Sales teams realize that most of their time doesn’t go into selling. Research has shown that sales reps spend 66% of their time on tasks such as data entry and writing price quotes.
They waste time on spreadsheets and use outdated tools to create generic or incorrect quotes.
There is an easier way.
CPQ (configure, price, quote) applications are essential for growing your business. Some companies see the CPQ process is critical to their "quote to cash" process.
The best quote-to-cash software for your business will depend on many factors. We discuss these in this article.
These applications allow sales teams to move from spreadsheets into an automated tool that generates accurate price quotes. They can help you sell the right product combination, manage discounts, and automate approvals.
They make it easier to sell products, control discounting, and organize sales processes, allowing you to close more deals from any location.
While configure, price, and quote (CPQ) software has been around for decades, it represents the latest wave of sales optimization tools.
What is CPQ Software?
CPQ allows companies to quickly and accurately create price quotes for orders. CPQ-software often works with customer relationship management (CRM) platforms and other business technology to ensure accuracy and integrated data.
CPQ software generates price quotes according to pre-programmed rules. This ensures that pricing is accurate and considers discounts, quantities, customizations, options of products, multiple revenue types, and incompatibilities.
Sales reps spend only 34% of their time selling. Research has shown that a significant portion of the time a salesperson spends not selling is spent creating price quotes, proposals, or gaining approvals.
Some benefits of Configure, Price, Quote software, when implemented properly, are:
- 10 times faster quote generation
- Reduced approval time by 95%
- Twice as fast to go from quote-to-cash
- 30% faster ramp for new reps
- CPQ reduces sales bottlenecks
Many companies see CPQ software as a useful tool due to its functionality and excellent return on investment (ROI). Companies will continue to adopt CPQ software as they realize the benefits for their sales teams of using it with their CRM system.
CPQ Software Removes Many Sales Obstacles
Even when you realize the benefits of a CPQ, you may believe your current sales process is sufficient. But, even if you think your sales process is sufficient, keep an eye out for these six signs you may benefit from CPQ:
- You're using legacy price quote configurators.
- Your ability to grow revenue is exceeding your ability to function.
- You're building a recurring revenue stream.
- You find it important to have practical methods for implementing advanced business solutions like software with artificial intelligence.
- You're sending inaccurate sales quotes to prospects.
- All sales quotes are manually reviewed by someone.
C - Configure
One size doesn't fit all. Good salespeople guide customers to find the right mix of products or services to solve their problems.
CPQ software allows sellers to create unique combinations based on company size and other relevant factors. You can even add on additional training, extended service contracts, or complementary products.
P - Price
What percentage of your sales are at list price?
You might offer volume pricing or special bundles. Or maybe extra discounts are available to sweeten the deal. It's difficult to keep track of the current pricing and discounts allowed.
CPQ allows you to manage the pricing of all your products or services. Advanced pricing rules can also be created to manage volume discounts, percent-of-total subscriptions, pre-negotiated contract pricing, or channel and partner pricing.
Q - Quote
Sales reps should focus on closing once they have provided a price quote. A pricing error or poorly formatted quote document can cause them to lose a deal.
Reps who create quotes by hand risk making mistakes, mismatching fonts, and other errors that could lead to prospects thinking the rep is not professional or caring.
Using CPQ, a sales representative can quickly create a quote and send it to the prospect via email. You can also include e-signature options in order to close the deal more securely and conveniently.
Why is CPQ Technology Used?
More reliable and faster product configuration:
CPQ software makes it easy to manage even complex products and eliminates incompatibilities. Most CPQ software providers address these challenges.
Streamlining sales:
An order can be completed and sent into production within minutes, rather than taking several days or even weeks.
Standardizing pricing:
Because we build pricing into the software, sales teams no longer have to worry about complex pricing structures. This reduces overhead and speeds up training.
Improving customer happiness:
CPQ software allows customers to get high-quality, well-documented quotes that are easy to execute.
CPQ Software Can Improve Your Sales Efficiency
Configure, Price, Quote software help experienced reps become more productive. It also makes it easier for newer reps to be more productive. CPQ software can help reps with lead management and create additional configurations or suggest add ons such as training sessions, extended service contracts, and complimentary products.
CPQ software can determine your standard pricing and provide guidance to reps on how to add line items or packages discounts. Sometimes, reps can enter clients' budgets and the software will calculate individual product discounts that correspond. You want quotes that provide better value.
CPQ also generates a quote that is ready for your customers. These documents can include your branding, formats, cover pages, and tailored cover letters. They can also contain marketing materials and terms and conditions. This saves reps both time and energy.
The Traditional Quoting Process
These are the steps that a sales team would follow in a traditional selling process:
- Determine which products are the best, and what configurations are necessary.
- For the base price, consult pricing documentation or static systems.
- Find eligible discounts and apply them manually.
- Wait for approval if you request a large discount.
- Create the final quote document to be sent to your customer.
Risks With Traditional Quoting
Scale
It's difficult to scale legacy processes that don't lend themselves to scale. Businesses that consider new sales models and recurring revenue will often find those business rules to be a bottleneck. It is often difficult to implement change to legacy processes.
Data and Disconnected Processes
We often separate traditional quoting from customer data. This makes it difficult for sales reps to deliver the best value for your products or services. Revenue teams waste time matching revenue numbers with what's actually in the contract.
This delays revenue recognition. And we often lose the full picture when these decisions are made. Service teams must spend more time researching the rights of customers under their contracts and ensuring that you deliver what we agreed.
Lost Time & Money
Manual quoting is time-consuming. Sales reps should spend their time finding new customers and landing them more clients. With the right tools, it is possible to reduce the time required to produce an accurate price quote.
Signs It is Time to Switch to CPQ
Spreadsheets and homegrown systems are slowing down your sales cycle.
It's time to get rid of spreadsheets and other legacy software that you used to create price quotes or configure products. You risk making mistakes, wasting time, and limiting your ability to scale your business by using outdated software.
Your ability to grow revenue is increasing faster than your ability to function.
Your business will grow, as well as the sales quotes that you generate, and the time that your team spends generating them. To keep up, you need to save time.
Prospects are receiving inaccurate sales quotations.
Whether the pricing is incorrect or the configuration of your product is not optimized, it is unacceptable to send out inaccurate quotes.
Someone must manually review all quotes.
It may be possible to have someone look at sales quotes to verify the accuracy, but it is not sustainable. What happens if the person is sick or goes on vacation? Are approvals withdrawn? Can a temp learn to replace the boss? CPQ software automates the process and increases speed and accuracy.
You are creating a recurring revenue stream.
Customers are looking for a strong relationship. This requires you to provide excellent customer service and a sales model that meets modern demands. Customers today are more inclined to subscribe to services and terms that allow them to move at a faster pace. You must use your customer data to meet your customers where they are in order to grow.
CPQ Improves the Accuracy and Speed of the Sales Quote Process
What are the Main Advantages of Using CPQ Software?
Sales reps may have to dig through spreadsheets in order to find the correct pricing rules. This can make it difficult to deliver timely quotes. CPQ eliminates the conflict between sales reps and customers by clearly implementing pre-programmed rules.
Using a CPQ application, you can specify any configuration, price, discount, or scenario. This makes it easy to create product options and configurations based on your company's capabilities.
The rep then creates the quote.
It is easy to deliver quotes quickly using a custom template. This takes just minutes. It automatically sends the quote to the parties for approval, reducing the waiting time.
Reps can create a price quote they are confident in. They don't need to wait for approvals and can use the quotes immediately to help drive their deals.
CPQ software makes it easy for the sales team to quickly deliver quotes thanks to a streamlined quoting procedure. This is because of the CPQ automation's customized pricing rules. This is especially helpful to companies that have subscription pricing or other revenue models.
Companies can benefit from a standardized process with CPQ software
- Control of pricing and discounts
- Multi-currency support
- Subscription pricing, contract pricing, and channel pricing are also known as recurring billing and usage-based pricing.
- Advanced discounting and approval workflows
CPQ software can also handle repeat orders and subscriptions. It auto-generates renewal quotes and applies existing terms and conditions to add-ons.
CPQ automation considers complex configurations, bulk pricing, discount rules, and other factors. This automates the creation of personalized quotes that are easy to create and deliver to customers quickly.
Your company will be more efficient and knowledgeable if you can quickly provide a sales quote. This will allow the deal to slide through your sales pipeline. Customers will see your company as a partner who is interested in their success.
CPQ Software Helps Departments Collaborate
This solution is brilliant for salespeople to create quotes. However, CPQ has a wider impact on efficiency. CPQ software has the advantage of allowing the entire company to take part.
When you deploy CPQ software correctly, sales, renewals, and finance can all seamlessly take part in defining different configurations. This means that you won't have salespeople trying to sell configurations that aren’t financially or legally possible.
CPQ allows you to create bundles and configurations that make sense. Instead of having salespeople determine configurations, the subject expert (SME) on the product can help you decide the best configurations and options for your customers.
We then enter these configurations into the CPQ system to be used as rules by salespeople to offer customers the best options. Everyone wins when cross-functional teams collaborate. Your product will be customer-centric and solution-oriented.
Although the sales department is most likely to be the main user of CPQ software, it's not limited to them. CPQ software can be optimized to benefit all employees. Your teams can also use CPQ analytics for product trends and demand analysis to ensure successful deployments.
Integrate CPQ Software With Other Applications
Sales, finance, legal, and manufacturing are often very distinct entities that are kept separate within an organization. CPQ software is a bridge between departments that allows communication to take place and standardization to be established. Because most configure price and quote systems run on a cloud platform, integration with other systems is easily done.
Signing a quote marks the beginning of a series of events that brings together all the company's departments. Every detail required for downstream teams lives within a quote. Therefore, a CPQ system should be used. It helps reduce errors and makes it possible to move on to the next step.
Once the customer signs a quotation:
- An order is created.
- A bill is sent.
- Payment is received.
- Revenue is recognized.
- Audit trails are analyzed.
- Orders are fulfilled.
Each department will be affected by how accurate your quote is. CPQ software is compatible with your existing business technology, making the entire process more efficient.
A CPQ Solution Can Improve Efficiency
Salesforce Research's State Of Sales report shows that only 34% of salespeoples' time is spent actually selling. This includes meeting customers in person and connecting with them virtually. Prospecting is also a significant part of the sales cycle. These numbers point to three key concepts:
- Salespeople will spend more time with customers and making sales if their processes are more efficient.
- It's a plus to have time available for customers and sales.
- Salespeople must be able to make informed, effective sales calls.
Customer Relationship Management (CRM) applications allow users to do in-depth research and take notes, making it possible to make great calls. Access to sales enablement information and documents allows you to help the customer navigate their sales journey and present your company as an expert and trusted advisor.
CPQ software facilitates the smooth transition from the sales journey to the final sale. Your CPQ software allows you to accurately design products, apply quantity discounts and price adjustments, and use pre-programmed approvals.
Automation makes you appear like a real sales professional and gives customers confidence in your company's processes.
Save Money & Increase Revenue
Although business software applications such as your CRM platform, knowledge management systems, and web conferencing tools allow for more efficient sales processes than ever before, CPQ applications can have a significant impact on the efficiency and revenue of the company.
CPQ allows sales teams to concentrate on selling and replicating the best sales practices, rather than constantly retraining staff.
Sales professionals will see an increase in their success and a rise in company profits when closing sales is easy.
The ROI of CPQ
CPQ is more than just a sales tool. It applies to all aspects of your business and your customers.
Your customers:
CPQ makes it easier for your customers to get quotes quicker. CPQ allows sales reps to track which customers are eligible for discounts, so they can offer the best pricing options and ensure that customers get the best value.
Customers will appreciate receiving proposals that include the right product configurations and bundles.
Operations and Technical Teams:
When quotes include incorrect product configurations, both technical and operations teams have to clean up. Using CPQ allows reps to create accurate sales quotes every time. This makes it easier for operations.
The Quote Approval Team:
Your company might have one person who reviews quotations during the sales cycle to ensure correct product configurations, and another who reviews them for accuracy in pricing. These are never-ending tasks, and your company will grow to have more people responsible.
CPQ allows you to enforce your business rules regarding pricing and configuration. This will allow you to automate their expertise, saving time and allowing them to focus on more important tasks.
Your Sales Team:
With CPQ, your sales team can create professional proposals and quotes. Your sales reps will love the extra time they have to prospect, create leads, and close more business.
Finance:
CPQ will reduce the amount of hassle your finance team has to deal with. The right permissions will be baked into the system. This will make it easier for them to focus on strategic tasks.
How to Select the Best CPQ Solution for Your Business
How do you choose the best quote-to-cash software from the CPQ software market once you have decided that CPQ is right for you? These are the questions to ask:
Can it scale?
A platform you already use (think CRM) will give you a better CPQ solution. Pre-configured, out-of-the-box features and workflows are key to achieving your most common uses cases.
The best CPQ solution scales with your CRM so that growth is not a problem. You shouldn't have any worries about CPQ integration being broken when your CRM is updated.
Flexible solutions are also important so that you can add new products or pricing later on.
Can it support multiple revenue models?
More companies are moving to recurring revenue models. This means that they charge customers on a regular, predictable basis for ongoing services. Think Netflix or Amazon's Subscribe & Save. The best CPQ solutions, as well as many other revenue models, can adopt this strategy.
Is it practical and intelligent?
Smart approval processes should support series-based and tiered approvals. Pricing intelligence should allow you to price based on customer budgets, and then apply discounts across all line items. Some systems will even suggest pricing that increases the chances of a sales rep closing a deal.
What is the implementation plan?
Your sales team should find CPQ to simplify their lives. The implementation is the first step. Be sure to review references and talk to customers who have used the same CPQ solution before you make a decision.
- How was the experience?
- How simple was the implementation?
- How did they get support during deployment?
- Was the vendor responsive?
- Are there any excuses or promises that were not kept?
These questions will make a difference in whether you go live quickly or feel frustrated by an endless implementation.
6 CPQ Software Solutions to Consider
Below are some CPQ software solutions that are robust and have many implementations. The CPQ software vendors that manage these solutions are all experienced and reputable. Each solution has its strengths and weaknesses, but these can all be safely recommended.
In order to be included in this list, each package must include the following features:
- Include features for the basic activities of the configure price, quote lifecycle. Configuration logic for the offering, custom and standard pricing, and quote tracking.
- Give information to salespeople so they can quickly create offers that benefit both the customer and the company.
- Allow users to set up workflows that allow them to create, change and send different quote documents.
- Allows the use of CRM software and other enterprise data to create and manage product catalogs, including pricing and bundling, for hundreds of thousands or more products
- Analyze the financial rules, pricing, and costs of customers to determine whether each offering is profitable. Also consider external factors such as competitors, market changes, or laws and regulations.
- Integrate with other solutions downstream to gather and analyze data for better pricing and upstream to propagate new prices into other solutions like e-commerce.
- Assist users in analyzing and reporting throughout the whole quoting process. Also, provide data and suggestions for improving the process.
Sculptor CPQ
A product of Twistellar, a world-class software development company, Sculptor CPQ runs on the Salesforce platform and is an App Exchange product. Sculptor was designed for companies that need the CPQ functionality, but don't need the complexity and high prices of Salesforce CPQ or Oracle CPQ.
Sculptor CPQ is easy to configure, and a basic implementation can be completed in one day. It uses the standard Salesforce data model and objects and provides deep customization capabilities.
Sculptor respects your data and doesn't damage or heavily change your Salesforce instance. It can be uninstalled as easily as it is installed.
- Clean, easy to understand visual screens
- Highly flexible, yet not overly complex
- Comparatively affordable
- Respectful of data - easy to install, easy to uninstall
- It Runs native on your Salesforce instance
Salesforce CPQ
Salesforce CPQ is a sales tool that allows companies to accurately price any product configuration. CPQ applications allow sales reps to quickly and accurately quote prices by considering customizations, quantity, discounts, and optional features.
Salesforce CPQ makes it easy for sales teams to use and is accessible on any device because it's a cloud-based platform. It is hosted within the Sales Cloud platform, giving you direct access to your CRM to make the best sales decisions.
- A Salesforce product that runs seamlessly on the Salesforce CRM
- Sophisticated, with the ability to create highly complex rules
- Expensive
- Significantly alters your Salesforce instance, changes your data
- Difficult to uninstall
DealHub
DealHub.io is an award-winning revenue platform that offers the most complete and connected revenue workflow capabilities. The zero-code platform empowers sales teams to move leads down the funnel together with closing new and subscription business from anywhere.
- Connect all sales solutions into one fluid platform
- Manage opportunities and automate the production of sales collateral for sales teams
- Provide customers with fast and personalized proposals
- Moderately expensive
- Runs independently of CRM platforms
PandaDoc
PandaDoc allows businesses to manage and submit quotes. Its purpose is to improve workflows and provide insight into the selling process for companies, as well as to create a positive customer experience. The platform is easy to use and elegant in the user experience.
- Unlimited legally binding eSignatures
- A wide range of pre-built templates for proposals and quotes
- Integration with many CRM platforms
- Affordable
- Content library
Oracle CPQ
Oracle CPQ, guides customers through the order to cash process. This includes entering a properly configured and detailed purchase order. After a properly configured order has been entered, the CPQ solution will provide a price quote that includes all applicable discounts, terms, and conditions.
The customer can accept the quote, and it becomes an order. This solution increases order accuracy, reduces sales cycles, and lowers operational expenses. It's the only configure, price, quote system that connects the back- and front-office.
- Enable self-service sales and eCommerce with proven performance
- Automated configurations
- Real-time pricing
- Expensive
- Document designer
Infor CPQ
Infor CPQ is an enterprise CPQ package that can help drive revenue growth, build a stronger brand, and increase seller effectiveness.
Infor has paired Infor CPQ with its proprietary Infor Coleman AI and Infor Birst analytics. This is a full-featured, enterprise-grade solution for larger companies with more complex selling processes or products.
The Bottom Line
IT and SMEs need to oversee the configuration of any CPQ package and the design of the rules. This will ensure a smooth deployment and implementation. Once the CPQ package is deployed, it should be supported to ensure that the staff is trained and supported in using it for the sales tasks and functions. CPQ is a great way to save time and increase accuracy in quotes, as well as to land more deals.
You can count on a well-selected and well-implemented CPQ package to improve your business.
Enabling Sales CPQ in Your Business
Asymmetric, led by former Army Delta Force operator and corporate executive, Mark Hope, can help you implement these ideas in your business. You can contact Mark by email at mark.hope@asymmetric.pro, or by telephone at +1 866-389-4746, or you can schedule a complimentary strategy discussion by clicking here. You can read all of his articles on Medium.
Mark Hope
Mark A. Hope is the founder and CEO of Asymmetric Marketing – a unique agency specializing in building high-performing sales and marketing systems, campaigns, processes, and strategies for small businesses. Asymmetric has extensive experience with organizations across many industry segments. If you would like some help in implementing ideas like these in this article, feel free to give Mark a call at 844-494-6903 or by email at mark.hope@asymmetric.pro.