CPQ stands for Configure, Price, Quote. This 3-step process includes:
- Configuring a product (or products) based on customer specifications
- Pricing the product accurately and appropriately
- Generating a quote that meets all requirements
In manufacturing specifically, this process can be lengthy. That’s where CPQ software solutions come in. CPQ software helps companies streamline their sales processes by automating the configuration, pricing, and quoting of products and services.
Configure, Price, Quote software is invaluable for manufacturing businesses that often deal with complex sales cycles that includes time-consuming customization, quoting, and pricing for large product catalogs. Attempting to manually configure customizations, quote prices and obtain approvals not only extends the time to market, but opens the process up for errors.
With a CPQ solution, manual processes are replaced by more efficient, automated workflows.
What Can CPQ Do For Your Manufacturing Business?
What exactly can CPQ solutions do for your manufacturing business? Take a look at some of the capabilities they provide for each stage of the process:
- Configuration: The configuration portion of CPQ software allows teams to configure complex products or services based on customer requirements. It provides a guided interface that ensures the selection of compatible components, features, and options, eliminating the possibility of errors or incompatible configurations.
- Pricing: With a CPQ application in place, you can also determine the appropriate pricing for the configured products. It considers various factors, such as customer-specific pricing rules, volume discounts, bundling options, promotions, and any applicable discounts or constraints.
- Quoting: CPQ solutions generate customized quotes based on the configured products and pricing. It automatically pulls the necessary data, including product specifications, pricing details, terms and conditions, and generates a professional-looking quote document. Some CPQ tools also allow users to customize the quote format and branding.
In addition to the Configure, Price, Quote capabilities, CPQ software also provides:
- Integration: with other business systems, such as customer relationship management (CRM) platforms, enterprise resource planning (ERP) systems, and pricing databases. CPQ integration ensures the flow of data between different departments and systems is seamless while enhancing overall efficiency.
- Proposal Management: Often, CPQ software also includes proposal management capabilities, enabling sales teams to create and manage proposals efficiently. For manufacturing teams, this may involve the ability to insert pre-approved content, track proposal versions, collaborate with team members, and incorporate electronic signatures for faster approval processes.
Top Benefits of CPQ
For a manufacturing organization, there are many benefits of CPQ implementation. Some of the most impactful include:
1. Customization of complex bundles and packages
Customization is a must when it comes to creating bundles or packages for customers. This can be tedious for reps, however, with numerous customization options. With CPQ software, sales teams can configure equipment according to the customer’s requirements.
Sales teams select the base equipment and then customize it by choosing specific features, options, and accessories. Your software can create default choices for each step, further simplifying and expediting the process, or select from bundled components as add-ons.
The software also ensures that the selected components are compatible and provides real-time feedback on the configuration, ensuring there are no setbacks or issues when it comes time for production.
2. Provides a method of organizing large catalogs
You can organize and maintain a large catalog within your CPQ software, eliminating work on the backend and improving overall accuracy. Features or options added in the backend will automatically appear as a choice, so your team doesn’t have to spend time reconfiguring your catalog whenever new options are added.
Additionally, in Salesforce CPQ, you can also save commonly-configured bundles as Favorites, then reuse the configuration again. You can also use it to save specific products within your catalog, which is a very useful and time-saving feature when dealing with large product catalogs.
3. Better sales efficiency
In an ideal world, your sales team would be able to focus most of their time on actually selling your products—interacting with customers, following up on leads, and ensuring customer satisfaction. But according to a study from insidesales.com, only 37% of a salesperson’s time is spent on revenue-generating activities. Most of the remainder is spent on administrative tasks.
CPQ software automates the tedious process of quoting, pricing, and managing proposals, freeing up your sales team to spend more time on what they do best—closing sales.
4. Logic for discounting complex quoting
Once you’ve configured bundle, you’ll have an accurate price of all the products in the bundle. But what if you want to discount it? With CPQ software, reps can choose multiple layers of discounts. The software considers factors such as the customer’s pricing tier, volume discounts, and any special promotional offers.
Additionally, you can also control the order of discounts, create pricing rules and set specified limits to discretionary discounts, allowing reps the flexibility to price competitively without affecting your margins.
5. Quick quoting and approval process
Prospective customers shop around. Knowing they will be requesting quotes from more than one vendor means fast response times are a must to remain competitive. CPQ software speeds up the quoting and approval process, enabling multiple teams to collaborate and sign off on quotes quickly and efficiently.
Salesforce CPQ, for example, includes Advanced Approvals, which allows quotes to be sent to multiple teams and approved simultaneously, rather than having to wait on each other. If resubmitting a rejected quote, you can also automatically skip steps within a quote that have already been passed, further expediting approval.
6. Customer access via portals or communities
The benefits of CPQ software for sales teams and internal processes are clear, but CPQ can also enable your customers or distributors to create their own quotes via branded websites, portals, or communities.
Because your specified pricing and engineering standards are already built in, the customer can generate their own quotes quickly and on their own timeline. Once they’ve built and submitted their quote, it is automatically sent to the correct internal contact or team, shortening your sales process by eliminating back and forth.
7. Increase in quotes generated
With a CPQ solution in place, sales teams are empowered to quickly and accurately create quotes and streamline the approval process, which ultimately enables more quotes in a shorter timeframe.
In fact, according to a study by the Aberdeen Group, CPQ software enabled sales teams to increase quote productivity by 33% while increasing quotes, contracts, proposals, and RFP responses by 49%.
CPQ Best Practices and Considerations
If you’re considering CPQ software for your manufacturing enterprise, you’ll have specific needs that might not apply to other industries. For example, a manufacturing organization requires a CPQ that can manage inventory, shipping, and materials, while a company that provides a software or digital product would have different requirements for their CPQ.
Because not all CPQ solutions provide the same capabilities, you’ll want to look for one that is equipped to handle your business requirements. Things to consider include:
- Complexity of configurations, including the ability to scale as your configurations and offerings expand
- Ease of implementation
- Performance speed
- Integration with existing systems and solutions
Two of the most powerful CPQ solutions in the manufacturing industry include Salesforce and Logik. These two solutions also work together to provide more advanced e-commerce capabilities, ensuring your customers get exactly what they need during the sales lifecycle.
Let Pierce Washington Help You
Whether you’re starting from scratch or would like to integrate a CPQ solution to your existing systems, a CPQ consulting partner with a proven track record can help you implement your CPQ project. Pierce Washington can help.
As an accredited Salesforce and Logik implementation and consultant partner with more than 20 years of expertise, we can help your manufacturing organization configure, implement, and utilize Salesforce CPQ intelligently, helping to drive growth and improve efficiencies.
You can also enhance Salesforce CPQ’s capabilities by combining with Logik’s e-commerce services. Logik’s single view tool that then populates across Salesforce and ecommerce platforms, customizing the selling experience while allowing you to access all of your product data in a single place. Designed to handle the most complex product configurations, Logik and Salesforce can deliver faster, more accurate quotes to your customers.
Pierce Washington has spent over 20 years working with large manufacturing companies, helping them to achieve their most challenging Quote-to-Cash process automation goals.