Revenue Amplification Platform
Accelerate deal execution
CPQ (Configure Price Quote)
Quote complex products
Streamline contract signings
Renewal, expansion, & upsell
Where buyers and sellers meet
What does CPQ mean and why is it important? CPQ stands for Configure Price Quote. CPQ is important because it simplifies the quoting process for configurable products. CPQ software helps sales organizations configure product offerings, set up pricing rules and discounts, and generate error-free quotes and professional proposals customized to buyers’ needs.
CPQ streamlines the sales process, reduces administrative tasks, and ensures the delivery of accurate quotes to buyers, which enhances the customer experience. Some advanced CPQ software solutions also track buyer engagement with the quote, monitor deal progress, and provide analytics on the sales process.
The key functionality of CPQ is the ability to configure the right products to sell to your customer, whether you offer simple or very complex products. CPQ software solutions automate the quote generation process, taking into account product dependencies, pricing models, and discount policies. Professional proposals are then generated to send to the prospective customer.
Configure Price Quote software encompasses a range of solutions: from very simple tools that allow salespeople to enter a product, select a discount, and generate a quote, to the other extreme which integrates with ERP systems such as shipping and inventory.
Using CPQ software simplifies selling and improves sales efficiency by guiding sales reps through the quote process using a sales playbook. The Sales Playbook tool within the CPQ guides selling workflows to keep deals focused on buyer needs and drive deals forward. Sales reps can select the right configurations for each customer to ensure pricing consistency, error-free quoting, and faster approvals.
A product rules CPQ template that simplifies multiple SKU variations into a guided question and answer process eliminates complexities and produces quotes that are easy for buyers to understand. Cross and upsell advice is built into the workflow, offering relevant, rules-based sales recommendations, so deals can be tailored to each buyer’s needs.
A CPQ with guided selling enables sales reps to create automatic pricing quotes complete with visual product comparisons, online visual aids, and audit trails. Sales managers can track all changes and actions taken as they happen.
Instant, high-quality professional quotes enable sales teams to expedite the quoting process, typically reducing it from days and weeks to minutes and hours. Sales reps and channel partner reps will be quoting like pros – with minimal training – and the personalized quote templates will help sales organizations maintain a standardized, professional company message.
CPQ solutions also address the issues of valid product configurations, pricing consistency, and quote approvals. Integrated approval workflows ensure key stakeholders are in the loop on quotes before they’re sent, which is crucial when special pricing or customized product offerings are involved. Once approved, CPQ solutions can also make sure sales quotes can’t be changed, whether by accident or intent after they’ve received approval. Sales reps can be certain that quotes sent to customers are fully validated and orders based on these quotes will not be rejected.
In 2013, Aberdeen Group surveyed 159 organizations to determine the sales processes and technologies that the top-performing organizations used to close deals. They learned that optimizing sales workflows with a CPQ solution provides tremendous efficiencies and advantages over manual processes. The benefits of using this sales tool to send quotes to customers are:
Using a CRM has become standard practice among organizations of all sizes to keep customer information organized and track sales opportunities. But, integrating a CPQ tool with a CRM helps organizations become more efficient and streamlines the sales process.
Many sales teams use optimal CRM solutions like Salesforce, Microsoft Dynamics, Sugar, HubSpot, and Freshworks, to assess leads and follow up with them, but then use stand-alone tools for things like sales quoting, price optimization, proposal generation, contract management, and playbooks.
Instead of having to use Microsoft Excel and Word for these sales solutions, a CPQ can turn them into a seamless part of the sales process.
CPQ essentially does the same thing as a CRM, just for different elements within the sales cycle. With a CPQ integrated natively within the CRM, sales reps can communicate with potential customers and send proposals in record time. When all sales processes are connected, the sales cycle never becomes bottlenecked, which increases the likelihood of a successful deal.
Studies show that companies that use CPQ solutions enjoy faster sales cycles. Reps can generate complex quotes promptly, respond rapidly to proposal requests, and avoid “indecision” sales losses.
A streamlined workflow results in faster quotes. A CPQ combined with the power of efficient CRM solutions makes a rep’s job much easier and reduces sales cycle time.
When reps are using CRM solutions and disconnected sales tools, the chance of errors occurring increases exponentially. Reps tend to waste time searching for pricing policies and sales materials because they aren’t part of the workflow.
Manual price quoting is inherently error-prone. When reps have to search through Excel sheets, price lists, and product documents to configure a quote, mistakes are bound to happen.
When the CPQ process is integrated with CRM solutions, everything meshes. Prices are updated in real-time, and the CPQ acts as a single source of truth about products, inventory levels, pricing, and discounting rules. Quote generation is part of a workflow that reduces errors and allows reps to create accurate price quotes and proposals and include supporting content assets with ease.
This impresses prospects, wows customers, and makes it more likely that reps will get an emphatic “yes” when it comes time to close the deal.
An often-overlooked benefit of CRM-CPQ integration is that it eases user adoption. There’s little to no learning curve when integrating a CPQ with the CRM platform sales teams already use. The CPQ process becomes part of the sales workflow. Even new reps with little experience will easily learn how to CPQ and will quickly realize that it makes their job easier and helps them close deals faster.
There are many reasons why organizations need to implement CPQ. Among them are:
When justifying the need for CPQ, consider the needs of the organization, the sales operations department, the sales team, and customers.
Sales Operations needs CPQ to ensure sales productivity and efficiency in the sales process, including quote and proposal generation, as well as sales rep training.
A CPQ ensures that each step in the sales process is carried out according to a standard playbook and that pricing and configurations are accurate.
Team members always have updated accurate pricing and discounting built into the software, so the quote generation process is error-free.
Organizations need CPQ for pricing standardization, quote accuracy, and corporate branding. CPQ enables sales teams to represent the company in a standardized manner in pricing, messaging, and the look and branding of the proposal. CPQ shortens the sales cycle by ensuring sales reps respond quickly to customers, produce quotes fast, and generate proposals that get noticed by decision-makers.
CPQ solutions include tracking and analytics to measure customer response to quotes and determine where quotes are stuck in the sales pipeline. Analyzing the value of quotes and the acceptance and rejection of deals helps improve revenue operations.
Further reading: 5 CPQ Features that Matter Most to Sales Operations Leaders
CPQ benefits sales teams by reducing the amount of time they spend on non-sales activities. A CPQ helps them respond faster to their customers with the right pricing, messaging, and marketing documentation while eliminating time-consuming administrative tasks.
CPQ ultimately benefits customers when they receive a quick response to their requests for quotes. They enjoy greater satisfaction with the sales process, and a greater sense of trust as well. Quotes are accurate and have gone through an approval workflow before being sent to the customer. Proposals include personalized content to help customers make sound business decisions. These factors are essential to a customer-centric sales process.
CPQ streamlines the sales process, which increases the efficiency and productivity of sales teams. Guided selling reduces new hire training time, decreasing time to value. When sales reps spend less time on administrative tasks and follow an intuitive workflow, they have more time to focus on building relationships with customers and selling.
Take a look at the positive impact of CPQ on Sales Operations:
There are preconceptions about the right time for organizations to consider CPQ. Organizations don’t need a certain number of salespeople before looking at CPQ or very complex pricing or configurations to see the value from a CPQ solution. There are more relevant factors to consider when determining the right time to implement CPQ.
Consider these questions:
CPQ is cross-organizational, so consider the needs of the different groups within the organization, including Sales Management and Operations, Finance, and Legal.
Determine what Sales Management and Sales Operations are trying to achieve. List the pains they are experiencing and the features that a CPQ solution must have to address those issues.
Sales Management and Operations will be concerned with issues such as:
What needs do Finance and Legal have that the CPQ solution will address? Consider how a lack of standardized pricing, advanced configurations, inconsistent discounting, and non-compliant contracts may be causing issues within your current sales processes. The CPQ should be able to solve those problems so every sales quote that is sent to buyers is accurate and compliant.
Further reading: 15 Tips for Choosing the Right CPQ Software
The great engineer and management consultant W. Edwards Deming said, “Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.” Utilizing a best-in-class CPQ, integrated with a CRM, allows sales operations to change their processes and achieve better results for their organization, their team, and their customers.
Aberdeen reported that by using a CPQ, best-in-class sales teams were better able to realize efficiencies in the following areas:
When choosing a CPQ platform for your organization, look for CPQ vendors that perform well in these areas. These guidelines will help you find a CPQ that will make a positive impact and help you meet your sales operations goals.