What is CPQ?

CPQ, or Configure-Price-Quote, software is a win-win for your business and your customers. It optimizes your sales process for faster, more accurate and more profitable deals. It personalizes your customer’s buying experience for faster, more efficient decisions that drive more repeat business. And it accelerates your time to quote while lowering your overhead costs.

Feeling left behind in the wake of this sales revolution? You’re not alone.

If you’re tired of spreadsheets and rogue sales reps discounting on the fly, of losing prospects because it takes so long to produce a quote, and errors that impact margins, then it’s time you learned more about the benefits of CPQ.

What is CPQ?

At its core, CPQ, or Configure-Price-Quote, software is a rules engine for automating the configuration, pricing, reviewing, and approving of complex sales quotes. By enforcing pre-programmed business rules, CPQ ensures error-free quotes that automatically take into account crucial factors. For example, optional features, locations, quantities, discounts, currency and revenue types. CPQ is often used in conjunction with CRM and ERP platforms to ensure integrated data use and accuracy across your sales ecosystem.

CPQ software covers a very broad range of features that span everything from the very simple to the highly complex involving millions of rules and dependencies. Businesses such as capital goods and manufacturing, energy and renewables, and business services implement a CPQ solution because it saves time, reduces costs, and delivers fast, efficient sales growth.  

CPQ Benefits for Businesses and Customers

Today’s buyers are savvy. They demand fast, personalized solutions and tend to buy from whoever responds first. Anything that slows down your quotes also reduces your chances of being first.

The traditional, manual quoting process relies on expert silos, repetitive effort, and disjointed systems. These obstacles introduce errors and corrections that slow down your quotes, increase your overhead costs and frustrate potential buyers.  

CPQ accelerates your time-to-quote without sacrificing the quality and accuracy buyers also demand.

• Fast, Accurate Configuration. Beat the competition to the table. Your complex business rules automatically guide your sales team in the selection of related and interdependent items. This reduces errors, expert reviews, and approval times, making you easier to buy from.
• Fast, Accurate Pricing. Ensure money is not left on the table. Your complex business rules also automatically calculate your pricing, including discounts and margin-based rules. This reduces underselling to protect your profit levels.
• Fast, Less Costly Approvals. Optimize precious expert time. Your complex business rules automatically govern reviews and approvals. By eliminating errors, you rely less on experts and spend less time fixing quotes. This reduces your time to quote and your cost per quote. 
• Fast, More Profitable Quotes. Increase deal value. CPQ also recommends complimentary products or services based on your business rules and your customer's needs. This promotes upselling and cross-selling that increases your average order value.
• Greater Visibility. Unblock profitable deals. Identifying blocked deals and buying trends no longer requires manual data gathering and compilation. CPQ automatically focuses sales team, partner, and supplier information into the big picture.
• Unconstrained Business Growth. Scale and grow. As your business grows, CPQ leverages your expert knowledge to keep pace with quoting demands and flatten the onboarding curve. This helps you scale quickly to enter into expanding or emerging markets.

CPQ Core Functionality

At its core, CPQ is a powerful, yet flexible rules engine. By centralizing your product, service and pricing data, and enforcing your business rules, CPQ automatically guides your team through complex quoting with little to no prior knowledge. For example, personalized solution combinations, pricing discounts and bundles, and quote document creation.

By removing manual, time-consuming process steps, CPQ reduces the time it takes to deliver professional, error-free quotes that convert buyers to customers, and transform customers to repeat buyers.

• Configure. Or, how the user selects and configures products and/or services to create a customer-specific solution. By guiding the user based on your data and rules, CPQ eliminates errors and increases upsell and cross-sell. It also flattens the learning curve so new talent can master your process and perform like the best, most experienced sales rep from day one.
• Price. Or, the capture and calculation of costs and/or prices for a given configuration based on business rules, price books, and currencies. This can also include the manipulation of those prices around mark-up, margin or discounting, and any approval workflows required.  
• Quote. Or, the presentation of the solution, including features, benefits, specifications and terms and conditions. Templates transform complex configurations into professional, on-brand and exported quotes in a matter of minutes, eliminating data and document compilation and formatting.

Advanced Features

Moving beyond the core functionalities, CPQ software also offers a wealth of advanced features designed to further optimize your sales process and elevate your customer experiences.

These capabilities further empower your sales team and business with integrated data for faster customer insights and purchase orders that unlock a new level of efficiency and effectiveness.

• Integration. Or, the connection between CPQ and your CRM and ERP systems. CRM integration helps sales teams personalize error-free quotes through buying behavior insights. ERP integration helps businesses manage their sales, quoting, and financial processes more efficiently.
• Self-Service. Or, purchasing availability when and where your buyers choose to engage. This includes secure partner or customer portals that enforce your business rules for greater buying consistency and speed. Businesses who pass these gains along to their channel partners also realize uplift with more accurate forecasting.
• Visibility. Or access to quoting activities across your organization, without compiling data and spreadsheets. By centralizing your quoting process, and your customer’s quoting journey, CPQ quickly delivers the big picture. This allows managers to track performance, identify selling trends, and monitor partner and supplier involvement.

CPQ Benefits: Lead to Close

The magic of CPQ doesn't stop at streamlining quote creation. Its impact extends throughout the entire sales cycle, empowering your team to excel at every interaction. 

• C-Suite. Focused on profitability and growth, this team looks to CPQ for analysis intel they can use to drive strategy and investments..
• Solution Architects. Focused on product refinement and realization, this team looks to CPQ to understand how different products can tie together and define new configuration options for sales.
• Pricing Analysts/Business Analysts. Focused on competitive pricing strategies, market share, and revenue goals, this team looks to CPQ to more quickly configure complex models and forecast against the competition.
• Procurement/Legal. Focused on pricing decisions and how they affect budget and legal positioning, this team looks to CPQ for insight into how sales makes pricing decisions so they can address disputes and reconciliation issues.
• Marketing/Lead Generation/Sales Enablement. Focused on brand and go-to-market strategies, this team looks to CPQ to establish consistent, yet flexible content and on-brand presentation for prospects.
• IT/CISO/CTO/IT Security. Focused on short and long term technology resource needs, this team looks to CPQ to forecast investments, control costs, minimize disruption, and position for growth.

Choosing the Right CPQ for your Business

In the crowded CPQ software space, there are a lot of options out there. To be successful, it is critical to choose the solution that best fits your business and the products and services you sell.

If you don’t have lots of products and services in your portfolio, or products with lots of options in your catalog, then CPQ is probably not a necessity for you. If you do, however, it’s not a matter of if, but when you will implement CPQ.

Based on our experience with large, global businesses, there are several factors to consider:

• CPQ Type. Some CPQ solutions have a wider range of out-of-the-box functionality and allow for customization, while others require custom development. Choose a solution that balances your needs based on time to first value, scalability, total cost of ownership, and vendor dependency.
• Ease of Use. The primary CPQ users are sales people. The goal of CPQ is to make it easier for sales people to accurately quote and quickly deliver quotes to prospects and customers. Choose a solution that empowers your sales team to hit their targets without sacrificing their autonomy.  
• Feature Mix. Most CPQ systems provide the basics, product catalog, rules and calculation engine, and quote development. Do you want to extend your capabilities by integrating CPQ with other business critical systems like CRM and ERP? Look for integration. Do you want to pass along efficiencies to partners and customers? Look for self-service portals.
• Perspective. As benefits are revealed, CPQ projects can quickly grow beyond their original scope. Know specifically what you want and what to look for to inform your decision. Prioritize and set expectations and milestones. Solve today's challenges with plans to scale for growth.
• Vendor. Demonstrations are a powerful way to experience how CPQ software can help your business. But it’s easy to get locked into a sequence of demonstrations that fail to address your team’s concerns, as well as a succession of “blockers” that stall your decision-making. Look beyond the demo and don’t be afraid to steer the conversation.

CPQ Business Impact

The traditional sales process, laden with manual tasks and prone to repetitive work and human error, struggles to keep pace with today’s dynamic market and buyer demands. Enter CPQ software, a game-changer for streamlining the sales process, boosting efficiency, and closing more profitable deals faster.

Just how impactful is CPQ software? Consider the industry research:

• 38% reduction in quote errors (Forrester Research)
• 20% reduction in sales cycle (IDC)
• 15% increase in win rates (TechnologyAdvice)

How are XaitCPQ Clients Realizing the Benefits of CPQ?

“XaitCPQ has reduced our time to quote by up to 50%, this significant improvement has enabled us to spend more time improving the customer experience and increasing customer satisfaction.”

- Mike Chesnutt, President at Fabtek

Equip your Sales Team for Success with CPQ

Time is money, and in the sales world speed and quality is the difference between winning and losing a deal. With each passing minute, your warm buyer becomes colder and colder as your competition begins to circle.

CPQ is a game-changer for any business seeking to streamline their sales process, boost efficiency, and elevate customer experiences. By automating product configuration, ensuring accurate pricing, and generating professional quotes, CPQ empowers your sales team to focus on closing more deals with confidence.

Related article: Learn how Fabtek improved speed of delivery for increased sales with XaitCPQ.