What is CPQ?
No doubt you've seen the term CPQ come up, especially if you work in the manufacturing industry. But what is CPQ or Configure Price Quote software? How can it help your business and what should you pay attention to?
What does CPQ mean?
CPQ is the abbreviation of configure, price and quote. A CPQ solution is a software system that helps companies sell complex products. It supports sales representatives, internal sales departments, R&D teams, distributors and customers in placing an order.
What are the steps involved in a CPQ system?
1. Configure: The end customer configures a product by combining product and service options, in a powerful product configurator that immediately displays a 3D render and a bill of materials.
2. Price: The CPQ software instantly calculates the correct price. To do this, the system gets its information from ERP, so you're always using the most recent prices. CPQ also takes into account factors such as discounts, shipping costs and more.
3. Quote: The user can then instantly generate a quotation of the requested products, in just one click. That way, not only does the customer receive a quote much faster, but the sales team also saves an enormous amount of time by no longer having to manually prepare quotes.
What are the benefits of CPQ?
Generally, you turn to CPQ software to speed up your sales process and reduce the margin of error, but the additional benefits are numerous:
- Increased sales. Because the sales process runs more smoothly and easier, companies using CPQ almost always notice an increase in their sales.
- Huge time savings. With CPQ, you can generate quotes within minutes. Sales reps no longer have to spend hours on a single quotation, so they can spend that time on better customer service.
- Fewer errors. Because all information comes real-time from one central platform, you can be sure that your prices are correct and that customers cannot place faulty orders.
- User-friendly ordering. The sales process gets simplified for end customers. The product configurator visualizes complex products in a way the customer can easily understand, helping them choose the product that fits them best.
- Greater willingness to buy. Because your customers receive the offer immediately, they are more likely to buy immediately than if they had to wait days or weeks for a quote. Let your customers discover your products in a user-friendly way.
- Get valuable sales insights. Because you're on the same platform as your distributors and customers, you know what's in the pipeline, allowing you to generate a more accurate sales forecast.
- More upselling. Because the product configurator clearly shows which additional options are possible, you can upsell more to your customers.
When is a CPQ platform interesting?
CPQ software is primarily a sales platform. To decide whether your company would benefit from a CPQ, you need to look at your current sales process.
- Do you sell configurable and complex products?
The reason product configurators are so popular with manufacturing companies is because they simplify the product offering and help the customer make the right decision.
- Do mistakes sometimes creep into your orders?
With complex products, customers or sales reps can lose sight of which product options are combinable. A CPQ configurator takes your ‘product rules’ into account and will never show a configuration that isn’t being sold.
- Is your back office wasting too much time preparing quotations?
Preparing quotations is a very time-intensive process. You can even miss out on deals because it takes days or even weeks to get a quote out the door. Thanks to CPQ, manually calculating prices is a thing of the past. In fact, a good CPQ software takes into account volume discounts, pricing by region, shipping costs and more.
- Is finding the right product and pricing information difficult?
Because CPQ software bundles all the information in one place, you're always working with the latest options, pricing, inventory and more.
- Need to bring your distributors up-to-date regularly?
Changes in product offerings or price adjustments can be difficult to communicate to dealers. Chances are they are often working with outdated information. Using CPQ keeps your distributor network in the loop.
What to look out for when choosing a CPQ software?
Once you have decided to go for a CPQ solution, the next step is to select the appropriate software. Not an easy exercise, considering the wrong software will cost you a lot of money and time. Here are the factors best to consider when making your choice.
1. The CPQ must meet your company's requirements
First, it is important to identify your own needs. Are you just interested in beautiful quotations, or do you want to keep the customer informed about the delivery of their order via a dedicated shipping module? Is a photo enough for your customer, or do you need a 3D model or photo-realistic render? Always check if your requirements match the capabilities of the CPQ software.
2. The CPQ platform must be user-friendly
Also keep the user in mind. You can use your CPQ exclusively internally, but if you really want to get the most out of it, you should give your end customers access. And for them, the tool must be extremely user friendly. Even without training, they should be able to configure products, consult prices and generate a quote. Only with a user-friendly user interface do you guarantee that customers will actually use the software.
3. Support and training are an enormous added value
Implementing CPQ takes time: building product configurators, connecting systems, creating 3D models, etc. can take months. And you can use help with that! Make sure you choose a CPQ vendor that offers support during implementation. Even after implementation, it is convenient if you can turn to a reliable party. For new employees, it is a bonus if your CPQ partner offers training. And even if you decide to do the maintenance yourself, you often lack the capacity and time to do so, so a partner with a suitable support service can save you hours of work.
4. If you want to grow, CPQ must be scalable
CPQ software must be able to grow with your business. Therefore, your CPQ system must be flexible and scalable. Can you easily add new customers or new languages? Do prices adjust automatically based on changes in the ERP system? Can you easily create new products or build configurators? The best CPQ platform is a long-term solution that grows with your business.
What are the essential CPQ features?
Discover the most essential features in Configure Price Quote solutions that will elevate your business to new efficiency heights! Our CTO Stijn De Mulder revealed his top picks at the CPQ Inspiration Sessions. From integrations to dynamic 3D visualization, find out which features make a difference!
Interested in knowing more?