Emilia Dunaj
Emilia Dunaj
Head of Technology Insights
May 2024, 15 min. read

Pricing out configurable products manually means spreadsheets, calculators, and a constant fear of typos. For industries engaged in complex sales, the stakes are even higher. CPQ benefits extend beyond simple automation. This digital tool transforms product bundling and helps you build a winning sales team. 

With CPQ software, you can wave goodbye to the endless back-and-forth of product configuration emails. It guides customers through their options with precision, ensuring that every component fits perfectly. 

Keep reading to find out more about CPQ benefits. You’ll discover how this modern tool can help sales teams in various industries boost efficiency and accelerate lead times to close deals faster.

What is CPQ?

CPQ stands for Configure, Price, Quote. It’s a software tool that helps companies sell complex products more easily by automating three key tasks. These tasks include setting up products based on what each customer needs, determining the right price, and creating detailed sales quotes. This means businesses can quickly respond to customer requests with accurate information, no matter how complex the product or pricing might be.

cpq software dashboard on computer screen

At its core, CPQ simplifies how sales teams work. It takes care of the tricky details like matching product options to the correct prices and rules. This cuts down on mistakes but also speeds up the quote-to-cash process. CPQ also works well with other business systems, like those for customer management and resource planning, ensuring that everything from customer data to sales details is aligned and up-to-date.

Which businesses can benefit from CPQ?

CPQ software is especially effective for businesses dealing with complex product and service configurations, multi-level customization, and variable pricing. 

It simplifies and automates the sales cycle. Sales teams can generate accurate and timely quotes without manual calculations, minimizing errors and speeding up response times to customer inquiries. Many market leaders recognize that providing a smooth online buying experience, even when selling customizable products to B2B customers, is what gives a competitive advantage.

Moreover, CPQ platforms excel in environments where products require detailed specifications and tailoring. They allow for the dynamic configuration of products, helping sales teams to tailor offerings to individual customer needs while adhering to industry standards, pricing guidelines, and profit margins. 

Companies in many sectors utilize CPQ to handle their intricate product lines. For instance, a car manufacturer might use CPQ to allow customers to customize vehicle features from exterior color to engine types and accessories.

Top CPQ capabilities

CPQ platform is packed with features that make selling complex products simpler and more efficient. Here are some of the top functionalities that make this tool essential for modern businesses:

  • Configure: The product configurator module within CPQ makes it easy to customize products to meet customer needs. Users can play with the features while the system handles it all smoothly. It ensures every product fits perfectly with the customer’s request and the set configuration rules. Additionally, CPQ guided selling feature helps sales reps, and customers walk through each customization step with clear instructions, ensuring optimal product configurations.
  • Price: With CPQ, you don’t have to worry about pricing errors. The software automatically calculates the correct price based on the product configurations and any customizations, ensuring customers always get a fair and accurate price. CPQ also supports upselling and cross-selling by recommending higher value or complementary products during the pricing process.
  • Quote: Once the product setup and pricing are determined, the soft quickly creates a detailed and professional quote. This document includes everything the customer needs to know, from the breakdown of costs to the final total, applicable discounts, all presented clearly and concisely. The software also automatically generates sales and production documents.
cpq process flow vizualization

CPQ is a powerful pre-sales and sales tool. With these capabilities, it can help your business operate more efficiently, ensuring customers receive the best possible service.

14 Key benefits of CPQ software

CPQ advantages free up your sales team to focus more on engaging with customers and less on administrative tasks. Rather than sifting through piles of Excel spreadsheets, they can rely on automated, instant quoting tools that streamline the major part of the sales process. 

📢 Also read: Excel vs CPQ Quoting Software. How To Close Deals Faster if You Sell Complex Products?

Here are other CPQ pros that make a big difference across all industries:

1. Handles any customization

No matter how complex or custom the order, CPQ can be designed to handle it. This flexibility allows your businesses to meet diverse customer needs without compromising on speed or accuracy.

2. Accurate pricing

CPQ automatically performs all the calculations, ensuring that each quote is precise. This eliminates pricing errors, helps avoid confusion, and builds trust with your customers.

3. Faster quotes

CPQ helps speed up the entire sales pipeline. From configuring products to generating accurate quotes, everything moves faster. In fact, as revealed during a recent ICW, using a configurator cuts down the time needed to make a quote from 2-3 hours to just 15-30 minutes. This means your sales team can handle more customers and close deals quicker.

4. Improved customer experience

With CPQ, your customers get quick, personalized responses. They see that your business values their time and needs. Features like 3D visualizations of orders and personalized, self-service approaches adapt seamlessly to customer preferences, significantly boosting satisfaction and loyalty.

5. Streamlined operations

CPQ integrates with your existing CRM and ERP systems, pulling all customer and business data into one place. This helps keep everything organized and reduces manual work, making your operations smoother.

6. Enables seamless eCommerce experience

CPQ technology can be embedded directly into your e-commerce platform. This way, it enables a self-service shopping experience that allows customers to customize and purchase products with no intervention from your sales staff.

7. Scalability

As your business grows, your sales processes become more complex. A strategically-designed CPQ software grows with you, easily handling more products and more complex deals without missing a beat.

8. Reliable compliance management

CPQ ensures that every quote and transaction complies with your pricing rules, discount policies, and terms of sale. This is crucial for maintaining your company’s standards and meeting regulatory requirements.

9. Minimized quoting time

CPQ dramatically reduces the time it takes to generate quotes and proposals. Automated processes ensure that complex quotes are prepared and delivered in a fraction of the traditional time.

10. Standardized sales processes

CPQ software standardizes quoting and sales processes across the organization. It ensures consistency and accuracy while simplifying management and oversight.

11. Protected deal margin

Automated pricing and discounting rules protect your deal margins from human error or unauthorized changes, ensuring profitability on each sale.

12. Increased sales and customer value

CPQ software boosts cross-selling by recommending complementary products based on customer choices in the product bundling process. Additionally, it can suggest higher-value add-ons during the product building process. This ensures salespersons can effectively increase deal size and provide customers with more comprehensive solutions.

13. Reduced training time

The software simplifies the sales process with guided selling and predefined configurations, which reduces the amount of training new sales staff need to become effective.

14. Fast ROI

By streamlining the sales cycle, reducing errors, and boosting productivity, CPQ delivers a fast ROI (return on investment). You’ll be able to see improvements in efficiency and profitability almost immediately after implementation.

configure, price,quote system benefits list

📢 Read also: Product Configurator Benefits and ROI: Is It Worth the Investment?

Industry-specific benefits of the CPQ solution

Every industry has its own unique requirements and challenges. A custom-developed CPQ solution is flexible enough to address these diverse needs. It ensures tailored configurations, accurate pricing, and efficient CPQ quoting processes for any sector. 

Here’s what CPQ can do for your industry:

Manufacturing

In the manufacturing industry, an industrial equipment manufacturing CPQ is an essential tool for visualizing and managing extensive product catalogs online. It simplifies the customization of products for clients and ensures seamless integration between sales, engineering, and production departments.

Moreover, this system promotes an agile manufacturing process. It enables configure-to-order and made-to-order processes, allowing companies to adjust product components dynamically in response to customer preferences or supply chain changes.

Additionally, a custom CPQ for manufacturing allows for providing distributors with a customized version of the tool. This helps smooth the sales process and enhance the effectiveness of distributors. 

The software ensures that all necessary documents, like manufacturing quotes, sales orders, and bills of materials (BOMs), are automatically created and accurate. Manufacturers avoid the risk of costly errors and speed up the product’s time to market.

cpq projects statictics in manufacturing sector

“Based on our experience in CPQ projects for manufacturers, users have experienced up to a 75% reduction in the time required to respond to customer quotes. This greatly accelerates the sales process and enhances overall efficiency.”

📢 Further reading: Optimizing Production – The Role of CPQ for Manufacturing Efficiency

Automotive

Car dealers can use Configure-Price-Quote software to enable easy customization of vehicles efficiently. From selecting engine types to choosing accessory packages, CPQ ensures that every customer’s specifications are precisely met within the manufacturer’s range. 

With this online tool, the car buying experience becomes much more straightforward, personalized, and enjoyable. With 71% of consumers expecting personalized interactions and 76% frustrated when this isn’t met, CPQ plays a crucial role in meeting these expectations.

Additionally, CPQ supports upselling opportunities by suggesting compatible upgrades during the configuration process. It also generates accurate production documents like parts lists and assembly instructions, which speeds up manufacturing and reduces errors, further optimizing the production cycle.

The system also optimizes inventory management and production planning, thereby minimizing waste and inefficiency. 

cpq project statistics in automotive industry

“Based on our experience in the automotive industry, up to 82% of end customers use self-service product configurations with CPQ capabilities to configure and quote cars before making a purchase”

Telecommunications

Telecommunications companies use CPQ to manage the complexity of bundled offerings and service contracts expertly. The telecom CPQ makes it easier to customize packages that combine various services. This capability is essential in product service bundling, where CPQ ensures that combinations are attractive while complying with all regulatory requirements. 

Moreover, it speeds up the process of turning CPQ quotes into signed contracts. In competitive industries such as telecommunications, this feature is critical for retaining customers. The tool also ensures the accuracy of these complex packages and streamlines the approval process, cutting down the time it takes to close deals. 

Healthcare

In healthcare, CPQ supports the configuration of complex medical equipment and supplies, ensuring compliance with stringent regulatory standards. Medical manufacturing CPQ enables providers to tailor solutions to the specific needs of healthcare facilities. At the same time, the software maintains accuracy in medical device pricing and contracts. This leads to improved operational efficiency and better patient care outcomes.

The software also smooths the purchasing process, offering a quick and easy-to-follow online experience that saves time and increases satisfaction for B2B customers.

High-Tech

High-tech manufacturing companies benefit from CPQ software as it adeptly handles sophisticated product configurations and rapidly changing tech specifications. This capability is crucial in an industry that constantly evolves. It helps companies adapt their offerings quickly to meet market demands. 

CPQ supports scalable solutions for global markets, ensuring that sales teams can offer precise and up-to-date information to customers. This improves the buyer experience and streamlines sales cycles. As a result, companies benefit from quicker transactions and increased sales efficiency.

Construction

CPQ in construction helps companies quote large projects more accurately by accounting for various variables such as materials, labor, and timelines. This capability is crucial for maintaining profit margins and meeting project specifications. 

Additionally, CPQ enhances client relationships by generating clear, detailed proposals. These documents provide transparency, and help avoid disputes and misunderstandings, ensuring smoother project execution and client satisfaction.

Retail

Retailers use the Configure, Price, Quote software to dynamically personalize products and manage seasonal variations effectively. The tool is invaluable for creating tailored product bundles and special offers that resonate with individual customer preferences.

Additionally, CPQ can be seamlessly integrated with eCommerce platforms, ensuring customers experience all your products–standard and customizable–in one online platform. This streamlined CPQ eCommerce approach keeps the shopping process simple and engaging, helping to prevent customer drop-offs and lost sales. It also ensures consistent pricing and promotion across all digital channels. 

Cpq in Ecommerce and Retail sector statistics

“Based on our projects and experience with the retail and eCommerce industries, up to 70% of highly customized products and systems are configured using an online CPQ configurator, eliminating the need for sales representatives”

Service businesses

Service businesses, particularly in sectors like finance and insurance, can use CPQs to customize service agreements and efficiently manage renewals. This tool ensures that all terms of agreements are precise and fully compliant with both company policies and industry regulations. This feature is crucial for maintaining customer trust and minimizing legal risks. 

For example, insurance CPQ digital tool enables effective product service bundling, allowing your businesses to offer customized combinations of services that meet your client’s specific needs. It makes insurance quoting and buying much easier, incorporating streamlined insurance pricing that ensures competitiveness and accuracy. It also improves the overall value offered to clients, helping to strengthen long-term relationships.

Signs your organization needs CPQ software

Manual quote creation is prone to errors, especially with complex product offerings. If inaccuracies in quotes happen all the time, CPQ can eliminate these by automating the configuration and pricing processes. 

Additionally, if your sales team spends excessive time generating quotes and getting approvals, CPQ can reduce these timelines dramatically, allowing for quicker turnarounds and more deals closed. 

If you offer customizable products or an extensive range of product options, you’ll benefit from introducing CPQ. The system manages these complexities efficiently, ensuring that every customer requirement is met accurately.

Another sign that you need an upgrade is difficulty in managing complex pricing and discount strategies. If maintaining up-to-date pricing across various channels and calculating discounts correctly is challenging, CPQ technology can manage and automate these aspects for your sales team reliably.

It’s a common issue, especially for big companies, that sales practices vary significantly among team members. This can lead to inconsistent customer experiences. CPQ tools can standardize procedures and ensure that all sales personnel follow the same successful sales process and pricing strategies.

Also, if you’re planning on expanding your product range or hitting new, international markets, then implementing CPQ can help you adapt quickly and efficiently. 

If these signs resonate with your current operations, it’s a good time to consider how CPQ can transform your sales process.

explanation how cpq fits to any industry

Case studies and success stories

Success stories speak volumes. Here’s a selection of companies we’ve helped to sell more, thanks to our custom-developed software, including CPQ. For deeper insights into these successes and more, visit the Case Studies page on our website.

Embedded CPQ for Adsystem

Adsystem is soon to revolutionize its sales process by launching a custom-developed embedded CPQ solution. This powerful tool enables customers to effortlessly configure, price, and purchase customizable solutions for exhibitions directly on Adsystem’s online platform. The addition of a 3D product configurator with AR preview promises to boost customer engagement and sales even further, allowing for a seamless and interactive shopping experience.

Advanced Car Configure, Price & Quote online tool

For a well-known car brand, the introduction of an advanced CPQ marked a significant enhancement in how they engage customers and finalize sales. Our custom-developed tool allows customers to visualize and configure their car choices interactively, down to the smallest detail. 

The online application has streamlined the buying process and significantly increased customer satisfaction by providing a transparent and engaging car selection experience. Additionally, our car builder tool has opened new opportunities for up-selling and cross-selling. The sales of car accessories have hiked up, resulting in a substantial boost in this revenue stream.

Custom CPQ implementation for a top HVAC systems supplier

A leader in high-performance HVAC systems, it has significantly enhanced its sales and production processes with our custom-configured CPQ solution. Designed to handle complex product lines with myriad components and configurations, the CPQ system ensures precise, industry-compliant customizations. By automating the entire sales cycle, the company now enables its customers to purchase highly customized solutions for heating and cooling systems directly through an integrated digital platform. 

This strategic upgrade has significantly structurized the sales process. Additionally, our app increased efficiency and customer satisfaction by ensuring that all configurations are precise and compliant with industry standards. As a result, our Client has observed a dramatic shift in order processing, with a marked increase in orders being handled online.

Choosing the right CPQ solution

With numerous CPQ software options available on the market, it’s crucial to choose a product that best suits your business needs. You’ll likely discover during your research that many CPQ solutions come with a variety of standard features and are advertised as ready to deploy. 

While these might suffice for general business requirements, they often fall short if you need specialized product configuration rules, advanced performance calculations, or flexible workflows and designs. Furthermore, an off-the-shelf solution typically requires significant implementation work by skilled CPQ software providers to fit your environment, increasing the overall investment cost.

On the other hand, a reliable CPQ software company can give you a custom-made CPQ sales tool precisely tailored to your company’s specific processes and needs. Designed to integrate seamlessly with your existing business systems, custom solutions tackle unique operational challenges and adapt to complex product configurations and pricing strategies. 

While custom solutions require a larger initial investment, they often result in greater efficiency and higher returns in the long run due to their precise alignment with business goals.

📢 Further reading: Bespoke vs. Off-the-Shelf CPQ? Comparing Quoting Software for Manufacturing

Discover what’s possible for your business

With CPQ, sales teams spend less time on paperwork and more time selling, which makes the whole business run smoother. These systems are designed to simplify the sales process and improve customer satisfaction by providing quicker, better, and more reliable sales service.

The digital shift can boost productivity and empower your team to innovate and drive business growth. 

As you consider the potential of CPQ software for your enterprise, think about the long-term benefits it could bring. Increased sales, improved customer retention, and the ability to scale operations seamlessly are just the beginning. Discover what CPQ can do for you, and take the first step towards a more dynamic and successful future.