CPQ Meaning & Systems
Estimated reading time: 6 minutes
Are you looking for a sales solution to digitally map and automate your quoting process? Find out in this article everything you need to know about the right CPQ solution and why a CPQ solution is essential in enterprise sales.
Everything important at a glance
We have summarized the most important information on the topics we will cover below for you. Get an overview, read more about the topics that interest you and feel free to contact us at any time if you have any questions.
CPQ = Configure (product configuration), Price (price calculation), Quote (quote generation)
CPQ is a software solution that helps salespeople configure products and create quotes based on specific customer requirements.
The biggest advantage of CPQ systems is the reduction of manual effort of (sales) staff and the digital mapping of pricing and quotation generation.
There are several signs when it is time to look at CPQ solutions – one of the most common signs is: the sales team needs (too) much time to create a quote
CPQ software is not only worthwhile for the manufacturing industry, but is also suitable for SMEs in all sectors, especially for suppliers of complex products and customized products.
CPQ software supports the users (in most cases sales staff) within a quotation process.
Definition: What does Configure Price Quote (CPQ) stand for?
The abbreviation CPQ stands for Configure Price Quote. Under Configure Price Quote you can imagine the process of a product selection up to the final sending of the offer. This quotation creation is largely automated with CPQ solutions. The products are predominantly multi-variant and customer-specific products and services that must first be configured and priced before they can be sold or quoted.
What is Configure, Price, Quote (CPQ)?
In general, CPQ is a Software solution that helps salespeople to create quotations based on specific customer requirements. CPQ could also be described as a relatively new trend that companies are using to increase the business value of their sales strategies.
Where does this trend come from? Sales structures have become increasingly complex in recent years and decades as a result of the digital transformation. For this reason, companies are looking for innovative solutions that reduce the amount of manual work and support employees in managing the growing range of products and services. Accordingly, sales processes must be made faster and more efficient. This is where CPQ or CPQ solutions and CPQ software come into play.
What are the advantages of CPQ systems?
For many companies and their employees, the process of preparing a quotation is probably one of the most time-consuming tasks in sales. At the same time, it involves a great deal of manual effort. The more complex the product you sell and the higher the degree of possible individualization of that product, the longer the process chain, the more complex the offer configuration and the greater the time required.
CPQ systems therefore offer you and your customers the following advantages:
Reduce ordering and processing errors
Improving quality in the configuration process
Shortened configuration, quotation and ordering times
Reduction of the required resources
Advantages for sales employees
Shortened induction and training period for new employees
Time saving for sales employees
Advantages for end customers
Predefined products or services as a basis for your own (product) configuration
Improved quality of individual product creation
Simplification of the creation of an individualized product
Support in the decision-making and configuration process
Improved tailoring of products to the needs of customers
When is it time for CPQ?
If you want to stay on the road to success as a company today, you need a CPQ solution. Recognizing the point at which this becomes essential is often not easy. Use these six signs as a guide if you are unsure. You can also arrange a meeting with us at any time to clarify any ambiguities about when it makes sense and is necessary to implement a CPQ system.
The sales team needs (too) much time to create a quote.
In recent weeks, deadlines for submitting a bid could not be met.
Business opportunities were not seized or were lost due to incorrect offers from the product configurator used.
Sales representatives need a lot of experience and knowledge to be able to create an offer.
The sales team is under pressure and tries to convince customers with excessive discounts – price calculation is difficult due to a lack of transparency and information.
The sales team has difficulty convincing the customer of the added value of the product. Offer documents are too technical, not all stakeholders involved understand them.
For which companies is CPQ software particularly suitable?
This question cannot be answered in one sentence because it is not an either-or question. Various points and criteria have to be weighed up individually for companies. For some companies, CPQ software is more suitable than for others. However, this does not mean that every company cannot use CPQ software if it is so desired. It simply means that implementation makes more sense for certain companies than for others, taking into account various aspects such as costs and product complexity.
CPQ software offers especially suppliers of complex products and customized products a major advantage. This is the guarantee that the configured products can actually be manufactured and sold at the right price. To draw the obvious conclusion at this point that such software is only suitable for producing companies would be wrong. CPQ solutions can calculate products and services of any kind by including all relevant data. This allows you to calculate flexibly and reliably at the same time. In addition, the quotation creation process can be automated and accelerated. In addition, there are various other functions that also give non-manufacturing companies a competitive advantage. For example, master data can be transferred automatically from one system to the other, saving you the effort of manual data transfer and avoiding errors that, in the worst case, cost you a lot of money.
What is CPQ software?
What CPQ means, which advantages there are, for which companies and at which time it makes sense to deal with CPQ systems and solutions has already been explained. Now we would like to explain more about CPQ softwares.
To make the distribution of variant and customer-specific products (or services) as simple as possible, CPQ software is required that fulfills the following functions:
Product configuration (Configure)
Price calculation (Price)
Quotation preparation (Quote)
CPQ Software supports the users (in most cases sales employees) within a quotation process. One software is at the forefront here: Salesforce CPQ.
Customized offers, tailored to the needs of the customers
The Salesforce CPQ (Configure Price Quote) solution is especially suited for companies whose products are highly configurable and have extensive product ranges. With seamless CPQ processes and automated end-to-end processes, companies can create more accurate quotes and contracts and accelerate the receipt of payments.
Salesforce CPQ can automatically configure products and services and calculate their prices, taking into account discounts, rebates, and upselling/cross-selling options. This procedure leads to a reduction in the error rate and also ensures significant time and cost savings. The solution enables fast and correct quotation generation. The software is hosted in the cloud – as is customary with Salesforce – and has seamless integration with the Salesforce CRM system. This means that employees outside the company can access the necessary data and functions at any time via mobile devices and respond to customer needs promptly and without restrictions.
Make it as easy as possible for your sales staff – with CPQ Salesforce.
Generally, the basic solution CPQ is also the most popular solution for 75 € (/month/user). Included is product configuration, pricing and quoting (CPQ) for teams of all sizes.
CPQ+ costs 150 € (/month/user). Here you get additional comprehensive customization options for your company, such as consumption-based pricing.
CPQ+ with Billing is a complete Quote-to-Cash solution that includes extensive automation and reporting, in addition to all the basic functions that are also included in CPQ and CPQ+. A quote is available upon request.
Do you have questions about the prices or would you like to learn more? We will help you at any time! As a Salesforce partner, we recommend the Salesforce CPQ solution. But of course we don't want to deprive you of the other possibilities. We will now introduce you to two further CPQ softwares.
What other CPQ software is available?
SAP has also developed a CPQ solution. SAP CPQ provides salespeople with an intuitive step-by-step process that simplifies the creation of complex customer quotes while protecting closing margins, reducing and eliminating errors, and streamlining approval processes through workflow automation. Integrated quote generation enables users to easily publish and send error-free quotes with a consistent, pre-approved brand image. SAP CPQ's key capabilities are configuration optimization, margin protection and growth, and seamless connectivity.
Another leading CPQ provider is camos. The features of camos CPQ 365 include guided selling, plausibility and completeness checks, explanations of rule violations, 3D visualization of the product, cross-selling and upselling (configure). In addition, in engineer-to-order calculation, extensive discounting options, intercompany pricing, release workflows and flexible adjustment of the calculation (price). In the "Quote" area, camos CPQ 365 focuses on customizable layout, versioning of quotations and multilingual quotation printing.
Do you still have questions about Salesforce or are you ready to go digital?
We will be happy to assist you in an initial consultation.