Sending quotes is an integral part of the quote-to-cash process. If you sell complex products or services, you need a solution that delivers those quotes to prospective customers fast and without errors.
Enter CPQ software. This digital solution integrates key sales functions – from tailoring product configurations to suit specific customer needs to setting dynamic pricing and generating accurate quotes with remarkable speed.
Keep reading as we unfold the layers of CPQ, revealing its impact and why it might just be the missing piece in your sales puzzle.
What is CPQ software?
CPQ meaning Configure, Price, Quote, is software that helps sales reps and internal sales teams quickly and accurately generate quotes for orders. The CPQ software is rules-based and offers endless customization features to address multiple variables that affect the end product price. In simple words, with this software, you can handle complex product configurations and pricing models with ease.
CPQ software is extremely helpful for businesses that sell products made to order or customized just for the customer. It ensures that all the pricing is correct and follows the rules. CPQ software is often an add-on to CRM platforms. It can integrate seamlessly with other business systems such as ERP, accounting, or eCommerce platforms. Having all your systems in sync ensures all your product information is accurate and the sales process runs smoothly and reliably.
One of the standout features of CPQ software is its visual interface. Thanks to the product configurator feature, users can easily click and choose different options and see their choices updated right away. This helps get the order right and lets customers see and play around with their custom product as they build it. Some tools even offer advanced 3D visualizations, and with the evolving technology, there’s potential for integration with Virtual Reality (VR) and Augmented Reality (AR) for an even more immersive experience.
How does CPQ software work?
On average, sales reps spend 64% of their time on non-selling activities. CPQ automates the beginning phases of the sales process: configuring, pricing, and quoting.
Let’s assume a customer is looking for a high-end, custom-built outdoor booth for events and exhibitions. They have specific needs like robust materials, a unique design, and additional features such as security locks and brandable elements. Here’s how CPQ software helps a sales rep create the perfect booth for this customer quickly and without mistakes.
The sales rep uses CPQ to start creating the booth. The software displays all available sizes and options, guiding the rep through choices like material types, size, design themes, number of windows, and any additional features available. It follows a set process, ensuring no key aspect is missed. During this stage, CPQ also suggests enhancements like electrical installations, efficient lighting, and security shutters, offering upsell opportunities and enhancing the booth’s functionality.
While the booth is being configured, the software calculates the price in real-time. It evaluates the cost of each chosen element – from the basic structure to the extra features and adds them up. The software also checks if there are any discounts or special offers that apply. For example, there may be a seasonal promotion on specific materials or designs or a discount for a returning customer. CPQ automatically applies these discounts, ensuring the customer gets the best deal, and the price is always right.
Finally, the software creates a quote for the customer. This quote lists each element of the booth, from the basic structure to the specialized features, along with their individual costs and the total price. It’s clear, detailed, and easy to understand. The customer can see exactly what they’re getting and how much it costs. The best part? This quote is ready in just a few minutes, much faster than if it were done by hand from a spreadsheet.
Here’s more about the comparison of using CPQ software vs Excel.
Benefits of CPQ software
CPQ offers a great deal of benefits. With as many as 86% of customers willing to abandon a brand after just two bad experiences, it’s all-important that your sales process is perfect every time. CPQ automates it, making it more effective and efficient. Here’s how:
- Custom orders made easy: CPQ handles all the custom options without any fuss.
- Speed: CPQ software speeds up the whole process of creating quotes. You get accurate quotes out to customers way faster than doing it the old-fashioned way.
- Increased sales: It makes your sales team’s work smoother and more efficient. They spend less time on paperwork and more time selling.
- Accuracy and fewer mistakes: With CPQ software, you’re less likely to have errors in your quotes, which means happier customers and fewer headaches.
- Fair and flexible pricing: The CPQ system does the math on pricing, considering things like discounts and special deals, so you always get the price right.
- Better customer experience: Customers love how quick and clear the whole process is, which makes them more likely to recommend your brand and come back.
- Easier upselling: With a digital quoting system, offering customers rule-based sales recommendations is a breeze, helping you boost your sales by suggesting upgrades or add-ons that they might like.
- Reduces training time: It’s easy to use, so your team can get the hang of it quickly.
- Visualizations: The software often includes visual tools that show customers exactly what their custom order will look like so they can make confident choices.
- More consistent approach: CPQ software standardizes your quoting process, ensuring consistency across all customer interactions.
- Valuable insights: It gives you helpful info and insights about your sales and customers, which can guide your business decisions.
- Grows with your business: As your business grows, CPQ software handles more products and complex sales easily.
Further reading: Guide to Sales Automation Software: Streamlining Your Sales Process
Configure Price Quote for industries
The CPQ software meets the unique needs of various sectors, especially for businesses with multiple SKUs in their offerings. It simplifies variations through a guided question-and-answer process.
Here are some key industries and types of businesses that particularly benefit from implementing CPQ solutions:
In the manufacturing sector, where products often require complex configurations and customization, CPQ software significantly simplifies the process. It allows manufacturers to quickly and accurately produce quotes for products with varying specifications, materials, and performance requirements.
CPQ software allows HVAC companies to manage complex product configurations and pricing for their clients’ design projects. It simplifies the quoting process for custom HVAC systems, catering to various installation scenarios and specifications.
The automotive industry, especially in areas like parts manufacturing and distribution, finds CPQ invaluable for managing custom orders and complex pricing structures. Additionally, car configurator software greatly enhances the car-buying experience for direct customers, allowing for personalized configurations of vehicles right from model selection to feature customization.
In the insurance sector, CPQ software streamlines the creation of personalized insurance packages. It efficiently handles different policy options, coverage levels, and pricing models, making it easier to generate tailored insurance quotes that meet specific customer needs.
Finance and Banking
In this industry, CPQ can streamline the process of creating customized financial products and services. It efficiently manages various financial offerings like loan packages, investment plans, and banking services, ensuring accurate and compliant pricing. CPQ helps in tailoring these financial solutions to individual client needs, enabling faster and more precise service.
Retail and eCommerce
CPQ software empowers customers to configure products to their liking, choosing from various options and customizations. Additionally, retailers and eCommerce businesses can also provide personalized product bundles and promotions, impressing their customers with tailored shopping experiences that resonate with their individual preferences and needs.
In the telecom industry, CPQ software helps in bundling services, managing promotions, and offering personalized packages to customers, boosting sales efficiency and customer satisfaction.
Healthcare and Pharmaceuticals
CPQ can assist these industries in managing complex pricing structures for various drugs, treatments, and healthcare equipment, ensuring compliance with regulatory standards. It helps tailor medical solutions to individual patient needs and streamline the process of offering personalized healthcare services.
Energy and Utilities
With the right CPQ software, these sectors can easily manage pricing and quotes for varying service levels, contract lengths, and usage-based billing. This ensures more accurate and fair billing for customers, enhancing transparency in a sector where pricing can often be complex.
Construction and Engineering
CPQ software helps in quoting large-scale projects, managing material costs, and labor estimates, crucial in these industries. It also provides scalability in project planning, allowing for real-time adjustments as project scopes evolve.
High-Tech Equipment and Machinery
Businesses dealing with high-tech equipment can leverage CPQ to manage the sale of complex machinery with various configuration options. This enables a more efficient sales process, ensuring technical specifications meet client requirements precisely.
Choosing the right CPQ software for your business
If you want to get the most out of your new digital solution, you need to choose CPQ that perfectly suits your business needs. Start by mapping out your current sales process. Identify areas where you need improvement, like speeding up quote generation or handling complex pricing. This will help you understand the features you need most in a CPQ solution.
When you’re looking for a CPQ tool, consider how well it will work with the systems you already use, like your CRM or ERP. A good CPQ should fit smoothly into your existing setup. Look for one that’s customizable and flexible to match your unique business needs and one that’s easy for your team to use. This will cut down on training time and help your team get the most out of the software quickly.
Lastly, think about the cost and what you’ll get back from your investment. Look at the initial cost, but also consider extra expenses like integration and deployment. Your CPQ software should be up to date with technology trends and can adapt to future market changes. This will help you stay competitive and make sure your investment keeps paying off over time.
Customers in both business- and consumer-facing industries love having choices and being able to customize products just for them. The mix of user-friendly options, correct pricing, and instant quote creation makes Configure-Price-Quote software a key part of selling customized products today. This digital solution integrates configuration, pricing, and quoting into a single, streamlined process.
Technology keeps evolving, and businesses that don’t adapt risk falling behind and losing customers to more agile competitors. Our case studies page shows the transformative impact of custom-built digital solutions, like CPQ, across various industries.
So, if happy customers and faster sales cycles are what you want for your business, integrating custom-built smart CPQ configuration software should be your next investment.
Explore Right Information’s custom CPQ software solutions and reach out to our team of experts to find out what we can do for you today.
Frequently Asked Question:
What does CPQ stand for?CPQ stands for Configure, Price, Quote. It’s a type of software that helps businesses generate sales quotes for their products or services.
Is CPQ a CRM?No. While it often integrates with CRM (Customer Relationship Management) systems, CPQ is specifically focused on the pricing and quoting aspect of sales.
What is the CPQ process?
The CPQ process involves configuring a product to meet customer specifications, determining the price based on the configuration, and generating a detailed sales quote.
What are benefits of CPQ?CPQ benefits include increased sales efficiency, accuracy in pricing, quicker quote generation, and the ability to handle complex product configurations.
What does CPQ implementation look like?CPQ implementation involves integrating the software with your existing business systems, setting up product catalogs, defining pricing rules, and training the sales team to use the new system.
What is the best CPQ?
This depends on your specific business needs. When choosing the best solution for your company, consider integration capabilities, ease of use, customization options, scalability, and price to match your unique requirements.