{"id":191,"date":"2022-05-16T11:07:28","date_gmt":"2022-05-16T10:07:28","guid":{"rendered":"https:\/\/www.bespokecloudsoftware.co.uk\/blog\/?p=191"},"modified":"2022-05-16T11:08:00","modified_gmt":"2022-05-16T10:08:00","slug":"what-is-cpq","status":"publish","type":"post","link":"https:\/\/www.bespokecloudsoftware.co.uk\/blog\/what-is-cpq\/","title":{"rendered":"What is CPQ?"},"content":{"rendered":"\n

Perhaps you have read or heard people mention CPQ in meetings or in an article but not too sure what it means and how it might help your business.<\/p>\n\n\n\n

This blog post will address all the questions you have on CPQ so by the end of this post you will understand the value CPQ software can bring to you and your team.<\/p>\n\n\n\n

First let’s start at the begin to define what it is.<\/p>\n\n\n\n

CPQ Definition<\/h3>\n\n\n\n

CPQ is an abbreviation which stands for Configure, Price and Quote. The purpose of CPQ is to help support your sales team to spend their time on what you brought them into the business for, to sell!<\/p>\n\n\n\n

Any movie fan will be familiar with the famous Tom Cruise line ‘Show me the money!’ CPQ software drastically improves the time it takes to quote, has increased accuracies and provides greater opportunities to not miss out on renewals or upsell opportunities for the team, based on your business rules.<\/p>\n\n\n\n

Therefore rather than you or the sales reps having to dedicate high levels of time to admin tasks that further delay your ability to take on new leads and calls, CPQ will actually allow you to take on more sales calls and opportunities than you can perhaps imagine right now.<\/p>\n\n\n\n

Specifically let’s look at each individual element of CPQ software to understand its benefits even further for you and your business.<\/p>\n\n\n\n

Configure<\/h3>\n\n\n\n

There may have been a time gone by where a one size fits all product or a limited product range provided success for businesses. The reality is in the modern day customers are demanding bespoke products tailored to them, and if you can’t provide it or at the speed they demand then they will go to your competitor who can.<\/p>\n\n\n\n

Research has shown that people will actually pay a premium for personalisation, so it is an opportunity for businesses to increase the value of existing customers and future sales.<\/p>\n\n\n\n

However with this in mind, with traditional methods the idea of configuring lots of different options for customers is a lengthy process which may require involving different teams in the company to check it is feasible and profitable such as the legal, human resources or financial team. Ensuring the sales team don’t price a customisation incorrectly where they actually may make a loss or suggest an end product the company can’t provide through human error.<\/p>\n\n\n\n

This is where CPQ comes in, it will configure all of your different products with their various options, variations and bolt ons. The configuration process then allows the sales team to create accurate options for your customer. CPQ even provides guided selling without management needing to be involved to provide potential alternatives and relevant upsells for what they individually are after from your business.<\/p>\n\n\n\n

It will also allow for changes to be made easily, so you aren’t going back to the drawing board if a customer decides they have a different request during the quotation process.<\/p>\n\n\n\n

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Price<\/h3>\n\n\n\n

The next important part of CPQ is Price. As your sales team expands and grows you want to be able to save time on processes and avoid inaccuracies during the pricing stage. Without CPQ building a custom quote might involve approvals by several managers or teams by the sales reps. With each approval adding additional time to getting the price agreed internally.<\/p>\n\n\n\n

Or worse the sales reps may come to their own conclusion of the price or refer to a past similar project which actually unknown to them was undersold and didn’t make a profit, only to use that price again as it was the closest they could find.<\/p>\n\n\n\n

Let’s look at a basic example you may come across frequently in your day to day life.<\/p>\n\n\n\n

You go to your local coffee shop and we are guessing you don’t just ask for a ‘coffee’. It is likely you have an order specific to you, and even when you tell them your order for example a latte. They may go on to offer you various options or additions: which size, type of milk, syrups or adding cream. Each with their own subsequent price to include.<\/p>\n\n\n\n

The staff don’t then leave you for an hour to decide with their colleagues what the price should be. Then perhaps when you order again the following day you find the price has changed, when a different staff member serves you.<\/p>\n\n\n\n

They have dynamic pricing and options which are pre-defined and easy for the team to tell you the exact price for any option you desire. That is how CPQ works, even in the most complex of configuration of custom products it guides customers to the correct price quotes.<\/p>\n\n\n\n

CPQ allows for all options and scenario’s to have a price. This even includes managers giving the sales department pre-approval workflows that could include freebies or bulk discounts, that senior management know are still achieving the right profit margins. Whilst giving the sales teams tools to close their direct sales quicker and with a higher conversion rate to close the sale.<\/p>\n\n\n\n

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Quote<\/h3>\n\n\n\n

Now we are at the best part of CPQ software, the quote solution for your customers. CPQ will provide professional and accurate price quotes using your pricing structures discussed above. Your sales teams can quickly identify customer information to provide them with real time pricing that follows your pricing rules and complex configuration.<\/p>\n\n\n\n

Whilst at the same time delivering it significantly quicker both in the time involved for your sales reps, managers and any team member involved in product configuration and in the speed of time your customer can receive their proposal solution, thanks to CPQ software!<\/p>\n\n\n\n

The quote software will give your customers a correctly configured order every single time. The sales cycles can be sped up to close the sale quicker with the ability to easily amend the quote even for the most complex products and complex pricing information to meet your customer needs. Because once you configure products CPQ is simple to be used by existing and new sales reps to build new and amend existing quotes. Along with providing quotes for relevant renewals or subscriptions, without relying on the sales members to diarise or remember themselves.<\/p>\n\n\n\n

CPQ can be used alongside your CRM system<\/a><\/strong> or any other tech stack<\/a><\/strong> you already have in place. For example to support with inventory management, without needing to double up on tasks within the team . Once the sales quotes are signed off and agreed with your customer, the sales processes don’t stop there.<\/p>\n\n\n\n

The sales department can take the price quote and key features from the proposal to provide a fully detailed purchase order, look after subscription management and use the CPQ tool with all other departments within the business to swiftly complete the order for your customer, without needing to waste time re-entering customer data.<\/p>\n\n\n\n

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When do you need to consider getting a CPQ solution?<\/h3>\n\n\n\n

Hopefully the above information has helped to explain what CPQ is and what the CPQ process involves. Perhaps you are still wondering if now is the right time for your business goals and current structure to consider CPQ solutions. Here are some questions to ask yourself:<\/p>\n\n\n\n