What Is a CPQ?

CPQ is the abbreviation for configure, price, quote: a software that helps sales to put together products and/or services to align with customer requirements, along with their costings or cost estimates. CPQ solutions help companies manage the prices of all their offerings so salespeople can generate quotes that have standardized pricing applying discounts when applicable. CPQ solutions can also help sales departments manage different pricing for different clients according to pre-negotiated terms, volume discounts, partnerships and other stipulations agreed upon by the company and their customers.

CPQ software can hold a lot of data including price sheets of the company and their competitors’. Its enterprise resource planning data has analytics that can help salespeople give the best quotes for their clients as the negotiation goes back and forth. Managers will be able to see the data and figure out if the pricing strategies are working for them or if they need to update to cater to both the needs of the business and the customer.

The great thing about CPQ is that is can blend with CRM and give your sales team an extra boost to increase their output. While CRM is used to gather data to better understand your clients’ needs and wants, CPQ adds value by creating the best quote for the specific needs of the customer to give them exactly what they want.

CPQ and business success

Many industries stand to benefit from CPQ tools:

1. Manufacturing: While there are standard items being manufactured, there are many companies that customize the products they manufacture to suit their clients’ needs, as well as shifting demands. CPQ helps them adapt.
2. Distribution: Because of the different prices of products and their different sales prices, distribution companies can have a pricing scheme that can match up to client alternatives and give them the best price.
3. Services: Many service industries suffer from cyclical and seasonal demands as well as fluctuations in supply, cost of labor, and other things. CPQ helps them manage all of the moving parts that they need to keep the business going and their customers happy with their prices.

But with so many tools and technologies available to sales teams, why do they need a CPQ? Overall, CPQ solutions help companies attain business goals, priorities,  and strategies to succeed. Here are the top ways CPQ helps in achieving company success:

1. Unifying CSO and sales rep goals: CSOs and sales reps represent two sides of the coin in the overall goal of sales. CSOs want new accounts, while sales reps want customer satisfaction. This dynamic happens because the top brass meets with shareholders while the representatives meet with clients, giving them different priorities. CPQ becomes the ideal solution as it can accelerate sales cycles of new accounts while personalizing selling, product, and service strategies to the prospect’s unique needs.
2. Increase in company revenues: The Sales Performance Optimization Study found that investing in improving sales team performance with tools like CPQ contributes to greater revenue performance within the company.
3. Tightens revenue pipelines: CPQ helps companies galvanize revenue pipelines as they provide better intelligence to the sales team, get rid of wasted hours, and eliminate incomplete, inaccurate and unbuildable products previously recommended. This technology can improve selling effectiveness and ensure better profitability.