In this article, you will learn why Excel is insufficient to quote advanced manufacturing products. You will also discover the CPQ tool and why Configure, Price, Quote software may be better than a spreadsheet application like Microsoft Excel to manage advanced product quoting processes.

Can Excel be an efficient CPQ tool?

You can manage your quote creation in Excel, but in 2023 there are more effective ways to do that.

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

How hard is it to share updated Excel files 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 quotations. However, more complex pricing models and large-scale industrial systems need a more comprehensive solution.

As a growing business, your search for solutions that make your business processes more efficient. So why managing large quotes in Excel is inefficient?

  1. Advanced pricing models are unavailable. Excel only covers basic pricing formulas and calculations. Therefore, it is hard to navigate attribute-based pricing, seasonal offerings, quantity-based pricing, and discount calculations.
  2. Lack of external data. Excel can only manage internal data inserted manually. There is a lack of archive of previous pricing models. That is why you can operate only in the current pricing system and can’t track changes. You may end up with hundreds of Excel sheets with different price versions and updates.
  3. Prone to mistakes. Inserting data manually leads to errors. Gathering data by one person exceeds the probability of making a mistake. Creating complex quotes requires manual work. This includes summarizing data from files, emails, storage, or the cloud. Above all, even a simple typo can cost you time spent on double-checking and finding an error.
  4. Limited database. Entering a massive amount of data into a spreadsheet slows down the program. Dividing it into smaller files leads to chaos. Comparing data and finding an error 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.
  5. It’s not an intuitive and user-friendly tool. If a new salesperson joins the team, it is difficult for him to operate advanced Excel sheets, find multiple quote formulas and navigate complex price configurations. Onboarding takes a lot of time, after all.
  6. Safety issues. Data can be easily stolen from an Excel sheet because it is not secured. It’s incompatible with other business systems, and you have no control over the changes. There is no history of the previous version of the file and notification of who edited it. So anyone can change pricing models, formulas, or data.
  7. Lack of collaboration capabilities. Excel doesn’t allow multiple employees to collaborate and contribute at different stages of the quotation process without creating conflicts. On the other hand, you can collaborate simultaneously in the online version of Excel. However, there may be problems saving work.

Therefore, an excel sheet cannot be a pricing tool for complex product quoting.  As a growing business, you’re looking for solutions that make your business processes more efficient. One of them is CPQ (Configure, Price, Quote) software.

What is CPQ software?

CPQ stands for Configure, Price, and Quote. It’s software that allows creating, customizing, and automatically generating offers for the products offered by the company. This is a sales tool that is designed to support sales departments by presenting quotes and sales offers to customers in a quick and reliable way.

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

(C) Configure

Based on requirements, find or configure the right product or service and get comprehensive information with possible extensions.

(P) Price

Calculate prices based on the configured product with extensions and accessories depending on the market.

(Q) Quote

Create and provide high-quality quotes with all customer information. You can make changes and process the quote in the ordering process.

CPQ system creates an automized process based on inserted data, such as configurations, customizations, promotions, and other values. In other words, It enables sales operations to automate and optimize the process of selecting or configuring the right product based on the requirements, up to pricing and creating quotes for B2C and B2B clients.

Configure, price, and quote system can serve as both an internal and external guided selling tool. Firstly, customers can independently select the right product from the catalog. After that, configure it according to their needs and immediately see the price.  For example, look at an intuitive CPQ tool we created for Suzuki company.

Common CPQ software features

Product or service configurator

Configure, Price, and Quote software includes tools for configuring products or services to meet customers’ specific needs. It may include selecting options, customizing features, and adding additional components or accessories.

Pricing calculation

Due to different business rules for discounting, most companies maintain multiple price lists based on location, quantity, or channel, complicating the pricing process. With CPQ, sales teams can quickly calculate prices based on the selected configurations, implement price control, eliminating pricing errors and thus not losing revenue or customers. In addition, quickly delivering high-quality quotations increases the probability of closing the deal.

Quotation or proposal creation.

With the CPQ tool sales team can quickly generate error-free, high-quality quotations. The ready proposal includes all relevant product or service information, including pricing, terms, and additional details.

Knowledge transfer

When the product or service, process, and pricing policies are complex, the CPQ platform guides sales representatives and end-customer with adequate support at every step of the process.

Increased close rate

A quick and easy creation process of high-quality quotations can dramatically increase the probability of closing the deal fast. As a result, it leads to a higher close rate from the beginning.

Upselling and cross-selling

During the process, based on rules or constraints, customers can be guided not only on how to choose options of the base of the product or service but can also be driven to choose add-ons and create more revenue and a higher margin.

CPQ software advantages over traditional pricing in Excel

Accuracy. CPQ software helps to reduce errors and improve the accuracy of quotes. This is done by automating the calculation of prices and ensuring that all relevant information is in the proposal.

Speed. CPQ software streamlines creating and sending quotes. It allows sales teams to generate proposals more swiftly.

Customization. CPQ software can be tailored to a business’s specific needs and processes. So that, It allows for more flexible and customizable quotes and proposals.

Integration. CPQ software can be integrated with other systems, such as CRM or accounting software. Which will lead to a more effective sales process.

Reporting and analytics. CPQ software can provide valuable insights into customer preferences and purchasing behavior. Thus, It can help sales teams to tailor their proposals effectively and win more deals.

CPQ workflow for complex products

Standard solutions are not enough for advanced or complex 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 applications that, during the sales process, are used to compose the final document provided to the customer.

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

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

Firstly, the typical outcome from this process is comprehensive product cards and technical data sheets (TDS). Secondly, quotations can contain not only basic information like an item number, SKU, EAN, description, images, drawings, technical parameters, or attributes but the complete information about the product. In many cases, calculations results or Bill of Materials (BOM) for production purposes.

Custom VS Off-the-shelf CPQ software

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

For this reason, it is better to consider a tailor-made solution. A customized CPQ solution can be tailored to your business needs and developed based on your company’s domain knowledge.

Key takeaways

What you need the most in your business is a satisfied customer. CPQ provides 100% reliable quotes generated for every new query with high accuracy. Moreover, the software provides a more comprehensive and automated solution for creating and sending quotes and proposals than Excel, which can be time-consuming and error-prone.

Customers’ loyalty grows If cooperation with you goes smoothly and you’re able to provide high-quality services. In short, professional-looking quotes are what your customers expect from you.

To sum up, these are the benefits your sales team will get from using CPQ software:

  • Minimalizing the amount of handwork with price configuration
  • Sales support and assistance through knowledge transfer encapsulated in software
  • Capacity for Engineer to Order calculations
  • Configuring product, pricing, and quoting in one application 
  • Managing complex product information in one central system 
  • Efficient quotation workflow
  • Support for many markets, languages, and different channels