CPQ, or Configure, Price, Quote, is an integrated process that salespeople use to generate sales quotes. Salespeople can create complex commercial offers using a configurator with AI pricing without compromising precision or fairness. Manual quoting is time-consuming and error-prone. A CPQ solution eliminates these errors to save salespeople time and money while improving customer experience.
CPQ Basics
CPQ software is designed to streamline sales by automating many steps in configuring and pricing products. It enables a business to create personalized prices and quotes for each customer using codified product and pricing information. It helps to increase sales win rates, provide a consistent buying experience, and generate more upsell and cross-sell opportunities. A CPQ solution operates alongside CRM platforms and can be configured to work with other customer experience tools. Its features include a guided sales process for front- and back-office employees. It also provides a faster, more accurate way to configure and price a product. It translates into reduced administrative costs and time spent on repetitive tasks and improved revenue for the company.
Nesting bundles, a rules engine for determining discounts and promotions, a customizable product catalog, and an e-signature tool are just a few of the features that may be adjusted to suit the requirements of each organization. Companies can use these tools to create a professional-looking sales quote and send it to the customer for approval. Using a best-in-class CPQ tool from reputable providers like Tacton.com can help reduce quoting errors and accelerate sales. It improves a salesperson’s efficiency and gives them more time to focus on what matters most — delivering a positive customer experience.
CPQ Pricing
The CPQ system can help you set up your company’s pricing schemes. You can set up rules for dynamic pricing, such as increasing and decreasing prices according to customer demand or varying prices based on a product’s functionality. You can also use nested bundles to group options together and specify the pricing rules that apply to each. Other CPQ options include one-time, subscription, and usage-based pricing (common for service-based deals). Once you’ve figured out all the pricing details, you can create a quote using your gathered information. Often, this means creating an electronic document that includes pricing and product configurations for the customer. This process reduces errors and ensures the quoted prices are accurate based on your rules.
Getting a quote out to customers quickly is important. If you do, you can avoid losing the deal to a more responsive competitor. A fast sales quote process will also make your organization appear professional and efficient to the customer, helping you build a good relationship with them. CPQ systems can automatically generate a quote and send it to the customer through email or even a portal that the customer can access independently. These systems can speed up the quoting process from days to hours, which saves time and effort. Additionally, CPQ tools can provide a centralized platform that helps you track quotes and collaborate with team members to ensure the finalized sales document is accurate and consistent.
CPQ Discounts
The CPQ quoting process provides salespeople an efficient way to produce accurate and detailed quotes. It ensures customers receive a quote that accurately meets their needs and protects profit margins by preventing rogue discounting. It also improves customer satisfaction by allowing them to identify and accept offers that are right for them easily.
The configurable CPQ system allows you to create a variety of discounts that can be manually or automatically applied to quotes. These include volume, term, block, and slab discounts. Volume discounts define tiers that apply to specific product quantities with corresponding discount percentages. Term discounts apply to term-based products, such as subscriptions, incentivize customers to purchase longer terms. Block discounts reduce prices based on the quantity of other products purchased with them. Slab discounts reduce costs based on the total number of products in a quote.
Creating a discount structure in CPQ can be complex, depending on your business model. It requires understanding your business model and thoroughly using the CPQ system’s functionality. The discount structure can also have significant financial implications, so it’s important to establish a well-documented, understandable format and approval workflow to monitor the impact of discounts on your bottom line. The right discounting strategy can improve profitability, attract new business, and stimulate market growth.
CPQ Documentation
When salespeople have the right tools, they can focus on assessing leads and closing deals. It helps them meet buyer demands for personalized products, with more than one in five buyers willing to pay a premium for the exact configuration they want. CPQ tools are designed to help salespeople build and deliver customized quotes. While these tools can be standalone software, they are often embedded into CRM platforms, where they become a seamless part of the sales process. It saves salespeople time, reduces costly errors and results in a more satisfying customer experience. A CPQ solution can price a configured product in real-time based on advanced pricing strategies that consider everything from customer segments and discounts to markups and special offers like buy one, get one free. It can then generate a quote document ready to be sent to customers, speeding up the sales cycle and increasing efficiency. A robust CPQ deployment can support multiple departments, from sales and renewals to finance and legal. It allows everyone to collaborate on the quote creation process, with the ability to review and edit each configuration before it is sent to a customer. It can ensure that a configuration is possible financially and legally, so salespeople are only promising products or prices that are realistically attainable.
