Configure Price Quote (CPQ): What Every Business Needs to Know
Paula Echon
Content Strategist | SEO Content Writer. I help digital clients and visionary entrepreneurs reach their goals and collaborate for excellence one word at a time - allowing business growth and scale-up through content.
The CPQ acronym stands for configure, price, and quote. The answer may seem obvious, but it barely scratches the surface of what CPQ can do for an organization.
When selling identical products simultaneously to all the same customers, the price is straightforward. However, this doesn’t apply to all B2B SaaS businesses.
Sellers may encounter problems in a highly crucial field: the price.?
This article delves deeper into the benefits of CPQ, from its basic applications to its enormous potential.?
What is meant by CPQ?
Configure Price Quote (CPQ) is a software platform that helps sellers generate accurate price quotes for complex configurable items.
CPQ apps integrate with your other business technology, such as CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) (Enterprise Resource Planning).?
You can set up rules to account for different quantities, special discounts, optional features or customizations, currencies, payment types, etc.?
Automation and synchronization contribute to accuracy and efficiency.
You can achieve efficiency in your sales cycles and increase sales productivity and profits. Speeding product configuration and proposals helps eliminate inaccurate quotes and offers your customers a better buying experience.
A Configure Price Quote system automates three sales process steps to streamline and accelerate them. The three integrants are Configure, Price, and Quote. Let’s examine them.
Configure
The “C” in CPQ software means designing and producing products according to specific customer data such as requirements and preferences. Companies sell items that buyers can customize or personalize most of the time.?
The products can have a base price, but the quotation will include any incidental costs because of customization. Customizing is a considerable benefit to customers but time-consuming and laborious for sellers.?
Configure Price Quote automates the process of figuring out charges for products and services supplied according to customer needs. This can be achieved using base product models, references of approved options, and guided selling features.
CPQ system controls product and service options, available feature combinations, pricing, and discounting and automates quote processes. It helps sales teams quote fast, sell right, and achieve customer success.
A CPQ tool aids in configuring your product offerings, so they exactly fit your customers’ requirements. And it will provide a straightforward way to construct, visualize and specify your product offerings. The right CPQ will make the entire process easy to navigate and control. You’ll minimize the likelihood of human error, and your sales reps can spend more time connecting with customers.
Price
Customized products require complex pricing structures.
If your organization offers flexible product options, it will be impossible to have set prices. The more options available, the greater the range of prices.?
Trying to predetermine prices before the configuration process is doomed to failure, but pricing each item manually after the configuration will greatly slow down the delivery time.
This is where the accurate pricing data function of CPQ software solutions comes in. Now you can automate the process to generate exact sales quotes for products based on the rules you enter into the software system. Some methods of pricing are:
CPQ lets you offer a personalized, accurate price to your customers while maintaining your profit margin.
Quote?
Quote is the final step in the CPQ process.?
Your customers will receive detailed estimates based on the configuration and price.?
An accurate quote reflects your organization’s professionalism, and you will stand out, especially if customers request multiple quotes. The quote is a way for you to summarize what you’re offering and your terms.
Because of the complexity of configurable products, quoting can be difficult. Quotes must be accurate, but without CPQ software, they can be time-consuming to compile and revise.
CPQ software provides a seamless, error-free method of generating and delivering personalized, accurate quotes. Before submitting, salespeople can quickly review and adjust details.
Why use CPQ tools ?
CPQ software helps speed up and improve your business process. Configure price quote software makes generating a quote simple, efficient, and flexible. CPQ’s sales tool will allow you to load all of your product information and any standard package, combination, or discount, so a product rep can make custom products faster and more efficiently.?
The Benefits of CPQ Software?
Image source: Unsplash
Many businesses, however, still do not use the CPQ solution during their sales processes. Because they are unaware of the positive impact it can have on their business, they are unsure if it is worth investing in or believe they do not require it.
Simplify the complicated
Simplicity is not the same as simplification. It refers to the art of keeping things as simple as they need to be.
Implementing a cloud CPQ solution is frequently transformative because it provides a lens to view many processes and how they interact with one another. A well-designed and implemented CPQ cloud will remove the layers of process inefficiency accumulated. It provides every team with the correct information at the right time.
Increase accuracy and eliminate errors
Image source: Unsplash
领英推荐
CPQ software improves process automation and enables you to select and price combinations of interdependent product and service options with greater accuracy.?
This means that your sales reps can confidently create and price tailored solutions without the need for anyone to double-check them.?
As a result, there’s a reduction in the cost of correcting errors later in the process.
Efficiency and speedy response times
In B2B sales, the ability to increase business coincides with how quickly you can provide an accurate, high-quality proposal to your client.?
The first seller to arrive at the table with a professional, compelling quote will undoubtedly win the business.?
However, if you tie your data to Excel, creating a quote can take a long time, especially if there are multiple file versions.
Even if your company has complex configurations and one-of-a-kind solutions, CPQ tools can provide accurate prices and quotes in minutes. Collaboration tools enable all experts and contributors to work efficiently on a quote in the same system.
A larger team of individuals can answer questions posed by prospects and clients during your selection process by sharing the knowledge of experts within a CPQ system. This eliminates uncertainty and delays, streamlines the quote process, improves quality, and shortens response time.?
Providing the most accurate estimates
CPQ solutions shorten the time it takes to generate quotes.?
Faster quoting means you’ll have more capacity to quote, and you’ll be able to produce more quotes per employee without sacrificing quality.?
Using configuration rules structure allows anyone to be guided through the process, increasing capacity.?
Your organization need not rely on key personnel, and you will quickly provide quote revisions to clients, regardless of how complex the situation is.
CPQ processes free up time by eliminating manual quoting processes and reducing business complexity, allowing sales teams to sell more and focus on building relationships with customers.
Reduce learning requirements
Rules can guide and automate the sales team’s design and construction of even the most complex solutions.?
Even for complex products and services, the learning curve for users is shortened. Most of the time, no training is required because the user experience is intuitive.?
This especially applies if you want to encourage cross-selling and up-selling items that your sales team is unfamiliar with.
Enhance brand image
Increased presentation consistency can lead to a better market image and customer success.
When individual sales team members are less likely to use their quote templates, it is easier to direct and control the brand image in the way the business requires.?
You can frequently use an improved perception to justify higher prices with buyers.
Empower employees, channel partners, and customers
Well-implemented CPQ solutions can empower and motivate the entire sales organization.?
It can give a larger group of people on your team the confidence to talk about product details with customers and prospects and create quotes tailored to what the customers demand at the time and how they choose to engage.
Reduce cost
CPQ solutions bring reduced costs and fast returns on investment. You will achieve an immediate payback on your CPQ investment through the ability to quote more jobs and increase the conversion rate, which reduces the cost of a sale and also eliminate the cost of errors.?
Consequently, many companies now consider this one of the most significant areas for cost reduction and revenue streams. Both the customers and employees see it as highly positive.
Industries using CPQ
Many organizations and industries that sell various products use CPQ software.?
Businesses require a tool that is both versatile and adaptable to meet precise and changing requirements. The following industries enjoy the benefits of CPQ:
The truth is that any company that sells configurable products would benefit from CPQ software that is modern, integrated, and simple to use.
Moving beyond CPQ jargon
Sales organizations understand how challenging quoting can be.
If you offer a wide selection of products, prices may differ according to specifications. The traditional quoting process results in custom pricing and order errors.?
You can lose deals to those competitors that can produce an accurate, high-quality quote in minutes.
CPQ software systems can revolutionize your quoting process and genuinely benefit your sales organization.
Coolshop is enthusiastic about collaborating with you in building a sales team empowered by robust and scalable solutions.
Let us start your journey to success!