What is CPQ software?
What is CPQ software?
Shorter lead times, better visibility, quick response to changing market conditions: more and more organizations are recognizing the importance of a Configure Price Quote solution. But what exactly is CPQ software?
More relevant than ever
CPQ streamlines complex quotation processes, creates more overview and strengthens your organization's competitive position. This is more important than ever in 2023. Drawing up quotations is often still done manually. For example, complex and error-prone Excel files are used to make calculations. Or quotations are prepared manually in Word, printed on paper or first scanned for further processing. Such a way of working is relatively slow and does not match the fast pace at which markets are developing. Time for an appropriate answer!
What is CPQ software?
CPQ stands for Configure Price Quote (=Quote). CPQ software is a technology that helps companies create sales quotes for their prospects. The price that should appear on the quote depends on a number of variables including competition, local economic factors and production costs. Especially with products and services that are highly customized, it can be difficult to quote properly. CPQ software is a tool to help you tackle this challenge so that your company can quickly produce accurate price quotes.
CPQ vs. CRM?
Customer Relationship Management software (CRM) allows your marketing and sales team to bring in more leads. Things often go wrong when the lead is interested and asks for a quote. Many companies still use very elaborate Excel sheets and a lengthy approval process that makes creating an appropriate quote take a long time and the potential customer drops out. CPQ basically begins where CRM ends.
Why use CPQ?
Many companies choose to use CPQ as their product offerings grow. When your organization offers a wide range of products or services, it can be difficult to manage and properly quote product prices. It is especially difficult to keep track of external factors such as special offers from competitors, let alone keep a clear view of their impact on the pricing of your own products.
CPQ software can also be useful for companies that need to calculate prices quickly. In situations where a salesperson needs to quickly create a quote for a customer, CPQ software automatically gathers all the important information so that the sales team can create the quote and contact the customer as quickly as possible. For organizations operating in rapidly changing markets, this speed is important.
Many international companies use CPQ because it allows them to quickly and efficiently send pricing data to hundreds of local stores. This assures headquarters that the products in their stores are priced correctly, without having to manually calculate the correct price for each item. CPQ can also help these companies detect and correct prices that cause the company to lose money. This helps them stay profitable.
Is CPQ necessary?
Not always. Many companies can manage pricing and quotations without using CPQ. Clearly, the software is useful in certain situations, such as for organizations with a broad product range and therefore a complex quotation process.
If you don't have thousands of products in your range, CPQ is probably not relevant to you. If your salespeople are able to prepare quotes for customers without making serious mistakes or losing prospects, CPQ will probably bring you only marginal benefits.
When deciding whether or not to invest in CPQ, you must weigh the potential benefits of the software against the costs. For a small company with a relatively simple product line, the financial benefits are unlikely to outweigh the cost of CPQ software.
Do you need CPQ?
If you're not sure if your company needs CPQ software, here are some questions you can ask yourself and your team.
Ask your sales reps if they ever run into problems making accurate price quotes. Do they succeed within the time frame the customer expects of them? Do these problems prevent the sales reps from doing their jobs? Does this cause the company to lose a lot of money?
Does the sales team use traditional methods? Do they spend a lot of time filling out Excel sheets to keep track of prices, quotes and products? Is there a manual approval process for offers and discounts?
Does your company offer a wide range of products and services? Or it is difficult to manage those products and maintain their prices? During the sales process, does the sales team run into things like:
- Different products from customer to customer
- Making accurate quotations
- Providing appropriate prices
- Keeping track of what has been done and what has not
- Giving discounts to valuable customers
- Create promotional offers and provide them to eligible customers, etc.
Also look at the cost of CPQ. Calculate how much the software can save you and ask yourself if it's worth paying for it. CPQ is a great technical solution for companies that need it, but that doesn't apply to every organization. Do you recognize the challenges we describe above? If so, CPQ may be the solution you need to streamline your sales process to create a better customer experience.
The best of both worlds: CaseNine CPQ
CaseNine CPQ combines Salesforce Industries CPQ with its own best practices to lay out a turnkey solution for optimizing the Configure Price Quote process for you. The result:
- A flexible quotation process
- Standardized discounts for target groups
- Faster time-to-market for new proposals
Thanks to our experience with over 50 complex Salesforce projects, we have all the expertise to help you get started and answer all your questions. Curious about the possibilities of CPQ software? Read all about it in the CPQ highlight series!
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