CPQ vs ecommerce: Exploring the differences and complementarity
In today’s rapidly changing economy, companies are always on the lookout for ways to improve their sales processes. In recent years, Configure Price Quote software and ecommerce have proven to be useful tools for these companies to sell their products and services in an easy way. While the two approaches might seem similar at first, there are some key differences that are important to consider. Let’s take a look at these two online solutions, their similarities and differences, and how they can complement each other to help businesses grow.
What is CPQ software?
Configure Price Quote or CPQ software is an online tool that helps companies sell their complex or highly configurable products in three steps:
- Configuration: At the core of each CPQ is a powerful product configurator, allowing users to configure products in 3D.
- Price: CPQ software will immediately calculate the accurate price for a configuration, based on the most recent price lists, taking discounts and shipping costs into account.
- Quote: CPQ users can instantly generate an error-free quote, saving time and increasing closing rates.
Additionally, CPQ software also allows orders to be placed on the platform, centralizing all sales related data and using it to generate relevant reports and dashboards.
What is ecommerce?
While CPQ focuses on automating the sales process, ecommerce simply refers to the buying and selling of products and services online. It allows businesses to set up an online store, including features such as product, order, and payment management. By making the sales process digitally available, companies can target a wider range of customers and improve the buying experience.
What are the main differences between CPQ software and ecommerce?
The primary difference between CPQ and ecommerce is their sales focus. If you’re selling highly complex and customizable products and services, CPQ will be the right solution for your business. However, if you’re manufacturing simple, standard, or off-the-shelf products and services, ecommerce will be a better fit. While CPQ is more consultative and personalized, ecommerce relies on high-level self-service, where customers can browse and purchase products without interacting with a sales rep.
To better understand these key differences, let’s take a look at the advantages and disadvantages of each approach:
The advantages of CPQ
- Efficiently selling and managing complex products
- Product customization
- Creating instant quotes and sending updates to the CRM
- Manages complex pricing easily
- Integration of orders in ERP
The advantages of ecommerce
- Lower cost (often OpenSource solution)
- Easy to install, easy to use
- Allows online selling, with additional plugins or extensions
The disadvantages of CPQ
- Higher cost than an ecommerce solution
- Requires knowledge of the business, products, and internal processes
- Requires some training to use
The disadvantage of ecommerce
- Not suitable for complex or customizable products
- No native and limited quote management
- Cannot manage complex pricing
How CPQ and ecommerce complement each other
CPQ and ecommerce can work together to improve the overall customer experience. Imagine a user goes to a company’s ecommerce portal, adds configurable items to their shopping cart and is then redirected to a CPQ platform to complete their configuration and calculate the accurate price according to clearly defined parameters. The user will take his configured products back to the ecommerce platform to finalize his order. By integrating CPQ with ecommerce like this, businesses can create a seamless sales flow, with CPQ taking care of configuration and price management, and ecommerce administering lead generation and order management.
Why CPQ is still important even if you already have ecommerce
Implementing Configure Price Quote software is still essential for businesses that sell complex products, even if they already have an ecommerce platform. CPQ allows you to provide accurate quotes quickly and with fewer errors, improving the overall efficiency of the sales process. It also helps build better customer relationships with the distribution network, and increases the engagement, leading to more significant sales opportunities.
Therefore in a B2B situation, an ecommerce solution cannot (yet) replace a CPQ. That’s why we will always recommend a hybrid solution for manufacturers of complex products.
Conclusion
CPQ and ecommerce both have their advantages and disadvantages depending on the needs of a company. If you’re manufacturing simple products and need a quick and easy way to sell these, ecommerce is the way to go. However, if you have more complex products, with complex pricing and order management, a Configure Price Quote software will be a better fit, especially if you can combine it with ecommerce in a hybrid solution.
Do you have questions about CPQ or ecommerce? Are you curious to know how we build successful CPQ solutions for medium to large enterprises in the manufacturing industry?
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