Anastasiya Bulykina
Anastasiya Bulykina
B2B Marketing Manager
December 2023, 12 min. read

Have you ever tried using Microsoft Excel to quote advanced manufacturing products, only to find that it isn’t up to the task? Well, fear not! This article will introduce you to the Configure, Price, Quote (CPQ) software. We’ll explain why this quoting system is superior to spreadsheets like Excel when it comes to managing complex quoting processes involved in advanced manufacturing. 

Can an Excel template be an efficient quoting tool?

You can manage your quote creation process in Excel, but in 2024, there are more effective ways to do this.

Depending on the product information type (simple or complex), setting up a pricing model in a spreadsheet could be challenging for sales teams. Complex products require more pricing formulas, components, options, or accessories configuration. Very often, sales reps handle this process with complicated Excel sheets.

How hard is it to update these files and share them through the whole network of internal or external users? You probably know it.

The standard spreadsheet calculator or pricing engine might be enough to generate simple quotes. However, more complex pricing engines and large-scale industrial systems need a more comprehensive proposal software solution.

As a growing business, you probably search for sales automation solutions that make your business processes more efficient. So why is managing extensive quotes in spreadsheets inefficient?

Here are a few important reasons.

No way to inject advanced pricing models

Excel covers only basic formulas and calculations. Therefore, it’s hard to navigate attribute-based pricing, seasonal offerings, quantity-based pricing, discount calculations, etc.

Lack of external data

Excel can only manage internal data inserted manually. There are no archives of previous pricing models. That’s why you can operate only in the current pricing system and can’t track your changes. As a result, you may end up with hundreds of Excel sheets with different price versions and updates.

Prone to mistakes

Creating complex quotes requires manual work. Unverified data entry is usually about 96% accurate, but even this small margin of error can cause problems. For example, if one field out of 25 is filled out wrong, it might seem minor. However, that one mistake can make the whole document wrong, leading to false calculations, financial discrepancies, and client trust issues.

Limited database

Entering a massive amount of data into a spreadsheet slows down basic programs like Excel. Dividing it into smaller files leads to chaos. Additionally, comparing data and finding errors is tricky. You can only track file changes by losing the program’s effectiveness. Moreover, there is a risk of losing direct access to the location of files due to accidental overwriting or deletion of backups.

It’s hardly an intuitive or user-friendly tool

If a new salesperson joins the team, operating intricate spreadsheets, finding multiple quote formulas, and navigating complex price configurations can be difficult. Onboarding takes a lot of time, after all. Moreover, without a standardized system, each salesperson might create their own version of quoting documents, leading to inconsistencies and potential errors.

Safety issues

Data from Excel sheets can be easily stolen as they lack security. They also don’t work well with other business systems, and controlling changes is difficult. Without a history of past versions or notification about who made edits, anyone could alter prices, formulas, or data.

Lack of collaboration capabilities

Excel doesn’t allow multiple employees to collaborate and contribute at different stages of the quotation process without creating conflicts. While you can work together in the online version, it’s still not perfect for complex tasks that require careful coordination.

As you can tell, spreadsheets are not the best tools for complex product quoting. Many businesses are switching to CPQ software, a modern solution that can streamline your quoting process.

Let’s dive into what this tool is and how it can benefit your business.

What is a CPQ tool?

Excel vs. CPQ Software shown difference

The CPQ term stands for Configure, Price, Quote. It’s a software solution that supports sales departments by quickly creating professional quotes and sales offers to customers. Your sales reps can easily create branded quotes for each customer with the right pricing and product options offered by the company. 

The main goal behind this quote builder is to automate the sales process for advanced products or services. The platform accelerates prepping and processing orders from multiple markets and channels, minimizes manual work (e.g., work with spreadsheets), and eliminates human errors. Additionally, the offers standardization allows for faster delivery of the necessary information such as prices, detailed technical documentation, and advanced calculation results.

📢 Learn more from our dedicated article: What is CPQ Software?

This solution is based on the following three modules:

(C) Configure

Here, users can find or configure the right products and services based on requirements and get comprehensive information with possible extensions. Product configuration involves defining the various features and options that can be selected for a product and any dependencies or constraints between those features and options.

(P) Price

Depending on the market, the system calculates prices based on the configured product with extensions and accessories. For complex products that consist of many components, accurately calculating the final production price is not straightforward. However, the system can ensure consistency and transparency in pricing, reliably integrating both catalog prices and production costs into the final amount.

(Q) Quote

This module creates and delivers error-free quotes for your customers. Once your sales technician chooses the product configuration for a potential customer, the app automatically generates a final sales quote based on configured product data and pricing rules. Additionally, the quoting system considers discounts, promotions, special payment and delivery terms, and any other factors affecting the final price.

The CPQ system automates the quote creation process using data like product configurations, customizations, and price promotions. Essentially, this software helps your sales staff automatically choose and price the right product based on customer needs and then generate personalized quotes for your B2C or B2B customers.

Top sales quote software features

The Configure, Price, and Quote system can serve as an internal and external guided selling tool. Customers can independently browse your product catalog, select items that fits their needs, customize them as required, and instantly view the updated price. This functionality makes CPQ systems invaluable for enhancing customer interaction and sales efficiency.

list of key cpq features

Here are other key features that make this software essential for modern sales teams:

Streamlined product or service configurations

Configure, Price, and Quote software includes tools for personalizing systems, products, and services to meet customers’ needs. It may involve selecting options, features, and adding additional components or accessories. Visualization is a critical component of Configure, Price, Quote (CPQ) software. It’s often the software’s most visible and interactive part, allowing users to see a visual representation of the product they are building, including 3D models.

📢 Learn more: 2D vs 3D Product Configurator: What to Choose for Your Product Customization?

Automated quoting process

The CPQ tool is a robust online quote configurator designed to quickly and accurately generate high-quality proposals. As a cloud-based quoting solution, it ensures that all relevant product or service details are up-to-date and accessible 24/7 from anywhere, supporting on-the-go business needs. This automation minimizes errors and improves the overall quality of your proposals, making it easier to meet customer needs effectively.

Accurate pricing calculations

Due to different pricing rules for discounting, most companies maintain multiple price lists based on location, quantity, or channel, complicating the pricing process. The quoting software solution helps quickly calculate prices based on the selected configurations, implement price control, eliminating errors and thus not losing revenue or customers. 

Integrated proposal or quote templates

With CPQ, you get custom-developed integrated templates that streamline the creation of your proposals and quotes, ensuring consistency and professionalism across all documents. These templates allow you to quickly produce high-quality quotations, which can significantly boost your chances of closing deals. By standardizing the format and content, the tool also helps reduce the time spent on each quote, allowing sales reps to focus more on selling and less on administrative tasks.

Knowledge transfer

When the manufacturing process and pricing policies are complex, the platform guides users with adequate support at every step. It ensures that all parties have the necessary information and guidance to make informed decisions. Additionally, this guided selling feature helps new sales team members quickly operate through product details and pricing strategies, speeding up their training and integration into the team.

Increased close deals rate

Creating high-quality quotes quickly and easily can greatly increase your chances of sealing deals faster, leading to more sales right from the start. One case study, presented at the annual Workshop on Configuration, showed that using a configurator cut down the time needed to make a quote from 2-3 hours to just 15-30 minutes, significantly speeding up the process. This fast preparation allows quotes to be made right during customer meetings, reducing misunderstandings and possibly increasing sales since adjustments and feedback can be handled immediately.

Upselling and cross-selling opportunities

Upselling and cross-selling are easier with a CPQ system, which automatically suggests higher-end product features or additional functionalities during the configuration process. It also recommends complementary products or bundled packages, enhancing the overall value of the customer’s initial purchase. This approach fulfills more of the customer’s needs and boosts the possible earnings from each sale.

Comparison table: Excel Sheets vs. Configure, Price and Quote (CPQ) Software

AspectExcel SheetsCPQ Software
User InterfaceBasic spreadsheet interfaceUser-friendly and intuitive interface
Data ManagementManual data entry; prone to errorsAutomated data capture; high data integrity
Complex Pricing HandlingLimited; requires manual updatesHighly capable; supports dynamic pricing
CustomizationLimited customization optionsExtensive customization and scalability
IntegrationMinimal; requires manual effortSeamless integration with other systems
Speed and EfficiencyTime-consuming for complex tasksFast processing of complex configurations
AccessibilityTypically local or via shared drivesCloud-based, accessible from anywhere
CollaborationLimited real-time collaboration capabilitiesEnhanced collaboration features
Error HandlingHigh risk of human errorAutomated error checks and validations
Reporting and AnalyticsBasic; relies on manual compilationAdvanced; real-time analytics and reporting
CostGenerally low upfront costHigher upfront cost but more cost-effective in the long run
Comparative Analysis of Managing Complex Pricing and Quoting: Excel Sheets vs. Advanced CPQ Software

CPQ software advantages over traditional pricing in Excel

Accuracy. The software reduces errors and improves the accuracy of quotes. This is done by automating the calculation of prices and ensuring that all relevant information is in the proposal.

Speed. It streamlines creating and sending quotes. As a result, sales teams generate proposals more swiftly.

Customization. A custom-developed CPQ can be tailored to a business’s specific needs and processes. That’s why using modern tools allows for more flexible and customizable quotes and proposals.

Integration. You can have it integrated with other systems like ERP and CRM systems. Consequently, all product, pricing, and customer information is consistent and up-to-date across all systems.

Reporting and analytics. It can provide valuable insights into customer preferences and purchasing behavior. Thus, the software helps sales reps tailor their proposals effectively and win more deals.

data vizualization of how cpq systems are more advanced than excel sheets

CPQ sets sales quote workflow for complex products

Standard solutions are insufficient for advanced products and systems where physical or mathematical calculations are required to select products and provide comprehensive data sheets. Typically, those processes are supported by experienced sales engineers or several separate applications that are used during the sales process to compose the final document provided to the customer.

To increase efficiency, reduce mistakes, and, most importantly, secure the scaling up of the sales pipeline, organizations and sales departments introduce integrated custom solutions as web-based applications.

To sell more advanced products, sets, or systems online, you need a solution where the engineering knowledge can be transferred, and users can be guided through the whole sales funnel.

The typical outcome from this process is a comprehensive product card and technical data sheet (TDS). The quotations contain basic information like an item number, SKU, EAN, description, images, drawings, technical parameters, or attributes, as well as complete information about the product. In many cases, you get calculation results or a Bill of Materials (BOM) for production purposes.

Replacing Excel with a dedicated CPQ quoting system

Offering customized products to customers requires a wide range of product features and configuration options, as well as the ability to provide offers in a short time. Usually, Commercial Off-The-Shelf (COTS) solutions, like Salesforce, don’t cover all the needs of companies with advanced product portfolios. Like any software, it has its own set of limitations and potential drawbacks.

In some cases, it’s better to consider a tailor-made solution. A bespoke CPQ solution can be tailored to your business needs and developed based on your company’s domain knowledge. 

Although this custom approach may require more upfront investment, it often delivers better ROI (Return on Investment) by precisely matching your specific requirements. Working with experts to develop this solution ensures that it’s optimized for your business processes and can adapt to future needs, maximizing its effectiveness and long-term value.

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

Key takeaways

Professional-looking quotes are what the customers expect from your sales team. The best quoting software automates quote generation, allowing you to deliver professional-looking quotes quickly, keeping your customers happy.

Manual quote creation is time-consuming and prone to errors. Quoting software ensures accurate pricing and product configurations, giving you and your customers confidence in the quote. It streamlines the entire quoting process, freeing up your sales team to focus on building relationships and closing deals.

By implementing this solution, you can:

  • Increase sales by delivering faster, more accurate quotes
  • Reduce costs associated with manual quote creation
  • Improve customer satisfaction with a smoother buying experience
  • Gain a competitive edge by offering a streamlined sales process

Consider CPQ software with a customer self-service portal. This allows customers to build their own quotes and see pricing changes in real time, increasing their buying confidence. With software handling the heavy lifting, your sales team can concentrate on providing exceptional customer service.

Tailor-developed CPQ is our signature software, expertly designed to optimize your sales workflow and enhance customer interaction. Contact Right Information today to ensure that every quote is delivered with precision and professionalism.