CPQ stands for configure, price, quote and is a software that enables sales reps to win deals by shortening and simplifying the process of generating sales quotes.
Take these two stats into consideration:
The buyer journey may be long, obscure and complicated, but by the time a prospect engages with a vendor, speed in the flow of information is critical. A CPQ tool helps with that: a quick turnaround to create a price quote.
In this blog post, we’ll look at the most common questions around CPQ:
There are multiple benefits for using a tool that automates customized quotes, but here are the top three:
(source)
Every CPQ tool has its own features and variations, and every vendor will have nice looking infographics with the full journey. But there are three key components, (hence the acronym):
The first component will be a product library or catalog to configure your products and services. Without a CPQ, most sales teams use a google spreadsheet or excel that lists all their products and services including product descriptions, product number, price, etc.. When engaged in putting together a proposal for a potential customer, a salesperson would copy paste the information from the spreadsheet into their manually created pricing table to create a solution or a package they want to offer. CPQ acts as guided selling, helping a salesperson selecting the products/services from a product library to create customised solutions for buyers.
Every company has its own pricing strategy. Pricing is also impacted by a lot of variables. A CPQ tool will automatically calculate prices from the different products & services added to the proposal, taking into consideration any discounts or expenses (like VAT) added in the mix. For highly customized solutions, this saves a lot of time for sales reps (and potential errors in calculations).
The configure, price, quote software will then generate a final quote, taking into account all the different variables. This will be the investment required for the potential customer. Some CPQ tools would also allow buyers receiving the business proposal to fill in themselves the quantity of units they would want for each line item, and the software would then automatically calculate the final price.
More advanced solutions will have images incorporated within the product library. Sometimes 2D imagery or drawings, but some offering even 3D visualisations of products. This is more common in sectors with high volume of SKU's like retail, commerce and manufacturing.
End-to-end solutions will have a feature for seamless renewal processes that generate quotes for existing customers to try and lower churn. This also needs a bit more advanced pricing conditions to take into account-based pricing and loyalty discounts as well as upsell/cross-sell opportunities.
One of the benefits of having a configure, price, quote solution is the control it gives to sales leaders and sales operations managers in the sales cycle. Gone are the days when account executives offer crazy discounts. A CPQ tool will not only have limits on discounts, but some of them will have approval workflows to get sales managers to sign off on a discount before the quote can be sent to a customer.
To really make life easier for sales reps, some solutions offer a guided selling feature. In short, it will recommend products and services to sellers as they start adding from the product library based on the first initial products they select as well as on historical data; it would also inform account executives who inadvertently select incompatible products in one solution.
Yes … and no.
Most CRM’s will have a CPQ function as part of their overall solution, the most famous one being Salesforce CPQ. This means that a rep can create a proposal and generate a quote without ever leaving the CRM.
There are also a lot of standalone solutions for those that don’t use a CRM, but also standalone solutions that integrate with your CRM, meaning that a salesperson would still be able to complete most, if not all, of the sales process from within the CRM.
Head over to G2, Capterra, Trustradius or other review platforms looking for the best CPQ solutions, you'll notice there are a lot of options.
So what are the best tools to generate quotes?
To help you out, here are 5 tools to consider, each unique in their own sense:
Salesforce needs to no introduction, as one of the leading and fastest growing CRM's in the world. And in 2015, it acquired SteelBrick to add a configure, price, quote element to its solution whose top features include:
As the second largest software vendor in the world, it's no wonder that Oracle is in the CPQ business as well. The tool has a strong reputation for:
3. Conga CPQ
Apttus, a leader in quote-to-cash solutions, acquired Conga in 2020 to offer a full end-to-end solution for account executives. Some of the most appreciated features:
4. QuoteWerks
QuoteWerks is a specialised COQ software that can be used in every industry to create sales quotes and proposals. Some of its top features include:
5. GetAccept
GetAccept is a digital sales room that helps revenue-driving teams engage and understand customers to hit quotas. Some of its most popular features related to CPQ are:
The quick answer: CPQ simplifies the quote generation process, so it is for you if your current process is complex.
If you struggle with any (or several) of the following:
Then having a tool to automate custom quote generation will be beneficial. When looking at the solutions above, it's also important to consider what level of complexity you need from a CPQ tool.
The more products or SKU's you have, you will need more advanced features to create approval workflows and calculate complex prices.
However, if you simply have a large sales team and/or high volume of proposals sent but a smaller product catalog, then you will want a simpler, easy to use solution (that has a good integration with your CRM).
CPQ is all about efficiency. Make your sales cycle more efficient, but not at the expense of your account executives.
Do like 25 000+ sales professionals and subscribe to our monthly newsletter to receive the latest sales trends, invitations to events and webinars straight into your inbox.
Zero spam! Unsubscribe at any time.
