What is Configure Price Quote (CPQ)?
Configure Price Quote (CPQ) is software that simplifies the process of generating customer quotes and makes them more effective. CPQ software is usually an extension to your existing Customer Relationship Management (CRM) platform, giving the software access to key details on your customers. CPQ software collates these details and uses them to determine the best way to configure products for each customer, what the optimal price is, and automatically generates a quote. Using the software offers various benefits over doing the task manually.
The process of generating quotes usually consists of three stages:
- Configure: Configuring product offerings that match the customer’s needs. This process can be complex, due to a variety of variables, including the customer’s requirements and the product being sold.
- Price: Offering customized solutions is an effective way of delivering value to your customers. However, offering different solutions also means different prices. So sales teams need to work out what the client is willing to pay, and what the optimal price must be to meet the goals of their own company.
- Quote: Once a deal and price have been formulated, a quote needs to be sent to the customer. Because a customer will often have multiple potential vendors to choose from, it’s important that an accurate quote is sent as soon as possible.
Salespeople only spend approximately 39% of their time doing what they’re best at – selling. The rest of their time is spent on administrative tasks like generating quotes. This is, obviously, a less-than-optimal use of their time.
The configure, price, quote process can be very time-consuming – time that could otherwise be spent on more productive tasks like closing sales. Manual processes can also be vulnerable to human error.
Gartner Names Vendavo a Visionary in 2022 Gartner Magic Quadrant for CPQ.
Benefits of CPQ Software
Large companies will have many customers to work with, and each of these customers will need to be treated as individually as possible to maximize sales. This becomes harder to do the more the company grows. Thus, sales reps are put in the situation of needing to have visibility of a lot of information to generate optimal quotes.
CPQ software can work with vast databases, collating the relevant data in a fraction of the time and removing the potential for human error. The software will also have access to up-to-date pricing and other variables, helping to generate optimal quotes for individual clients at any particular time.
Other benefits of using CPQ software include:
- Consistent Pricing and Discounting Control: With multiple sales reps working with numerous customers, it can be very difficult to maintain a consistent approach to pricing and discounts. With CPQ software, consistency can be maintained with every quote.
- Multi-Currency Support: CPQ software makes working with multiple currencies seamless. The software has access to current exchange rates, helping to ensure accurate currency conversions.
- Contract Pricing: Pricing up contracts can be complex, with numerous current and future variables to be taken into account. CPQ software can quickly collate the relevant details to generate an optimal contract price for all parties.
- Advanced Discounts: CPQ software has instant access to the information that helps it calculate discounts that benefit the seller and the buyer. Advanced discounts calculated with the software can help to increase revenue and convert more prospects into customers.
- Increases Staff Efficiency: Instead of having to spend time collating data from databases and documents, sales reps can focus on generating revenue. They will have more time to work with customers and develop a relationship with them, helping to increase sales and revenue over time.
- Saves Time and Money: Collating data from different courses can be time-consuming – potentially leaving customers waiting for quotes. CPQ software can collate all the information it needs in moments. Not only will this save you a lot of time, but it can also save you money in terms of reduced wages.
- Error Elimination: Any manual process is subject to human error at some point; those errors can be costly in terms of lost sales opportunities or lost margins. So there’s obvious benefit in reducing or eliminating those errors with intelligent CPQ.
Discover More Benefits and Strategies in Our Comprehensive Guide on CPQ
Signs Your Organization Needs CPQ
Below are some of the most telling signs that your organization needs to adopt intelligent CPQ software.
- Need Help Managing Thousands of Products: Managing thousands of products is likely to be very time-consuming. So mistakes become more likely the more products you have. CPQ software will overcome these issues for you.
- Sales Team Lacks Updated Information: Does your sales team lack the up-to-date information they need to work effectively with their customers and generate optimal quotes? CPQ software will provide them with the information they need, whenever they need it.
- Global Scale: Are you operating on a global scale with many customers in different locations? CPQ software will help you manage such a large customer base, and help generate accurate quotes in your customers’ currency.
- Quick and Accurate Pricing: Are you finding it difficult to provide quick and accurate pricing for your customers? CPQ software will generate accurately priced quotes for you in a fraction of the time it would otherwise take.
There are numerous reasons why your organization should adopt CPQ software. It helps you generate optimally priced quotes that increase your revenue. It also becomes easier for you to manage a large client base, with human error eliminated. And quotes can be sent to customers much more swiftly, improving their experience. Perhaps most beneficial of all? That your skilled salespeople can put their skills to work where they matter most.
