CPQ software aims to help salespeople close deals more quickly and accurately. This means increasing revenue and reducing costly errors.
But this isn’t easy. With complex products, a single pricing error can halt a deal. Salespeople hand off customer and product info to Revops, who sends it to finance for pricing.
Configuration Management
CPQ tools are designed to streamline product configuration, pricing, and quote generation. They can also generate CAD models and BOMs, automate engineering processes, eliminate manual data entry, and speed up sales-to-engineering collaboration. This can increase your business’s productivity, efficiency, and profitability.
Creating accurate and timely quotes is a complex process requiring input from multiple departments. A CPQ tool can simplify and accelerate this process, improving productivity and revenue.
Before deploying a CPQ solution, your team should develop and implement a plan to optimize the process. The plan should be based on critical business drivers like shortening sales cycles or increasing margins on every sale. It should also include a roadmap to identify and prioritize key initiatives.
Successful implementation requires buy-in from your regular employees and senior management. The implementation team should prioritize comprehensive user training to ensure that everyone understands the functionality and benefits of CPQ. They should also provide documentation and support to help them achieve success. Additionally, they should be transparent about job role changes and the resulting impact on their workflow.
Pricing
CPQ software, or Configure, Price, Quote software, streamlines pricing calculations, identifies workable product assemblies and enhances each configuration for improved engineering efficiency, profitability, and customer satisfaction. This fosters better collaboration between engineering and sales, expediting the time it takes to bring new products and services to market. In essence, CPQ software meaning lies in its ability to automate pricing, determine viable product assemblies, and optimize configurations to enhance various aspects of the business process.
3D visualization, Virtual Reality, and Augmented Reality features deliver a lifelike, engaging configuration experience that wows customers, increases product understanding, and boosts sales. A no-code rules engine empowers non-technical users to set CPQ logic and constraints, minimizing development costs quickly. A centralized, flexible data model is the foundation for a unified CPQ platform and provides a single source of truth that enables quick and easy integration with existing systems.
A CPQ system eliminates manual product and pricing data errors, streamlines the quote generation process, and allows for more upsell and cross-sell opportunities. This results in a more consistent and streamlined customer experience and faster response times, ultimately increasing customer retention and revenue growth.
Quote Generation
A configurator should be able to identify the ideal products and services to meet a customer’s unique requirements. It also needs to be able to generate a quote that includes all the information required to complete the sales process, including terms and conditions.
CPQ solutions can help automate quotes by reducing the number of manual steps that need to be taken. This allows companies to deliver quotes almost instantly and reduce the time it takes to close a deal.
A CPQ solution also makes it easier to manage complex pricing structures. You can set up nested bundles, discount schedules, and other rules like quantity discounts and price tiers. The software can then automatically apply these rules to any product configuration or bundle and generate an accurate quote. This eliminates rogue discounting and ensures all prices are based on a company’s policy. It can also make it easier to manage renewal processes, boosting customer loyalty and lowering churn rates.
Negotiation
In addition to improving a sales team’s ability to deliver accurate quotes, CPQ enhances how business proposals look. Rather than a messy spreadsheet, a quote is created with a clean and professionally formatted page, making it easier for a customer to read and understand the proposal.
In the case of configurable products, there can be many pricing rules based on BOM characteristics, production costs, optional features, or a combination of these factors. CPQ can automate and apply these rules to configure an order’s price in real time.
This saves sales reps time, giving them more time to focus on the customer experience. This is key for companies that sell a product that customers customize to their unique needs and preferences.
Order Management
When CPQ tools are implemented, generating and delivering quotes becomes automated. This allows for a more streamlined workflow and eliminates bottlenecks in sales, engineering, and legal departments that can slow down the delivery of accurate quotes to customers.
The final C in CPQ is ordering management, which enables businesses to give choices to customers efficiently while ensuring that these choices are profitable. This is accomplished by creating rules that determine what combinations of products and services can or cannot be ordered, which options are bundled together, and which accessories go with particular components.
This complex task involves a significant change in processes and workflows. Successful implementation requires buy-in from regular employees and management, a clear business case demonstrating the benefits of CPQ, and training tailored to each group’s needs. CPQ can provide powerful tools to help B2B companies create a more personalized buying experience for their customers while accelerating their sales cycles and increasing win rates. It also helps companies reduce margin erosion and rogue discounting by preventing product discounts from being unnecessarily lowered to win deals.
