How Does a CPQ Work?

CPQ stands for configure, price, quote. It is a process that sellers use to determine pricing, make offers, and customize products. This software can be used to simplify the pricing process. To understand the value of this tool, let us take a closer look at each tool in detail.

Configure

With the help of CPQ software, it is easy to customize products and services based on customer needs. Features and components required for products can be precisely defined. The company easily finds out the access parameters for each component. As a result, customers get what they are looking for without manual input.

The advantage is that the tool integrates with other software products. These include ERP, CRM, e-commerce platforms, and accounting systems. Integration ensures accurate product data in the quoting process.

Price

By extending the CPQ, sales representatives can calculate prices in real-time. The configured product features help with this. The pricing component consists of set base prices for certain components or functions. Discounts and surcharges are also taken into account.

The company may offer discounts to regular customers or for bulk orders. Some other factors that may  have an impact on the price include:

• shipping costs;
• taxes;
• suppliers’ discounts;
• promotions.

The advantage of the CPQ tool is that pricing rules can be set taking into account the company’s business model. The software guarantees the automation of price determination for complex pricing models. This can be multi-level, wholesale, and complex pricing. This eliminates the need for spreadsheets and manual calculations. Therefore, quotes will always be accurate.

The software product also allows you to quickly update your pricing models, change the amount of discounts or add new surcharges. In this way, too, the company can keep up with current innovations in the markets and adjust prices accordingly.

Quote

A CPQ offer is a company document that clearly describes all products and services. They are included in sales, discounts, or other deals. Also, the terms of sale and available payment methods are included. This is very important because it provides an accurate record of what the buyer and seller agreed upon. No misunderstandings will arise from this in the future.

The software simplifies the process of creating commercial offers. You’ll be able to quickly customize products to meet customer needs. Discounts and special deals will be accepted automatically, including the necessary terms and conditions. Through this, manual efforts can be avoided.

Quotes that are created using such an application can be generated instantly. This has a significant advantage in speeding up negotiations and closing deals. It ensures accuracy throughout the entire mapping process, thus significantly reducing the number of errors that can be costly in the future.

Using CPQ Solution to Establish Business

The software can integrate with other systems that the company uses. The integration of CPQ and ERP guarantees the connection between sales. It can also be used with Pandadoc. Sales can be tracked along with the status of deliveries. Managers track the entire sales process, and operators do behind the trends to create new deals.

Combining CPQ with ERP is very advantageous. By doing so, operating costs can be reduced. The timeliness of production will increase and the market will grow. Therefore, using this software advantage will be beneficial.

CPQ affects the efficiency of the sales staff. Salespeople do not need to spend a lot of time on sales:

1. Streamlining processes provides more time for salespeople to hold meetings with salespeople.
2. More time for working on deals will always be a plus.
3. Salespeople need to be motivated to make effective sales.

With CRM, you can do in-depth research and take notes. When you have access to documentation and important information, you can help the customer and close a profitable deal. You provide both the company as a thought leader and an up-to-date consultant in such a niche.

When you need to close a sale, CPQ can help you shift quickly to making a decision. With this software, you can fine-tune products, and apply discounts. This automation will make you a sales professional.

CPQ to Increase Income and Savings

CRM platforms and software business applications increase the possibilities for more efficient sales processes. CPQ enables you to focus on sales and best practices rather than the constant training of sales representatives.

Easily completing sales and submitting sales proposals, ensures an easy process for closing deals. Sales professionals can achieve success and it will positively impact the growth of the company.

CPQ is a tool that deserves the attention of every sales company. The advantage of using it is to formalize the rules and pricing. The most important benefit will be an increase in revenue and a decrease in costs.

The successful use of the software depends on the support of the sales staff and the implementation of CPQ and other departments. If done right, investing in the software will be the best decision. Your company will be on the path to a more efficient and profitable process. Follow it with confidence and in a short time you will be able to see incredible results. This is the best modern software for companies that are involved in sales.