How CPQ drives sales
Are you losing sales because it takes too long to make a quote? Long sales cycles kill deals. It slows down your manufacturing business on its way to growth and holds sales back. Are you also looking out for a shorter sales cycle to be able to move faster and grow? A CPQ can assist you with this process. But what exactly is CPQ? And how does it drive sales? That’s what we will be figuring out in this article.
What is CPQ?
CPQ stands for Configure Price Quote and refers to a software system that helps companies sell their complex products using three different steps:
1. Configuration: the configuration or composition of complex products by selecting and combining different product options. Configurations are immediately validated and drawn into an interactive 3D model.
2. Price: the accurate calculation of the price of a configured product based on your price lists, taking into account factors such as discounts or different pricing per region.
3. Quote: the generation of a correct quote that describes the configured product and its price. You can guarantee that every outgoing quote has been provided with an impressive design by using templates.
This can all be done within one tool! A CPQ platform has many advantages, such as making complex products easier to sell and improving the customer relationship. But CPQ also drives sales. There are four ways CPQ’s increase sales:
Four ways CPQ increases sales
1. Product knowledge encourages buying
A CPQ will increase the product knowledge by making your complex products easy to understand for everyone. CPQ’s create visualizations of your products in interactive 3D models and help users find the right configuration by asking a set of predetermined questions. This simplification allows everyone, not only experts, to perfectly understand and buy your products.
This means you can expand your target audience significantly. On the other hand, your existing leads and customers will have the product knowledge needed to make a purchase. A better understanding of the products also leads to a higher willingness to pay, creating a perfect opportunity for sales representatives to start cross-selling and upselling. This is one way CPQ boosts your sales.
“Simplicity is the ultimate sophistication, the Hive tool makes quoting Skylux products much easier!” – Jean Glorieux, Skylux
2. A shorter sales cycle stimulates fast decision-making
A second way CPQ can increase sales, is by shortening the sales cycle. The cycle for manufacturers is often very long. Customers or distributors regularly have to wait weeks for a quote. With a CPQ you avoid giving your customers room to reconsider their decision. The automation within CPQ’s allows you to move faster: users can immediately generate an accurate quote after configuring their product. This cuts the lead-time back from a couple of weeks to a process of a couple of minutes.
On top of that, a CPQ will also remove all human errors from the sales process: incorrect configurations, products that are non-compliant to certain regional rules, or sending the wrong spare parts will no longer burden your company. Eliminating errors will shorten your sales cycle even further, so you can strike the iron while it’s hot!
3. More time spent on actual sales
With this shorter sales cycle, your sales teams have more time available! A CPQ platform will automate the sales process and allows users to configure products correctly, generate quotes and place orders without needing external help. The time your sales teams are saving can now be used to support more complex projects, to upsell or cross-sell, or to find new customers. And this will increase your sales.
Using a CPQ, your sales teams can focus on selling instead of on finishing less productive tasks, such as administration and pricing each item individually in a configuration. This keeps your employees happy and makes their lives a lot easier.
4. The internal efficiency will grow
Lastly, a CPQ solution will lead to more internal efficiency, which will in time result in more revenue. A CPQ works optimally when it’s integrated with tools you are already using, such as ERP, CRM, CAD, PLM… This way you avoid having to re-enter data and you guarantee you are always working with the correct and most recent data.
A CPQ allows you to create a fully automated order intake. Distributors or end customers can independently configure products and place orders. By integrating with other platforms, orders are immediately validated, correctly addressed and invoiced. This saves you a lot of time and allows you to spoil your customers.
Using a Configure Price Quote platform drives sales in four different ways. By increasing the product knowledge, by shortening the sales cycle, by unburdening your sales teams from time-consuming administrative work and by developing the internal efficiency, CPQ-users are able to skyrocket their sales! Allowing their company to grow!
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