Author: Bill Thane
CPQ stands for Configure, Price, and Quote.
CPQ software solutions assist companies in automating the capabilities to configure products, look up pricing, and generate quotation or proposal documents. This technology as a software application began in the 1980’s, and became more popular in the 2000’s. Now there are over 60 software vendors offering CPQ software.
Additionally, companies over the years have developed and built in-house solutions utilizing the pricing data, product configuration rules, or applications and document generation tools.
(Watch this video to learn more about CPQ)
What Does CPQ Do?
CPQ applications are often used as an extension of the customer’s CRM system. There are occasions where manufacturers do not utilize a CRM system but still can use CPQ for their configuration, pricing and quoting needs. CPQ stores and accesses product data, pricing data, and data utilized for quotations to largely automate those processes and ensure 100 % accuracy. Most of these systems have a “rules engine” that allows the user to mimic their company’s business, pricing, product, quotation and approval rules. Many of these systems have a built-in document generator or allow for a third-party document generator to be used. CPQ solutions may also offer email capability to send proposals or to request approvals from internal users as well.
What’s an Example of how CPQ is Used?
Company A is a manufacturer, and sells equipment to Company B, a construction company. CPQ would allow Company A to quickly turn around
a quote, despite their complex pricing model and product configurations, by:
- Automatically taking the customer information from their CRM system, and transfer it to the CPQ application to determine pricing, populate customer information etc.
- Offer special pricing or discounting on the products to be sold if there is a business rule, even if some products Company B is purchasing can be discounted, while others can’t be.
- Allow for the entry of dimensions and pertinent information for Company A’s equipment so that the CPQ system could automatically select the best product with the closest dimensions.
- Create a professional and customized quote for the customer without any additional entries for customer information, pricing or product.
- By automating these processes, the quoting process could be reduced from 8 hours to 15 minutes!
How Do I Know if I Need CPQ?
If you feel that your sales cycle is too long and the process is causing you to lose sales, then you may need CPQ. In today’s market, the customer experience is at the forefront of a sales organization’s success. If they have to wait for a rep to dig through product configurations and turn around a quote, then they may start looking elsewhere. The first company to “answer the call” is more likely to close the sale.
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Canidium can assist you in many phases of your project including the review of your company’s current quoting solution. Click below to speak with an expert.