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What is CPQ, or Configure Price Quote? Definition, usage and benefits
A sales offer tailored to customer needs is a very strong sales argument. However, preparing it, especially for a demanding specialized industry, is usually time-consuming and difficult. But does it really have to be?
What is CPQ?
Imagine a situation when your company offers highly sophisticated technical solutions. The number of available components and variables often counts hundreds or thousands of items. That affect the final configuration and shape of the commercial offer.
It is almost impossible for a salesperson to remember every possible option. Add to this complicated pricing structures. Does this mean that creating a personalized offer, containing the best available solution for a potential customer, is actually impossible? Is your sales rep in a lost position? Not necessarily.
This is where CPQ software helps and comes to the rescue. Designed to automatically generate demanding and complex commercial offers for multiple departments.
Thanks to this, a salesperson can focus on building an appropriate sales strategy and relations with a client. He/She does not waste time on leafing through product catalogs in search of a suitable component or configuration method.
CPQ stands for Configure Price Quote.
It is nothing else but an abbreviated description of the most important elements of the sales process supported by CPQ programs, i.e.: configuration, pricing and quotation.
Configure Price Quote software are created in order to foresee every available pricing scenario adjusted with maximum precision to the customer and his needs. Thanks to this, a salesperson can generate a good commercial offer containing a set of detailed information in a few moments and reach the decision-making person with it right away. All this is great for customer satisfaction.
What is the main benefit of CPQ software?
According to research from CSO Insights and Gartner, in complex B2B sales processes, more than half of opportunities end with no customer decision, or nothing.
Why does this happen? Very often the reason is an inappropriate sales offer, which does not meet customer expectations, or too long time to prepare such an offer. Sales reps spend more than 70% of their time on work that can be done automatically.
Sales tool like CPQ, was created in order to limit such situations to zero. Its primary goal is to increase sales, revenue streams and support the sales rep. However, this does not mean that CPQ systems are able – in the near future – to completely replace the salesman.
Their primary task is to simplify the process of setting up a sales offer and performing repetitive tasks, requiring a lot of time, which a salesperson should devote to building relationships and searching for new sales opportunities instead of filling in data in the major CRM system.
CPQ tools are ideal for industries such as: photovoltaics, automotive, insurance, automation, marketing, retail, and many others where creating a sales offer is a complex process due to the number of possible and available configurations.
The truth is, CPQ software solutions should become a salesperson’s best friend, especially for those whose salary depends on sales results and customer success, and for whom preparing sales offers are a nightmare.
CPQ vs The Sales Pipeline
The functionality of CPQ also supports activities related to the creation of strategy and sales process. With this tool, the manager has access to all existing product configurations. He can also assign a top-down discount policy or accurate pricing to each of them, and even add appropriate settings to a specific vendor account.
Some CPQ software solutions even include artificial intelligence for optimizing prices based on what it thinks a customer will pay. With CPQ software, the sales team can also easily develop a universal sales offer template.
The sales process itself, thanks to the use of CPQ, becomes transparent and simple. The salesman no longer has to learn hundreds of pages of a product catalog by heart in order to write a sales offer. He also does not waste time on searching for complex products or waiting for approval workflows.
A personalized offer document can be created during a meeting with a client, using appropriate calculators, forms, or other customized modules in a timely manner. With CPQ software you can instantly configure products taking into account the real needs of your customer.
Additionally, the integration of Salesbook’s CPQ tool with the Customer Relationship Management system enables a very precise analysis of both the sales results and the meeting with the client. If you combine CPQ software with your ERP systems you will gain very accurate information about your business, inventory and the most popular products.
Collecting detailed information will allow managers and salespeople to identify those elements of the meeting that need to be refined and influence the final customer decision.
Salesbook provides a number of detailed reports for this purpose, such as
- meeting effectiveness (effective, ineffective, invalid, completed, terminated, saved),
- average duration of an effective meeting,
- average time spent on specific modules during all meetings,
- location of all meetings,
- status of offers broken down by type (sent, displayed),
- number of follow-ups planned for the customer,
- the most common reasons why a meeting was interrupted.
Additionally, the individual clients’ account contains detailed information about every meeting with a company representative. It is even possible to record a meeting, of course with the prior consent of the caller.
Catching the moments when you lose the customer’s interest is the most important step towards improving and sealing the sales process. CPQ solution will help you to focus on the interlocutor and respond to his/her needs, and thus keep the money in the company, which so far has been slipping through your fingers.
CPQ to the sales reps rescue!
Imagine that you are a truck manufacturer and you get a call from a potential customer who wants to place an order for 10 sets (tractor + semi-trailer), but each of the sets requires an individual configuration, because the vehicles will be used for different tasks. So your client needs a customized solutions.
If you have CPQ software ready in your company, you can easily solve his problem and in a few minutes generate the right configuration for such an order, and this will automatically open the way for additional sales.
Since the CPQ software has all the current data uploaded about the configurable products you offer, you can easily determine which components are currently available and which ones the customer would have to wait longer for.
Based on this, you create an effective sales offer, provide current pricing, and even generate an interactive 3D model for each truck. This action will take your offers to a higher level.
The potential customer immediately receives the complete information needed to accept the trade offer. From that moment, you are only a few steps away from closing the sale.
Benefits of CPQ software
Using CPQ system is the most effective way to ensure that sales staff work efficiently. It allows salespeople to search through various databases and get more information about customer needs, and thus prepare a good sales offer faster and more accurately.
The CPQ tool can automatically create every possible product configuration, pricing and discount combination. This will definitely influence a positive customer experience, increase the chance of starting cooperation and finalizing a deal, all of which will ultimately bring profit to your company.
However, the benefits that using CPQ offers are much more.
New quality of sales offer
Nowadays sales offers should not only contain content that is relevant to the customers, but also be visually appealing. CPQ software will help you both increase the aesthetic value of your offer, and shorten the waiting time for such a document. Potential customers will appreciate the fact that a good sales offer reaches them immediately.
The CPQ tool from Salesbook makes it possible to attach to the prepared sales offer, among others, the most interesting elements of the presentation, attachments in the form of text files or graphic files. So the customer does not have to go to your website to learn more about your products or service.
Integration
Creating an effective sales offer for a potential customers often requires collecting data from various company departments (purchasing, warehouse, accounting, technical or implementation departments). Thus, the sales staff is faced with quite a challenge. However, it is a very important element in the process of creating offers.
Gathering all the information, checking inventory levels and whether the client is not behind with payments for previous orders, requires a huge amount of work, and in the case of an offer, every hour of delay works against the sales rep.
CPQ tool from Salesbook load and update all this data on the fly, so the whole path of creating a sales offer comes down to just selecting the right configuration and making that offer to the customer.
If in the process of creating a sales offer a salesperson updates some data about his clients, other departments in the company will automatically gain access to it. This streamlines processes and minimizes the risk of information delays.
Comparison of competitors’ sales offers
Customers don’t always make a buying decision right away. The decision-making process in consultative sales takes much longer than in online sales. Recipients want to first recognize the market and find out what options our competitors can offer them.
This is understandable, especially for expensive customized products that are, for example, part of a large investment. However, it is worth being prepared for such an eventuality and not leaving the fate of the transaction in the hands of Google search, or worse, in the hands of the competition.
CPQ software is the answer to this problem. Correctly configured and supplemented with up-to-date data about our competitors, the system, will allow you to present an accurate description and estimated comparison of your sales offer with the offer of other companies. Thus convince him that you have the best solution to offer.
Salesbook offers, among others, built-in comparators of commercial offers. With these, you can show your audience examples of what your and your competitors have to offer, based on a thorough configuration analysis.
You can easily convince new customers that it is worth starting cooperation with the company you represent if you do the work of comparing available options for them.
Customers will be happy that they have found a solution to their problem, and at the same time they don’t have to waste their time checking competing commercial offers.
This approach will save your customers time and bring you closer to closing the sale.
Increased sales teams effectiveness
Sales reps may stand on their heads to try to spend 100% of their time with their customers, but the reality in many companies shows that the ratio is quite different.
About 70% of all sales reps’ work is administrative.
Only 30% of their time is spent prospecting or meeting with customers.
Giving your sales team access to CPQ software from Salesbook allows your employees to focus on interactions with potential customers while minimizing administrative burdens.
After all, companies hire salespeople to sell and win new customers, not to sit at desks and fill out Excel sheets all day.
The CPQ system allows you to remove obstacles from under the feet of the sales team and increase sales, because it automates all administrative tasks, even those related to sending meeting summaries to customers.
With faster response times, automated follow-ups, automatic generation of sales offers, transfer of all meeting data directly to the CRM system, automatic reporting, and the ability to analyze in detail the sales meeting, Salesbook’s CPQ module increases sales department productivity by an average of 53%.
Higher revenues and savings
CPQ solutions save a lot of time in every company with a sales department, for which a sales offer is one of the main tools of work.
Sales representatives, thanks to automation of repetitive activities related to creation of sales offers, have more time to find and convince the customer to the product and establish cooperation. Managers see a higher rate of successful offers in the system and work much more efficiently to create a successful sales plan, because they know exactly what works and what doesn’t.
Improving the sales process based on a detailed analysis of the data provided by Salesbook will make salespeople focus less on the sales offer itself and spend more time on identifying needs and presenting products and services.
Eliminating ineffective elements from the sales process will allow you to optimize salespeople’s work and create both the sales offer template and refine all stages of the sales funnel.
Your company can thus realistically save money burned on ineffective activities and even generate savings. This, in rather uncertain times for business, will certainly be a huge advantage.
A precise and tailored sales pitch will always be at the center of all activity.
How to choose the best CPQ software?
Since CPQ is meant to simplify and speed up processes in a company, it must meet several important criteria.
First of all, it is important that such a tool is simple and intuitive to use for the salesperson. It has to be as well visually attractive for the customer.
It is also important that the client, at each stage of the offer configuration, is involved in the process and aware of what data is used to create the offer document. This will make him feel in control of the entire process.
If the commercial offer is created right in front of the customer’s eyes, it will more than likely save the vendor from subsequent phone calls and translations related to its contents. It will also ultimately speed up the buying process.
When choosing a CPQ tool, you should also pay attention to whether it has a module that allows you to compare competitor’s offers, and whether it has built-in modules that allow you to create and send a detailed sales offer to the customer during the meeting.
It is also important how the tool integrates with the CRM system used in the company, in order to constantly update data and send it back in real time to our CRM. It is worth taking an interest in this topic to avoid unpleasant surprises during implementation of the selected tool.
Why choose CPQ software from Salesbook?
At Salesbook we focus on meeting efficiency and increasing revenue. The effectiveness of our CPQ software is confirmed by thousands of salespeople who use Salesbook on a daily basis. (check who trusted us already)
The standard features of Salesbook CPQ software can be divided into several modules. We present them below. Thanks to them your sales offer will always be complete and attractive for the customer.
Survey module
During a meeting with a customer, a salesperson has an opportunity to conduct an interactive, visually attractive survey and examine their specific needs. For this purpose they have at their disposal pre-configured sales questionnaires. All of this, prepared and developed in such a way as to best recognize the customer’s needs.
Thanks to this solution, both the customer and a company representative, can create a sales offer tailored to the clients’ needs.
Suggestions module
Based on the information gathered in the survey, an algorithm embedded in the application will find the best configuration of customizable products and the sales offer will simply be perfectly tailored. If it is possible to create several variants, the application will suggest an overview of them.
Thanks to this, potential customers can check how different solutions are and what are their advantages and disadvantages.
Presentation module
Gives the salesperson constant access to all marketing and sales materials. During the meeting, the salesman can freely move between presentations, catalogs or specially prepared case studies.
Graphic elements, films or the part of the presentation which made the biggest impression on the potential customer can be automatically added to the final offer document.
Offer module
Thanks to this module, after the survey is closed, the client can freely browse through the automatically generated offer. This is the perfect time to check if the data is correct and if the prepared sales offer meets the customer’s expectations.
There is a good chance that by involving the customer in the process of creating a sales offer, the seller will close the sale during the meeting and open the door to additional sales.
Summary module
After going to the summary, the program automatically sends all collected data to the CRM system.
Thanks to this, the salesperson does not have to complete anything after returning to the office. An e-mail with a summary and all attachments is immediately sent to the customer. Now our salesman can safely start the next meeting.
CPQ tools are designed for companies that want to increase sales
CPQ software is an essential tool for companies that focus on efficiency and high results in sales. Thanks to it, you will eliminate from sales the errors that cause the loss of chances to close the deal and increase the effectiveness of commercial offers.
Maximum simplification of the process of creating offers and automatic selection of configuration ideally suited to the needs of the recipient will make the sales teams feel the wind in their sails. Instead of wasting time, pasting data into the CRM system, they will be engaged in acquiring new customers and maintaining relationships with those already acquired.
From now on, your every sales offer will be perfect.
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