What is CPQ and how can it help your business?

September 15, 2020

CloudSense

Time management is essential – especially for your sales team.

Yet, sales reps are spending just 35.2% of their time selling.

So what are they doing with the rest of their time?

Admin. Navigating legacy systems and manually tracking orders.

A Configure, Price Quote (CPQ) tool can fix this. With CPQ your business can save valuable time, shorten your sales cycle and let your salespeople do what they do best – sell.

In this blog, we’ll answer the question what is CPQ, see how CPQ can benefit your business and also explore how the solution has evolved to adapt to changing customer behavior.

What is CPQ?

First off, let’s cover the basics.

CPQ, or Configure Price Quote, is a tool that extends your Customer Relationship Management (CRM) platform. It’s primarily designed to help sales teams configure accurate quotes and get them out to customers quicker.

CPQ replaces cumbersome legacy systems or spreadsheets to increase sales productivity and performance.

The fact CPQ is projected to grow at a 25% Compound Annual Growth Rate (CAGR) through 2020 shows it continues to be an essential tool for growing businesses.

But how does it actually help?

Let’s break it down.

1. Configure

Your customers aren’t interested in one-size-fits-all products. Two-thirds of buyers are prepared to pay more when the sales experience is personalized.

Using configuration, you can bundle features and functionality to give your customers exactly what they’re looking for – all in real-time.

Even if you have a complex or extensive product set, the right CPQ tool can help you quickly and easily pull together a product configuration that suits your customer.

2. Price

Once you’ve configured the product, CPQ accurately calculates the price – taking into account discounting, business rules and customizations.

CPQ can automate pricing based on your preferred pricing strategy, whether it’s dynamic, competition-based or value-based pricing.

3. Quote

Now it’s time to send the quote. Using CPQ, you can streamline approvals and gain signatures electronically – closing more deals in less time.

Every quote you send is consistent and accurate, giving your customers a consistently convenient experience.

So now we’ve explored the essentials of CPQ, why is it such a staple in profitable businesses?

What are the benefits of using CPQ?

There are a host of business benefits that make CPQ an attractive investment for any growing business, but here are 6 of its stand-out sales benefits:

1. Shorten your sales cycle

CPQ can shorten sales cycles by a third by streamlining product configurations and automating the quoting process.

2. Increase accuracy

CPQ creates error-free sales with automation increasing quoting accuracy by 79% and minimizing your order fallout rate.

3. Boost productivity and efficiency

CPQ increases quoting productivity by 33% through quicker and more accurate sales. Your sales team won’t have to worry about fixing errors and completing manual processes – giving them more time to sell.

4. Go to market faster

Working in tandem with the right Product Catalog, CPQ can help you define and launch new commercial offerings much faster – whether you’re in Telecommunications, Media or Utilities.

5. Maximize deals

Companies that use CPQ have 12% more sales reps achieve their sales quota. Automation makes it quicker and easier for your sales team to sell your products and services, while guided selling boosts average order value through cross-sells and up-sells.

6. Improve your customer experience

CPQ uses customer data from your CRM, combined with AI and analytics to give your customers products tailored to their needs. And, with the help of automation, they also get the fast, accurate and consistent experience they’ve become accustomed to with digital-native brands.

CPQ has adapted alongside buyer needs

Customers’ preference for convenient subscriptions and easy buying journeys has seen the subscription economy grow more than 100% annually in recent years.

And CPQ has had to flex to meet these customer demands.

In doing so, it’s evolved from a solution solely for sales transactions to one that enables a more customer-centric and holistic sale.

Today, the best CPQ solutions work with complementary applications to help businesses go beyond the sale and offer a better experience for the entire customer lifecycle. This includes the management of contracts and invoices, as well as ongoing services and subscriptions.

As part of its evolution to fulfill the complete buyer journey, some CPQ solutions have also evolved to offer omnichannel selling. Allowing your customers to progress smoothly through the sales journey, regardless of channel or device.

Add the ability to make more of customer data with AI, machine learning and predictive analytics, and modern CPQ apps offer a multi-pronged tool for any large business that wants to sell better.