What does CPQ mean?
CPQ, which stands for “Configure Price Quote,” is the process that salespeople use to set up goods, figure out how much they cost, and make a quote. The CPQ method makes it easier to quote for products that can be customized, and it is an integral part of the quote-to-cash process.
The parts of CPQ can be broken down into the following:
Setting up
CPQ makes it easy for sales reps to customize goods and services to meet customers’ needs by accurately recording what features or parts of the product are wanted. It also lets businesses say what customization options are available for each part, what parts must be bought together, what features can be combined, what parts must have items go with them, what accessories go with certain parts, and what options need more customization. Customers can get precisely what they want without putting all their needs and specifications by hand into a quote form or CRM system.
CPQ works with other programs, like ERP, CRM, financial systems, or eCommerce platforms, to ensure that the product data is correct when the quote is made.
The price
CPQ solutions let sales reps figure out prices based on the set product’s specs. Setting base prices for different parts or features of a product, as well as discounts and markups for different customer groups or product choices, is part of CPQ’s pricing process. For instance, businesses might discount large orders or raise the prices of specific features that customers want over other choices. Delivery fees, taxes, seller discounts, and special deals like “buy one, get one free” are other things that can change the price.
One benefit of CPQ is that it lets companies set their own price rules based on how they run their business. The software makes it easy to set prices for complicated pricing models like tiered, subscription, bulk, and bundled pricing. This removes the need for price spreadsheets and doing math by hand, and it ensures that quotes are always correct.
Companies can quickly change their pricing models with CPQ software by adding new markups or changing factors like discount amounts. This ensures that businesses can keep up with changes in the market and make price changes properly without having to change the price of each product individually every time the market changes.
Say It Again
In CPQ, a quote is a branded document that lists the goods and services sold, how much they cost, and any discounts or special deals that might be available. It also lists the payment methods used and the terms and conditions of the sale. It’s important because it is a written record of what the buyer and seller agreed to, so there are no more mistakes.
CPQ software speeds up the quote-making process by letting users quickly set up products to meet customers’ needs, add discounts and specials as needed, include all necessary terms and conditions, and put everything into one document for easy review. This takes away much of the work that must be done by hand to make rates accurate.
The ability of CPQ software to make quotes almost quickly means that they can be handy for speeding up negotiations and closing deals. Also, ensuring that the quotes are correct throughout the process cuts down on mistakes that could cost a lot later on.
Like words
- Set up a price quote
- Set the price quote
- Set up, price, and quote
How do you use CPQ software?
CPQ software helps companies handle the complicated price of their goods and services. This technology helps sales teams set up the products they sell, the rules for pricing and discounts, and the ability to make accurate quotes and professional proposals tailored to buyers’ needs.
Companies that sell customized or made-to-order goods often use this kind of software because it makes it easier to quote and set prices. CPQ software can also make managing orders easier and help ensure that prices are correct and followed. CPQ software gives users a graphical interface that makes it easy to choose the options and variations they want when setting up goods and services. The CPQ program then determines the right price based on the choices. This can help you make quotes and sales faster and with fewer mistakes.
CPQ software can also help you make price records and handle sales and discounts. Any business can use this software, but companies that sell complicated goods or services often need it the most. CPQ software can help make quoting and placing orders faster and more accurate. This can make customers happy and lead to more sales.
CPQ speeds up the sales process, cuts down on administrative work, and ensures buyers get correct quotes, all of which improve the customer experience. Some more advanced CPQ software can also track how engaged the customer is with the quote and how the deal is going, and it can give analytics on the sales process.
Setting up
Setting up ensures that products are available, meet the buyer’s needs, and come on time and within the agreed-upon terms.
The price
Price management lets salespeople pick from different products, packages, and services, and it also lets them offer discounts that have been accepted.
Say It Again
Making a quote ensures that all the information in it is legal, on-brand, and follows the rules.
In what ways does CPQ help brands?
- CPQ’s most important feature is that it lets you set up the right products to sell to your customers, no matter how easy or complicated your products are. CPQ software automates the process of making quotes, considering how products depend on each other, how prices are set, and how discounts work. Then, professional plans are made to send them to the possible customer.
- There are different kinds of Configure Price Quote software. Basic tools on one end let salespeople put a product, choose a discount, and get a quote. On the other end are more complex systems that connect to ERP systems and do things like shipping and inventory management.
- CPQ software makes selling more accessible and efficient by using a sales plan to walk sales reps through the quote process. In the CPQ, the Sales Playbook tool helps sellers focus on the buyer’s wants and move deals forward. Sales workers can choose the correct configurations for each customer to ensure prices are always the same, quotes are correct, and approvals happen faster.
- A product rules CPQ form that turns multiple SKU variations into a step-by-step question-and-answer session removes the confusion and makes quotes simple for buyers to understand. Cross-sell and upsell suggestions are built into the workflow. These are useful, rule-based sales suggestions that let deals be customized for each buyer.
- With a CPQ that includes guided selling, sales reps can make automatic price quotes, including visual product comparisons, online visual tools, and audit trails. They can keep track of all the changes and acts that happen as they happen.
- Sales teams can speed the quoting process with instant, high-quality, professional prices. Usually, this cuts the time it takes from days and weeks to minutes and hours. With little training, sales reps and channel partner reps can quote like pros, and the personalized quote templates will help sales organizations keep a consistent, professional company image.
How does CPQ make sure that price quotes are correct and accepted?
CPQ solutions also take care of legal product configurations, consistent pricing, and getting quotes approved. Integrated approval processes ensure that important people are aware of quotes before they are sent, which is very important when special pricing or custom products are offered. CPQ solutions can also ensure that sales quotes can’t be changed after they’ve been accepted, whether on purpose or by accident. Sales reps can be sure that the quotes they send customers are correct and that orders based on these quotes will not be turned down.
What sound effects does a CPQ system have on sales operations?
Aberdeen Group polled 159 businesses in 2013 to find out what sales strategies and tools the best-performing businesses used to close deals. They learned that using a CPQ system to improve sales workflows is much faster and more efficient than doing things by hand. If you use this sales tool to send quotes to customers during the quote-to-cash process, here are some of the benefits:
More Correct Quotes
You can be sure that the quotes you send your customers are correct when using CPQ software. CPQ software does this by looking at all the essential information, like how to set up a product, its price, whether it’s available, and any savings that might apply.
Higher rate of lead conversion
Interested people don’t want to keep up with the salesperson while waiting for a bid. People interested in buying should be able to move quickly through the process. Using a CPQ system, custom quotes can be made in minutes, significantly increasing the chance of qualifying the lead by 21 times!
More quotes are being written.
In the past, it could take days or even weeks to make a quote. You can make a quote in minutes with CPQ software. You can close deals faster and give your customers a better experience.
Cut down on the sales cycle.
The sales cycle can be cut down because it’s easier to make quotes and close deals with CPQ software. You’ll get more work if your quotes are correct and your turn-around time is shorter.
Deal Size Has Grown
Price controls that are automated protect profit margins and stop dishonest selling. Discounts that are less than a certain amount can be approved immediately, and discounts that are more than that amount can be sent to the right person to be approved. In addition, CPQ software walks sales workers through upsells and cross-sells to ensure buyers get the best deal possible, which often leads to a bigger deal.
CPQ for Business
CPQ software is helpful for many businesses but beneficial for those that sell complicated goods or services. It is mainly used in the software, IT, and manufacturing businesses. CPQ can help companies in the manufacturing business keep track of a lot of different product configurations. CPQ can help companies handle a lot of software licenses, subscription models, and product setups in the software and IT industries. CPQ helps businesses in these fields make more money.
- IT and software
- Computer and network safety
- Making things
- �� Money
- Talking on the phone
- Food and drinks
- Good health
- Moving things and supplies
- Marketing and ad campaigns
- ₷online learning
- HR (Human Resources)
- Business Providers
- Taking Care of Waste
- CRM that works with CPQ
How does CPQ work with CRM?
All businesses use a CRM to keep customer information organized and monitor sales possibilities, no matter how big or small. Adding a CPQ tool to a CRM, on the other hand, makes businesses more productive and speeds up the sales process.
Quotes, contracts, and proposals that work together
Some of the best CRMs for sales teams are Salesforce, Microsoft Dynamics, SugarCRM, HubSpot, and Freshworks. These teams use CRMs to find leads and follow up with them, but they also use separate tools for sales quotes, price optimization, proposal creation, contract management, and playbooks.
With a CPQ, you don’t have to use Microsoft Excel and Word for these sales tasks; they can be built into the sales process.
CPQ and CRM do many of the same things, but they’re used for different parts of the sales cycle. Sales reps can quickly talk to possible customers and send proposals when the CPQ is built into the CRM. When all sales processes are linked, the sales cycle never gets stuck, which makes it more likely that a deal will go through.
Shorter time between sales
It has been shown that businesses that use CPQ solutions have shorter sales cycles. Reps can quickly make complex quotes, react quickly to proposal requests, and avoid “indecision” sales losses.
Quotes are given faster when the workflow is organized. When used with effective CRM solutions, a CPQ makes it easier for sales reps to do their jobs and shortens the time it takes to make a sale.
Fewer mistakes and delays
When reps use CRM solutions and separate sales tools, the chance of mistakes going wrong increases significantly. Price rules and sales materials aren’t part of the reps’ work, so they waste time looking for them.
Manually quoting prices is prone to mistakes. Sales reps must look through Excel sheets, price lists, and product documents to make a quote. This means that mistakes are sure to happen.
Everything works together when CPQ and CRM tools are used together. In real-time, prices are changed, and the CPQ is the only source of truth for goods, inventory levels, prices, and discount rules. Quote generation is part of a process that makes it easier for reps to make accurate price quotes and proposals and includes supporting content assets.
If they do this, sales reps are more likely to get a firm “yes” when closing the deal. It impresses prospects and amazes clients.
Adoption Made Easy
One benefit of integrating CRM and CPQ that is often ignored is that it makes it easier for users to adopt. When sales teams connect a CPQ to the CRM tool they already use, there isn’t much to learn. The CPQ process is now part of the sales process. CPQ is easy to learn, even for new salespeople who don’t have much experience. They will quickly see that it helps them do their job better and close deals faster.
Does your company’s sales team need Configure-Price-Quote software?
There are several reasons why businesses need to use CPQ. These are some of them:
- Inefficiencies in the sales process
- Admin chores that are too hard to do
- Complex ways of setting up products
- wrong sales rates
- Quotes are often changed.
- ₷Unauthorized discounts
- Quotes sent without permission
- It takes too long to answer customers’ calls for quotes.
- Missed chances to offer and cross-sell
- Renewals not done
The customer had a wrong buying experience and was unhappy with the sales process.
When arguing for CPQ, you should consider what the company, the sales operations department, the sales team, and the customers need.
Sales Operations needs CPQ to ensure the sales process is productive and efficient. This includes making quotes and proposals and training sales reps.
With a CPQ, you can be sure that every step of the sales process follows a standard script and that the prices and options are correct.
The software always has the most up-to-date prices and discounts for team members, making quotes error-free.
Companies require CPQ to make prices consistent, ensure correct quotes, and build their business. CPQ lets sales teams consistently show the company regarding pricing, messaging, and the proposal’s look and feel. CPQ shortens the sales cycle by ensuring that sales reps reply quickly to customers, make quotes, and quickly make proposals that decision-makers notice.
CPQ solutions have tracking and data built in to see how customers react to quotes and find out where quotes are stuck in the sales process. Looking at the value of quotes and deals that are accepted or turned down can help make revenue processes better.
Read also: 13 CPQ Features That Sales Operations Leaders Care About the Most.
CPQ helps sales teams because it cuts down on the time they spend on tasks that aren’t related to sales. A CPQ helps them get back to customers faster with the correct pricing, messaging, and marketing materials, eliminating time-consuming administrative chores.
When buyers get quick responses to their quote requests, CPQ makes financial sense. They are happier with the sales process and trust the company more. It ensures that quotes are correct and go through a process of approval before they are sent to the customer. Customers can use personalized information in proposals to help them make intelligent business choices. These things are necessary for a sales process focused on the customer.
What does CPQ do to help sales teams reach their goals?
CPQ makes the sales process more accessible, which makes sales teams more effective and productive. The time it takes to get a new employee to value is shortened by guided selling. When sales workers don’t have to spend as much time on paperwork and follow an easy-to-understand workflow, they have more time to sell and build customer relationships.
When should CPQ happen?
People have ideas about when businesses should start thinking about CPQ. A company doesn’t need a certain number of salespeople or very complicated pricing or configurations to see the value in a CPQ solution. When figuring out when to use CPQ, there are more critical things to consider.
