast any possible pricing scenario and simplify the quoting activity. After implementing the platform, one Salesforce CPQ business user reports of a 30% higher quote precision. With increased efficiency in making the right quotes, a business will earn more trust and satisfied clients.

Other CPQ Solutions

Oracle CPQ Cloud

CPQ solution helps simplify the selling of brands to allow higher scale and speed. Oracle CPQ Cloud can be deployed as a standalone application or it can be integrated with leading CRM solutions, eCommerce, service and ERP platforms to provide seamless omnichannel customer experiences. The former BigMachines, Oracle CPQ Cloud can verify whether a particular quote is profitable and buildable prior to offering the quote to a client. This tool supports guided selling, among its many other features.

Configit Quote

Configit Quote This CPQ tool offers configure-price-quote functionality packed with complete mobility. Quotes can be generated anywhere, at any place anywhere. Configit Quote uses authoritative configuration data from an SAP Variant configurator. Its Configit Quote Portal is integrated with Salesforce Sales Cloud and offers platform-independent CPQ from online mobile devices. Its Configit Quote Desktop app is configured for sales reps that need unlimited and permanent access to their packaged orders and quotes.

Apttus Intelligent CPQ

A robust CPQ solution that supports both omnichannel and multi-channel selling, Apttus Intelligent CPQ is another leading choice for managing complicated proposals, pricing, and product designs in any type of channel that a business uses. Apttus is known for its tested capability to scale through various telesales, field sales, and business partners and handle an extensive array of online selling strategies.

What are the Leading Dynamic Price Management Platforms?

Zilliant IQ

This is a widely-used AI-powered price optimization tool that delivers detailed, dynamic support to management, sales, and pricing. Zilliant IQ is backed by the vendor’s over two long decades of pricing science innovation and numerous deployments. Its AI-based pricing engine evaluates data on various aspects. These include competitor prices, market share, products, customer size, orders, agreements, and quotes. This approach enables Zilliant to generate the most personalized prices that directly addressed particular customers and business clients.


This is one of the first cloud-based price optimization, CPQ, and price management solutions. Pricef(x) is can be readily configured to any type of pricing approach, for any type of business. It can be quickly deployed without risks or initial costs. Its PriceAnalyzer allows businesses to generate precise insights into their product, customer, margins, and pricing segments and determine pricing opportunities. It has other smart features like PriceOptimizer and PriceBuilder.

Competera Price Intelligence

This dynamic pricing solution is configured for enterprise and mid-sized businesses and eCommerce companies with established, automated pricing models. Competera Price Intelligence offers real-time data scraping capability and allows the delivery of large data volumes. This, in turn, enables businesses to gain efficient pricing schemes. This tool uses AI-based algorithms for generating predictable margins, sales, and market demand.

PROS Pricing

This AI-powered dynamic pricing tool offers CPQ and revenue management. It enables businesses to sell smarter, more efficiently to ensure higher profits and better margins in today’s economy. Its machine-learning advantage helps businesses fully optimize each interaction. It uses a price optimization strategy that delivers the best pricing fast. PROS fosters a fundamental, customer-driven purchasing experience.

The Future of CPQ

We’ve discussed some of the key highlights and important developments about CPQ and dynamic pricing. The future of these two robust business platforms appears bright and exciting. CPQ’s pricing methods will be more carefully configured to increase its efficiency. Quotes for the top profit-generating brands will be made within a few minutes of a sales call and delivered quickly. If you’d like to try this leading CPQ solution, you can easily do so when you sign up for Salesforce CPQ free demo here.

The new age of smart selling had dawned upon us. It is transforming how CPQ tools are being deployed for simplifying and streamlining complicated selling techniques. To take advantage of dynamic pricing, a business must purchase or create the needed capacity. This involves considerable work, including substantial testing and building the required business case. By the way, these smart tools work best when integrated with the best sales automation solutions.

By Nestor Gilbert

Senior writer for FinancesOnline. If he is not writing about the booming SaaS and B2B industry, with special focus on developments in CRM and business intelligence software spaces, he is editing manuscripts for aspiring and veteran authors. He has compiled years of experience editing book titles and writing for popular marketing and technical publications.

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