What is CPQ (Configure Price, Configure Quote)? Do you need it for your company? -
Finding the right methods to simplify your sales procedures can be key to running a more successful and profitable sales operation. One of the most popular methods for organizing and automating aspects of the sales procedure is using CPQ (Configure, Price and Quote) Software. What exactly is CPQ in terms of its primary benefits? And most importantly, does your business require it?
What exactly is a CPQ? What are the benefits of a CPQ?
CPQ (Configure Price Quote) is a form of software for sales that permits sales reps to quickly and efficiently configure items and services, calculate precise pricing and quotes to be sent to clients.
Here are some of the major benefits from using the CPQ:
- Accurate Product Configuration:It's easier for sales reps to create a custom-designed package of services and products based on a prospect's specific needs and requirements. Since these are configured in the system, CPQs also reduce the chances for errors or misunderstandings.
- Professional-looking Quotes for Prospects:CPQs often have customizable templates, which can be used to standardize the style of the quotes, making them easy to understand for prospects and customers. They also increase your chance to close deals quicker.
The right time is when to use a CPQ?
Businesses typically consider a CPQ approach when they are trying to do the following when they reach a certain level of expansion:
- Price compliance and consistency among sales reps
- Making it easier to create and manage quotes
- The sales cycle is being shortened overall.
They are especially crucial to consider when your sales department is sucked into many administrative duties that they're able to take on, and for those who want to establish an organization-wide process that is scalable. Additionally, price conformity and consistency are crucial the time you need to be sure that your sales team isn't doing price changes that aren't authorized to meet the quotas.
However, what most people don't know is that CPQs can be costly complex and complicated to maintain and implement.
Which are the advantages of using a CPQ?
Here are some disadvantages when it comes to using CPQ methods:
- The cost can be high. There are upfront costs for implementing a CPQ and ongoing subscription fees and can end up with it being a major cost for businesses to invest in.
- Implementation can take months. Because of the complexities surrounding CPQ program, it could take months to set up and usually requires specific consultants to help get it off of the foundation.
- Complex to use and maintain. CPQs can be inflexible and are difficult to alter, and often requires a really strong RevOps / Operations team to maintain it. The process often calls for a major overhaul anytime pricing or packaging needs to be changed.
While CPQs are beneficial, particularly for ensuring price compliance and consistency, the challenges to implement and maintain the system could be in the way of sales reps' and operations teams' productivity.
So, do you need it?
In general, CPQs are designed for large enterprises with a more complicated product catalog. However, there are a couple of things to take into consideration in particular for small and medium-sized businesses.
- Size and Complexity of Sales and Operations Teams
- If you're working with a smaller sales staff, the implementation of a CPQ might not be essential. The system might be too much for what you're trying to accomplish; even more so if do not have an experienced operations team to back up the sales staff. The effectiveness of CPQ software is heavily dependent on its implementation and maintenance, often done by your Revenue Operations / Sales Operations team. Building a solid RevOps and Operations team is key for getting the best value of a software similar to CPQ.
- If you do have huge sales staff as well as a strong RevOps team in place to manage the integrity of your CPQ solution, it could potentially make sense.
- Product and Service Catalog
- If you sell basic, standardized items or services, a CPQ may not be required. The tool CPQ is best utilized for complex products or services which require customisation and configuration per account. However, there are other tools that can offer this advantage without having to go the full route of implementing a CPQ.
What's the best alternative? (Especially especially for SMBs)
Based on the purpose depending on the use case, there's a variety of alternative tools that could be used for your company.
In general, small and mid-sized businesses can advantage from using a specific quoting software, which will allow you to create quotations quickly and precisely. Most of these softwares offer many features such as price and product databases, customizable templates, as well as the capability to manage difficult configurations. They are typically the most important things you'd want from an CPQ software. They are often a powerful and scalable tool in comparison with a spreadsheet manual software. If you're looking for a complete list of quoting tools, you can check out HubSpot's list here.
But, one instrument which offers all the advantages of a CPQ instrument is IQ.
IQ (which stands for Interactive Quotes) is a lighter CPQ alternative specifically made specifically for small and medium-sized businesses.
For RevOps and Operations teams It's a flexible method to establish price compliance and consistency across your reps. It's also a good way to establish a good approval workflow for your quote procedure.
It also gives real-time analysis in the form of eSignatures, payments, and eSignatures to make it a much simpler and quicker quote-to-cash.
