Configure, Price, Quote (CPQ) software assists companies in creating quotes and proposals for clients. Working through estimates for potential hundreds of clients, you can complete this task by hand, filling in each field one at a time. Software, on the other hand, improves customer satisfaction, increases accuracy, and costs less time.
A growing number of businesses across many industries are using CPQ software. On average, non-CPQ users take 73% longer to quote a proposal, according to statistics. Additionally, the lead conversion rate is 17% higher for CPQ users.
In what ways do CPQ solutions operate? And might this kind of software be useful to you? We’ve covered all you need to know about CPQ software in detail here.
What is CPQ Software?
CPQ is a sales tool that helps businesses create accurate and timely quotes for orders. In order to guarantee integrated data and accuracy, CPQ systems frequently collaborate with CRM platforms, ERP software, and other business technologies. In order to provide error-free pricing that accounts for quantities, discounts, customizations, optional product features, numerous revenue types, and incompatibilities, quotes generated with CPQ software are automatically generated in accordance with a preprogrammed set of criteria.
Just 34% of sales representatives’ time is spent actually closing deals, and studies reveal that creating estimates, proposals, and getting approvals takes up some of a sales team’s non-selling time. Users have noted the following when CPQ is properly implemented and used:
- Quote generation is ten times faster.
- 95% shorter approval time
- The quote to cash process is twice as quick.
- 30% faster ramp for new representatives
Many businesses are considering CPQ software because of its capabilities and potential for a high return on investment (ROI). As businesses realize the true advantages of integrating CPQ with their CRM and ERP systems, its use will only increase.
How Does CPQ Software Work?
The CPQ program starts by letting the client customize the details of the order they want to place.
The software then generates a price for the consumer in real-time while they are configuring their product based on the established pricing rules you have selected. These price guidelines may include tiered pricing or volume discounts. You may see the whole cost and submit it for approval right away.
Lastly, a quote will be generated by the CPQ program after the initial pricing has been authorized. Information like product timelines and payment schedules will be included in this quote. Once more, before delivering the quote to your customer, you will check and approve it.
In the end, CPQ software follows the same basic configure, price, and quote process, but it completes the steps considerably more quickly and precisely than a human can.
Benefits of CPQ Software
Meeting the specific demands of each of your customers gets more difficult as your business grows. In order to produce the most impactful quotes, sales representatives must navigate a plethora of information. Businesses can use Configure, Price, Quote (CPQ) software to solve this problem.
Working with large datasets, CPQ software eliminates the possibility of human error while compiling pertinent data in a fraction of the time. Additionally, the program will have access to current pricing and other factors, enabling it to produce the best rates for specific clients at any given moment.
Other benefits of using CPQ software include:
Implement your price strategy: Sales representatives can follow established pricing plans with the help of CPQ solutions, which offer improved pricing guidance. It facilitates the efficient implementation of pricing policies by establishing precise structures for target prices and discounts.
Controlling discounts and maintaining uniform pricing: This can be difficult when there are several sales representatives working with a large number of clients. By ensuring consistency in price and discounts across all quotes, CPQ software helps to minimize disparities.
Error removal: Human mistake is a common occurrence in manual procedures, which can lead to missed margins or sales opportunities. By lowering or eliminating these mistakes, CPQ software improves quoting accuracy.
Multi-currency support: CPQ software guarantees precise pricing and currency conversions for international clients. By giving users access to the most recent exchange rates, it streamlines transactions involving several currencies.
Contract pricing: Depending on a number of variables, pricing out contracts might be difficult to put together. All parties gain when CPQ tools swiftly gather pertinent information to produce the best contract costs.
Advanced discounts: For both customers and sellers, sales tools provide immediate access to data for calculating discounts and promotions. This ability can improve conversation rates for prospects and increase income.
Single source of truth: CPQ solutions simplify quote management by combining data from multiple sources into a single system. The hidden cost of price errors is lessened and the chance of human error is decreased by this concentration.
Improved user interface: The user-friendly interfaces of contemporary CPQ systems meet user expectations influenced by B2C shoppers’ experiences. A simple quoting procedure increases user satisfaction and efficiency.
Boost operational efficiency: Sales representatives can spend more time cultivating connections with clients rather than collecting data by automating data collection. Additionally, CPQs speed up the onboarding process for new representatives by eliminating the requirement for in-depth product expertise.
Save time and money: CPQ solutions reduce the amount of time clients must wait for quotations by quickly gathering and simplifying the most important information. In addition to saving time, this efficiency lowers operating expenses related to lengthy quote generation.
By using CPQ software, companies can increase customer happiness, decrease errors, and optimize their sales operations.
Also Read: Why RevOps Leaders Are Prioritizing Revenue Intelligence Over CRM Alone
Four Ways CPQ Accelerate Sales Cycles and Boost Revenue
1. Product Knowledge Promotes Purchases
A CPQ will improve product knowledge by simplifying your complicated products so that everyone can comprehend them. By presenting a series of preset questions, CPQs generate interactive 3D models that visualize your items and assist customers in selecting the ideal setup. Everyone, not just professionals, can fully comprehend and purchase your items thanks to this simplification.
This implies that you can greatly increase the size of your target audience. The product knowledge required to make a purchase, however, will be possessed by your current leads and customers. Salespeople have the perfect time to begin cross-selling and upselling when customers have a greater understanding of the items and are more willing to pay for them. CPQ increases revenue in this way.
2. A Shorter Sales Cycle Boosts Quick 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.
Furthermore, a CPQ will eliminate any human mistake from the sales process, so your business won’t have to deal with items that don’t comply with local regulations, improper configurations, or sending the wrong spare parts. You can hit the iron while it’s hot by further reducing your sales cycle by eliminating errors!
3. More time devoted to actual sales
Your salespeople will have more time now that the sales cycle is shorter! The sales process will be automated using a CPQ platform, which also enables customers to properly configure items, create estimates, and place orders without any outside assistance. Your sales staff can now use the time they save to acquire new clients, support more complicated projects, or upsell or cross-sell. And your sales will rise as a result.
By using a CPQ, your sales staff may concentrate on closing deals rather of completing inefficient chores like pricing each item in a configuration or handling administration.
4. Internal efficiency will increase
Finally, increased internal efficiency brought about by a CPQ system will eventually translate into higher income. When combined with existing tools, such as ERP, CRM, CAD, PLM, etc., a CPQ performs at its best. By doing this, you can ensure that you are always working with the most recent and accurate data and prevent having to reenter it.
You may design a completely automated order intake using a CPQ. Customers or distributors can place orders and configure products on their own. Orders are instantly verified, appropriately handled, and billed through platform integration.
Final Thoughts
In today’s fast-moving and competitive market, CPQ (Configure, Price, Quote) software has become a must-have for businesses. It helps simplify complex sales processes and cuts down on errors.
With CPQ, tasks like product configuration, pricing, and creating quotes are automated. This speeds up the sales cycle and makes things smoother for customers.
It also helps boost revenue by making the entire process more efficient. As businesses look for smarter ways to close deals quickly, CPQ proves to be a smart investment.
It gives sales teams the tools they need to work faster and sell more, helping the business grow.
