In this series, DealHub CRO and Co-Founder Eyal Orgil answers real questions from our clients about CPQ. CPQ Success Secrets begins with Eyal answering the question “What is CPQ?” and explaining how it benefits businesses today. It’s a must-see for any sales leader looking for ways to reduce the sales cycle and increase sales team performance. Check it out below.[Video Transcript]
What is CPQ?
CPQ is Configure Price Quote. Basically, what we’re talking about here is helping organizations, sales organizations, to configure products that they have. These could be very simple products or very complex products, but you have some sort of configuration that’s needed in order to go and generate a quote. You then need to go and price that solution, so you may have different pricing models, different kinds of discounting that you offer. And you need to be able to do that kind of pricing.
And then finally, the quoting aspect is to go and generate the document that you want for that specific proposal to send out to your customer. How does that document look? Is it a one-page simplified pricing summary? Or is it a very detailed document? And that will generally fall into the quoting aspect.
Key Attributes and Functionality of CPQ
The key attributes and functionality that you want to make sure your CPQ includes is first and foremost, the ability to configure the right solutions that you need to sell to your customer. You may have certain product dependencies or other attributes that need to go with certain products. You have to make sure that your CPQ can address that.
Then, from the pricing point of view, you have to make sure that you’re able to model the pricing for your specific products. It may be priced in different ways, under different circumstances. You may have different discount policies that you allow. Of course, you also need an approval process in there if you’re allowing your salespeople to go make discounts. So all that has to be included as well, within that pricing aspect of the CPQ. And then finally, the ability to go and generate the document that you need to send to your customer. Whether that’s a one-page pricing summary, or whether you need a very detailed overview along with the pricing to your customer, you have to make sure that you have that document generation capability built into your CPQ.
CPQ Vendor Relevance
There really is a lot of confusion out there about CPQs, and what is the right solution for you. CPQ really, if you look at how the vendors describe their solutions, covers anything from very simple solutions that allow salespeople to put in a product – they have to price it, provide a discount, total it and that’s basically their CPQ.
And then you’ve got the other extreme of CPQ, which are the very verticalized solutions, maybe from manufacturing or automotive, which are specialized in those areas, integrate with ERP systems with your shipping and inventories and all those different aspects. I think that’s a very complex area.
What’s important though, when you’re looking for a CPQ solution, is what is the functionality that you need today? What is the functionality that you’re going to need in the next 9, 12, 18 months? And then, when you’re assessing those CPQ solutions, look at what capabilities they have, are they going to offer you the capabilities that you need as you grow, as your team grows, as your capabilities and needs expand? Is that the right CPQ solution for you?
Gauging the Need for CPQ
I think there are a number of reasons why organizations need to implement CPQ and I think, you can sort of break it down into three different groups. You can look at it from the organization point of view, from a sales operations point of view and from the individual salesperson’s point of view. So if you look from the organizational aspect, things like standardization, are we representing the company in the same manner from both our pricing and in our messaging that’s getting out to the customer? We want to make sure that we have a standardized look that we’re presenting our organization to our customers.
From a sales operations point of view, there are a number of different areas. First of all, as organizations grow, you have new sales hires. Organizations have salespeople that with a lot of different churn. You have to ramp up those salespeople, how do you effectively do that? How do you get the right salespeople ramped up with the right information from a training point of view, as well? How you keep them up-to-date on what’s happening? How do you make sure your pricing and your configurations are accurate in those quotes that they’re generating? It’s very important for the organization.
And from the individual salesperson’s point of view, it’s how do you reduce the amount of time that they’re spending on non-sales activities? How do you get them to respond faster to their customers with the right pricing, the right messaging, the right marketing documentation that you want to get to them? So from all those aspects, basically, both the organizational sales operations and individual salespeople, I think there’s really relevant, important reasons why you’ll want to implement CPQ.
I hope you found this video informative and that it helped you understand what CPQ is and how it can help your sales organization. If you did, I’d love to hear your thoughts and any questions that you may have on CPQ. If you would like to learn more about DealHub or CPQ, we invite you to schedule a demo to see how CPQ can streamline your sales processes and reduce the sales cycle.