What is CPQ (Configure Price, Configure Quote)? Do you need it for your company? -
Finding the best devices to improve your sales procedures is essential to run an efficient and lucrative sales operation. One popular solution for organizing and automating aspects of the sales process is using CPQ (Configure Price, Configure, Quote) Software. What exactly is CPQ in terms of its main benefits? And most importantly, does your business require it?
What is a CPQ? What are the benefits of a CPQ?
CQ (Configure Price Quote) is a form of software for sales that permits sales representatives to swiftly and efficiently configure items and services, calculate precise pricing and estimates to email to clients.
Here are some of the key benefits from using the CPQ:
- accurate product configuration:It's simpler for sales representatives to build a customized package of services and products based upon a prospective customer's needs and requirements. Because they are integrated in an existing system CPQs also reduce the chances for errors or misunderstandings.
- Professional-looking Quotes for Prospects:CPQs often have customizable templates that allow for standardization of the appearance of quotes and make them simple to comprehend for potential customers and customers. They also increase your chance to close deals quicker.
The right time is when to utilize the CPQ?
Companies typically think about a CPQ approach when they are trying to do the following at a specific point in growth
- Consistency and price compliance between sales reps
- Streamlining quote creation and management
- The sales cycle is being shortened overall.
They are especially crucial to consider when your sales department is getting caught up in many administrative duties that they're able to take on as well as those who want to establish efficient processes that can be scaled within your organization. Also, price compliance and consistency is important for when you want to ensure that your sales personnel aren't doing price changes that aren't authorized to meet targets.
But what many do not know is that CPQs can be costly, complex, and difficult to set up and manage.
What are the advantages and advantages of using a CPQ?
Here are some disadvantages when it comes to using CPQ Systems:
- The cost can be high. There are upfront costs when choosing to implement the CPQ and ongoing subscription fees, which can lead to it being a major cost for businesses to invest in.
- The process can be lengthy. Due to the complex nature of CPQ software, it could take months to set up and usually requires specific consultants to help get it off of the foundation.
- It is difficult to manage and use. They can be rigid and hard to modify as well, and usually needs a very strong RevOps / Operations team to keep it. It often requires dramatic rework every time packaging or pricing has to be changed.
Though CPQs can be advantageous especially for ensuring price compliance as well as consistency complexities in implementing and maintaining the system could be detrimental to your sales representatives' and your operations teams' productivity.
So, do you need it?
Generally, CPQs are designed for larger companies that have a complex product catalog. There are however a few factors to consider in particular for small and medium-sized businesses.
- The size and complexity of Sales and Operations Teams
- If you have a small sales team, implementing the CPQ may not be essential. It could not be suited to the task you're trying do, even more so if do not have an experienced operational team that can support the sales staff. The performance of CPQ software heavily relies on its implementation and maintenance which is usually handled by your Revenue Operations / Sales Operations team. A strong RevOps and Operations team is key to making the most out of an application like CPQ.
- But, if you've got a large sales team and a strong RevOps team to maintain the integrity of your CPQ solution, then it could potentially make sense.
- Product and Service Catalog
- If you are selling basic, standardized products or services the use of a CPQ may not be necessary. An instrument like CPQ is ideal for complex products or services that require customization and configuration on a per-user basis. But, there are other tools that can offer this advantage without having to go to the whole process of creating the CPQ.
What's the alternative? (Especially for SMBs)
Based on the purpose depending on the use case, there's a variety of other tools that could be used for your own business.
Typically, SMBs can greatly gain from utilizing a quote software. It will allow you to create estimates quickly and efficiently. A lot of these quoting softwares already offer many features such as product and pricing templates that can be customized, as well as the capability to manage complicated configurations. These are mostly the key elements you'd need from a CPQ software. This is typically a more scalable and efficient tool compared with a spreadsheet manual software. If you're looking for a complete list of quoting tools, you can look up HubSpot's list here.
But, one instrument in particular that gives you many of the main benefits from the CPQ tool is IQ.
IQ (which is an acronym for Interactive Quotes) is a light CPQ option that's designed for small-medium businesses.
For RevOps and Operations teams, it's a more flexible solution to implement price compliance and consistency among reps. It also provides a good approval workflow for the quoting process.
It also gives real-time analysis, eSignatures, and payments that make for a faster and quicker quote-to-cash.
