Beginners guide to CPQ

Beginner's Guide to CPQ

CPQ, or Configure Price Quote, is a digital tool that helps sales teams in crafting complex quotes efficiently. It's used for product offers requiring customization and pricing adjustments with each new quote.

The rising demand for CPQ

Used by large manufacturing firms for a while, CPQ software has seen a surge in interest from smaller businesses across various sectors, like SaaS and consulting, where pricing models and options create numerous potential customer offerings.

Many CRM platforms now incorporate basic CPQ features, allowing product and volume selections and CRM opportunity creation. However, precise pricing and quoting often rely on auxiliary tools like Excel or PowerPoint, increasing the risk of errors through manual data transfer.

Configuring with CPQ

CPQ's “Configure” aspect allows sales reps to tailor products or services to client specifications, ensuring precise, custom solutions:

• Sales reps can match products and services to client needs.
• Desired features and components are captured accurately.
• Company-defined customization options guide component selection.
• Rules govern feature combinations, bundles, and add-ons.
• Accessories for specific components can be included.
• Certain options may offer further customization.

Pricing with CPQ

The “Price” function in CPQ helps businesses calculate costs for personalized offerings, factoring in customer specifiac, target margins, and pricing strategies for consistent pricing:

• CPQ enables swift pricing model updates by adjusting parameters like discounts or markups.
• Company business models inform pricing rules.
• Automates price determinations for complex pricing models (tiered, subscription, volume, bundled).
• Pricing component includes setting base prices, discounts, and markups for components, customer segments, and product options.
•  Margin management and approvals maintain target margins.

Quoting with CPQ

“Quote” in CPQ generates personalized proposals, incorporating configurations, pricing, discounts, and terms, aligned with your brand and guidelines:

• CPQ software supports dynamic pictures and text, tailored to the configured solution.
• Pictures and text can dynamically change based on the selected configuration.
• Text can be pre-written yet adjustable or static, depending on predefined rules.
• The layout of quotes aligns with the company's branding guidelines.
• Dynamic elements enhance the visual representation of the configured solution.

Who decides on CPQ

What goes into a quote and how it is designed is usually a decision that includes multiple stakeholders in an organization:

• CSOs aim for clear, compelling quotes.
• CMOs ensure brand consistency.
• CFOs oversee accurate pricing and margin rules.
• CROs assess CPQ's revenue impact.
• IT managers focus on smooth integration and adoption.
• Product managers input on configurations and options.

Successful CPQ implementation requires early collaboration across these roles.

Integrating CPQ

Linking CPQ with ERP, CRM, and e-signing tools streamlines sales workflows, reducing administrative tasks and allowing a focus on personalized quoting.

CPQ's growing market

Gartner predicts a 20% annual growth for CPQ, indicating its value and expanding adoption across industries and company sizes.

If you're considering CPQ for your organization and wonder about its benefits, we're here to help.