When it comes to must-have sales tools, CPQ (Configure, Price, Quote) software should be at the top of any organization’s list. Not only does it automate the sales process, but it helps reduce errors, close deals faster, and simplifies even the most complex pricing.
Read on to find out more about CPQ and how it can help you accelerate your sales process from start to finish.
What is CPQ?
Like the name implies, a CPQ (Configure, Price, Quote) solution helps sales teams quickly and accurately generate quotes. Often working alongside other business solutions like CRMs and ERP platforms, CPQ combines automation, configuration management, pricing intelligence, and quoting capabilities into a single platform.
By enabling sales teams to more efficiently configure and price complex products and generate accurate quotes, CPQ users spend 73% less time generating quotes than non-CPQ users. This speed and efficiency translates to 49% more quotes on average. \
Here’s how CPQ software works at each stage of the process:
Offering customized solutions to your customers often results in complex configurations. Attempting to configure customized quotes with numerous options manually leaves more room for human error such as misquoted pricing, using outdated spreadsheets or inventory lists, and even creating an impossible configuration.
CPQ solutions configure complex product offerings to the customer’s specifications, making it simple to select and customize product options and features and create accurate 40% of human errors.
Pricing can get even more complex, particularly when you’re dealing with customizations. With CPQ, pricing calculations are automated based on predefined rules, pricing tiers, and discounts. This ensures consistent and accurate pricing across the organization, which in turn reduces errors and resulting revenue leakage.
Another benefit of CPQ software is pricing optimization. Because CPQ software keeps records and create reports of historical quotes—both won and lost as well as negotiated—sales reps can view reports to make better decisions surrounding pricing. CPQ also uses artificial intelligence to create predictive analytics, helping make forecasts more accurate.
Sales reps spend just 34% of their time on average actually selling; the rest of the time is spent on the quoting process. Generating quotes and proposals is one of the most time-consuming aspects of the sales process, often because it is done via excel files and email chains. CPQ automates the process of creating quotes with built-in templates and dynamic content, which means less time spent on quote generation and more time actively engaging in sales activities.
Why Speed Matters
CPQ software has the ability to quickly and accurately generate quotes. But why does speed matter so much?
Most prospects request quotes from multiple vendors, and statistics show that the first to provide a quote is often the one to win the deal. In fact, 50% of buyers choose the vendor that responds first (in the manufacturing industry, this number jumps to 60%.
CPQ software shortens the sales cycle by up to 28%, allowing sales teams to not only produce quotes at a faster rate, but spend more time focusing on building strong customer relationships. This is particularly important when selling complex configurations. CPQ allows you to spend less time on administrative tasks and more time developing the customer relationship.
How CPQ Accelerates the Sales Process
One of the biggest benefits of CPQ software is its ability to accelerate the sales cycle. Here’s how CPQ streamlines tasks to ensure a faster, more accurate process from start to finish:
Automate quoting process
CPQ eliminates the manual aspects at each stage of the CPQ process:
- Configure: Here, automation creates and organizes product data, guidelines, and available configurations, ensuring compatible configurations. This eliminates the chance of creating impossible configurations or working from outdated product catalogs.
- Price: In this stage, CPQ automatically applies the appropriate pricing rules based on predetermined rules and strategies. Automation means consistent and accurate pricing across the organization, which in turn helps reduce errors and minimize revenue leakage.
- Quote: Automation in the Quote phase enables quotes to be generated almost instantly with the appropriate product configurations, customer profiles, and pricing rules.
Reduce approval time
The sales cycle can also face delays when deals get hung up in the approval process. Sales teams may need to wait days for leadership, finance, or legal to approve a new quote, which can put the deal at risk.
CPQ streamlines the quoting approval process, automating based on predefined criteria and rules. Reviewers can approve or reject in a matter of minutes, reducing turnaround time and helping to minimize confusion or delays.
Reduce human error
While speed is important, so is accuracy—98% of buyers have been dissuaded from completing a purchase because of incomplete or incorrect content. When relying on manual quoting while working on intricate configurations with multiple customizations, human error is common.
Without a CPQ solution in place, data accuracy is maintained within product catalogs and pricing information, reducing the likelihood of miscalculations and costly order errors. CPQ software has even been shown to reduce 40% of human errors.
Faster Sales Process = More and Larger Deals
With an automated, streamlined sales process, CPQ software improves the entire sales process overall, giving your sales teams the tools needed to close more deals and at a faster rate.
In addition to a streamlined process, CPQ integrates with your CRM. This allows your sales team to use the CRM’s historical data to identify the best cross-sell or upsell opportunities, which means more deals. In fact, one study found that companies who use a CPQ solution experience 105% larger deal sizes on average.
Why Pierce Washington?
CPQ software empowers companies to enhance efficiency, improve sales visibility, and boost revenue growth. When deployed correctly, the automation and advanced capabilities offered by CPQ software enable hi-tech industries to focus on innovation, deliver superior customer experiences, and maintain a competitive edge in the rapidly evolving tech landscape.
If you’re considering CPQ software for your organization, it’s imperative you choose a systems integrator with expertise and experience in CPQ integrations to ensure you get the most of your software.
Pierce Washington tailors Configure Price Quote solutions for your enterprise, educates on best practices, and advises on how CPQ implementation can work best for the specific use cases within your tech company.
Pierce Washington has helped organizations achieve tangible business outcomes that include:
- 65% reduction in labor to support quote process
- 1-5% reduction in operating costs
- $1 Million increase in quarterly net margin ($1B Company)
- 92% faster initiation of new quote
- 92% faster proposal generation
- 84% faster to enter a 100-line order through the quote to order integration
Ultimately, we empower your organization to sell more. Contact us today and get started.