CPQ

What is CPQ Software? A Complete Guide to Configure, Price, Quote Solutions

October 12, 2024

CPQ Software

What is CPQ Software ? A Complete Guide to Configure, Price, Quote Solutions

Nobody likes to waste time when it comes to doing business. Your sales reps would prefer to spend their time selling products, instead of crunching numbers. However, a recent report by State of Sales discovered that sales reps tend to spend only 28% of their time with selling. They spend the rest of their time with generating proposals and quotes. On top of that, they also wait for hours or even days waiting for approvals.

How can you help your sales representatives to overcome this? That’s where a CPQ software can benefit.

CPQ (Configure, Price, Quote) software is a sales enablement tool that allows businesses to efficiently configure complex products. You can also use it to generate accurate quotes and streamline the entire sales process. This guide will explain what CPQ software is, its key capabilities, top benefits, and why it’s an essential sales tool for many companies.

What is CPQ Software?

CPQ software, short for Configure, Price, Quote, is a software platform that automates and optimizes the entire sales cycle for customizable, configurable, and complex products. It provides a guided selling and configuration experience for sales reps and customers to generate error-free orders and quotes rapidly.

Key capabilities of Configure Price Quote software include:

Product Configuration

CPQ solutions provide an intuitive interface for sales reps and customers to configure complex products by selecting various components, features, parts and services. This product configurator ensures accuracy and standardization across all quotes.

Pricing & Quoting

The system instantly calculates pricing options based on pre-defined rules for margins, discounts, and bundles. It generates quotes and proposals in real-time with consistent and accurate pricing. The dynamic pricing software will always generate accurate pricing for sales reps.

Document Generation

The CPQ software comes with an automated quoting tool as well. It enables quick generation of quotes, proposals, and contracts in custom templates. Documents can be exported in different file formats and seamlessly integrated with CRM and ERP systems.

Guided Selling

CPQ software guides sales reps to ask relevant questions and recommend suitable products, options, and upgrades to customers based on previous purchases and activity. This leads to smarter upsell and cross-sell.

3D Visualization

Some CPQ solutions leverage 3D visualization and augmented reality to showcase product configurations interactively. This 3D product configuration improves customer experience and sales conversions.

Discount Management

Businesses can pre-configure discounting rules and policies for volume discounts, promotions etc. CPQ systems can then automatically apply appropriate discounts to quotes.

E-Signature Integration

Quotes and contracts can be directly sent to customers for e-signatures from within the CPQ software through integrations with leading third-party e-sign services. When combined, these features can make CPQ software an excellent sales automation tool.

Why Businesses Need CPQ Software

CPQ software brings immense value to sales teams in industries like manufacturing, high-tech, telecom, and automotive where products are complex, configurable and priced dynamically. Some key reasons why CPQ is a must-have sales tool:

Shorten Sales Cycles

Empower reps to rapidly configure products, generate quotes and get orders signed faster. CPQ software enables up to 20x improvement in quote turnaround time.

Increase Quoting Accuracy

The quote generation software that comes with CPQ software makes life easy with customizable pricing and quotes. Eliminate pricing errors and ensure all quotes follow pre-defined rules for product selection, configuration, pricing, and discounts. When combined with real-time pricing, it can lead to more accurate quotes.

Improve Customer Experience

An intuitive guided selling interface and 3D visual product demos enhance customer experience and drive higher conversion rates.

Reduce Operational Costs

Automate pricing, approvals and quoting processes to significantly reduce time spent preparing quotes manually. This results in lower operational costs.

Standardize Pricing & Sales Process

Standard pricing models, discounting rules, product bundles, and sales workflows ensure consistency across all sales channels - in-person, inside sales and ecommerce.

Gain Business Insights

Robust reporting and analytics in CPQ provide real-time visibility into quote performance, win/loss analysis, customer behavior etc. to offer actionable insights.

How to Look for a CPQ Software?

Now you have a basic idea of what a CPQ software is all about. When looking for a CPQ software, make sure to keep an eye on following features. These features are available only in one of the best CPQ software you can find.

Guided Selling Tools

The guided selling tools recommend different products based on customer needs identified through an interactive Q&A process.

3D Visualization & AR demos

Highly interactive 3D product demos with AR capabilities improve engagement during the sales process. The 3D visualization software in the product customization platform takes away guesswork when designing configurable products.

Catalog & Inventory Management

There should be a central catalog for all product data including pricing, configurations, and parts. Real-time sync with inventory systems.

Product & Price Configuration

Automated price calculation is a must-have feature. There should be an intuitive UI for sales reps or customers themselves to dynamically configure customizable products and services. It will eventually offer error-proof configuration.

Pricing Management

Create flexible pricing rules for volume discounts, margins, recurring billing etc. Automatically apply for accurate quoting.

Quote Generation & Proposals

The CPQ software should offer custom quote templates as well. It can help you rapidly build quotes and proposal documents from pre-approved templates. Share via portal for digital selling.

Document Creation & Management

Make sure that your CPQ software comes with an advanced discount management software as well. Custom branded templates for quotes, contracts, RFPs and other sales documents. Integration with e-signature tools. E-signature integration can make it easy to add approvals to the quotes.

CRM & ERP Integrations

CRM and ERP integration can ensure sales process optimization. Get a complete view of customer activity through integrations with systems like Salesforce, NetSuite, and SAP. Sales Analytics & Reporting Pre-built and customizable reports offer data-driven insights into quote performance, conversions, and profitability.

Final Words

CPQ software makes quoting and selling complex solutions faster, easier and more accurate. It empowers sales teams to rapidly respond to leads, close deals faster and enhance customer experience. Companies selling configurable or customizable offerings will benefit greatly by implementing CPQ to scale revenue growth efficiently. The improved visibility, control and insights delivered can help boost key sales metrics considerably.

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