What is CPQ (Configure Price, Configure Quote)? Do you need it for your company? -
Finding the best methods to simplify your sales procedures is essential to run a more successful and profitable sales operation. One of the most popular methods for controlling and automating a portion of the sales process is to use CPQ (Configure, Price, Quote) Software. But, what exactly is CPQ and what are its main benefits? Most importantly, do your business require it?
What is an 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 the products and services they sell, create exact pricing, and then create quotations to send to clients.
Here are a few of the major benefits that come with the CPQ:
- Accurate Product Configuration:It's easy for sales reps to build a customized package of goods and services based upon a prospective customer's wants and needs. Since these are configured in systems, CPQs are also less likely to cause chances for errors or misunderstandings.
- professional-looking quotes for prospects:CPQs often have customizable templates that allow for standardization of the style of the quotes, making them easy to comprehend for potential customers and clients. This improves your chances to close deals quicker.
When is it time to use the CPQ?
The majority of businesses think about a CPQ system when they want to accomplish the following at a specific point in growth
- Consistency and price compliance within sales reps
- Streamlining quote creation and management
- The sales cycle is being shortened overall.
They are especially crucial for when your sales team is getting caught up in more administrative tasks than they're able to take on, and for those who want to establish scalable processes within the organization. Also, price compliance and consistency are crucial when you want to ensure that your sales personnel aren't performing price adjustments that aren't legal to meet quotas.
What most aren't aware of is that CPQs can be expensive complicated, difficult, and time-consuming to implement and maintain.
Which are the disadvantages of using the CPQ?
Here are some disadvantages with CPQ systems: CPQ methods:
- The cost can be high. There is a cost upfront when choosing to implement an CPQ and ongoing subscription fees and can end up with it being a major cost for businesses to invest in.
- It can take months to implement. Due to the complexity of CPQ application, it could be a long time to get it implemented and often requires the help of specialized experts for getting it off the starting point.
- Complex to use and maintain. The CPQs are inflexible and hard to modify, and often needs a very robust RevOps/Operations department to ensure it is maintained. They often require a massive overhaul anytime pricing or packaging needs to be changed.
While CPQs could be beneficial especially when enforcing price compliance and consistency, the complexities in implementing and maintaining the tool might be in the way of operational and sales reps teams' productivity.
Do you require it?
Generally, CPQs are designed for big companies with a extensive product catalogue. There are however a couple of things to take into consideration, especially for small-medium businesses.
- Dimensions and Complexity of Sales and Operations Teams
- If you're working with a smaller sales force, then implementing the CPQ isn't essential. The software may not be suited to the task you're trying do, especially if you don't have a strong operations team to back up your sales team. The effectiveness of CPQ software heavily relies on the implementation and upkeep which is usually handled by your Revenue Operations / Sales Operations team. A strong RevOps and Operations team is key for getting the best value of an application like CPQ.
- If you do have an extensive sales force and an experienced RevOps team that can maintain the integrity of your CPQ solution, then this could be a good idea.
- Product and Service Catalog
- If you offer basic, standardized products or services, then the use of a CPQ might not be necessary. An instrument like CPQ is ideal for complex products or services that require customization and configuration per account. But, there exist other software that give this benefit, but without through the entire process of setting up an CPQ.
What's the alternative? (Especially for SMBs)
Based on the purpose There are plenty of other tools that could be used for your business.
Most often, small businesses will gain from utilizing a quote software. It can help in generating quotations quickly and precisely. Many of these softwares have a number of functions, such as price and product databases, customizable templates, and the ability to deal with complicated configurations. These are the main features you'd expect from an CPQ software anyway. It is oftentimes a more scalable and efficient tool compared with a spreadsheet manual application. To find a comprehensive list of quotation tools, look up HubSpot's list here.
But, one instrument which offers many of the main advantages of the CPQ tool is IQ.
IQ (which means Interactive Quotes) is a light CPQ alternative specifically made to be used by small-medium-sized companies.
For RevOps and Operations teams, it's a more flexible solution to implement price compliance and consistency between reps. It also provides an efficient approval process for your quoting procedure.
It also offers real-time analytics, eSignatures, and payments to make it a much simpler and quicker quote-to-cash.
