If you’ve ever struggled to manually create a quote via spreadsheets or legacy quoting software, you know how time-consuming and frustrating the process can be.
What is CPQ software and how can it help? Standing for configure, price, quote, this is a tool (or suite of tools) that centralizes and automates every part of the quoting process, so your sales team always has instant access to the data they need.
Ultimately, CPQ software can free your sales teams to pursue new opportunities previously beyond their reach.
Today, we’re taking a closer look at how this software works, and how it can be an integral part of your digital transformation.
What is CPQ Software?
In any industry, pricing is paramount. However, it isn’t always simple or streamlined. In most cases, sales and contract teams are inundated with various rules and strategies that govern how they present products and prices to their prospects and customers. For example, certain accounts may require different rules than others.
These manual workflows can hinder a company’s ability to produce timely quotes, and they introduce the risk of human error, especially when complex computations are involved.
This is where CPQ software comes in. This is an application that takes the legwork (and guesswork) out of quote development, allowing you to leverage automation to quickly produce accurate, highly-specialized quotes. You can tailor quotes to each account with ease, eliminating the laborious task of manual customization.
As a result, your inside and outside sales teams can sell faster, more effectively and at a greater capacity.
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5 Benefits of a CPQ Implementation
1. More Accurate Quotes
Let’s start with one of the most obvious benefits. With CPQ software, you never have to worry if you’ve made an honest mistake in your pricing calculations.
If you’re used to delivering a substantial number of quotes on a regular basis, it’s easy to miscalculate a sum, transpose two numbers, forget a decimal or fall into several other pricing errors.
However, this isn’t the case with CPQ automation. These platforms take all your company’s account-specific pricing rules and bring them together onto one centralized platform. When it’s time to create a quote, you can do so in a few clicks, while the software takes care of the back-end configurations.
2. More Streamlined Sales Funnels
Your sales team worked hard to acquire a new lead, and the outlook was promising. Then, the sales quote process dragged on too long and the lead’s interest waned. Has this ever happened at your company?
Your bottom line depends on moving prospects through the sales funnel at an efficient and consistent pace. When you’re relying on outdated back-office systems and multiple personnel to pull a quote together, it can take longer than you realize (and longer than your lead is willing to wait).
In contrast, CPQ software ensures you have immediate access to the pricing data you need to create an accurate quote.
3. Targeted, Personalized Quotes
It’s no secret that today’s customer is looking for more than just low prices. They also want personalized treatment that makes them feel like they aren’t just a number.
In response, forward-thinking companies are pivoting their sales strategies and using targeted ads and customized marketing messages to appeal on a more individual level. Their efforts are paying off, as 40% of executives claim that such personalization tactics have directly improved their sales, basket size and profits.
This customer experience transformation can also benefit your CPQ processes. By customizing your quotes to each prospect’s unique preferences, you can deliver a positive customer experience every time.
Forget cookie-cutter templates that all look the same and offer minimal variation. You can easily include account-specific details on each quote, setting the stage for continued personalization through the funnel.
4. Easy Updates and Adjustments
Say a lead accepted your quote and decided to move forward with the purchase, but then, they needed to adjust one of the line items. How quickly would your sales team be able to respond?
The ability to react swiftly and accurately to a client-driven change is a characteristic that top-performing companies share. Not only does this prove your team is customer-focused, but it also speaks volumes about the coordination among your departments.
In addition to responding to outside requests, you should also be able to update your quotes based on other factors. For instance, you may find that a discount is now applicable.
One study showed that best-in-class CPQ users are more than twice as effective as their peers in minimizing the number of people and functions required for the quote preparation, submission and revision process. Fewer human touchpoints and more automation mean updated proposals can get out the door and into the hands of customers faster.
5. Shorter, More Lucrative Sales Cycles
What if there was minimal downtime between the moment a salesperson interacts with a lead and the time when they deliver a quote? Well, you’d likely be able to go after more leads!
This is one of the greatest benefits of CPQ software. It shortens the quote development cycle and empowers your sales team to reach more prospects. At the same time, it enables them to reach for bigger deals.
The study mentioned earlier also shows that companies that implement CPQ software experience a 4.3% year-over-year increase in their average deal size. They also enjoy five times more growth in year-over-year revenue compared to companies that don’t implement such tools.
Can CPQ Integrate With ERP?
Many CRM applications incorporate key elements of CPQ functionality, and these CRM systems often can be seamlessly integrated with ERP software. Standalone CPQ applications also can be integrated with ERP software.
Integration can bring together your front and back-office processes into a single, easy-to-manage solution. This integrated solution can manage day-to-day sales, pipelines and quotes, while at the same time, handling inventory, production, fulfillment and customer invoicing.
We always recommend integration because sales team members should be able to clearly see inventory levels and fulfillment updates so they can respond to customer inquiries. In addition, back-office employees should be able to access sales and quote data so they can adjust inventory, create and fill orders and invoice customers.
We outline more benefits of integration in our post, Benefits of ERP Integration.
While you could use manual workflows to move data from one stakeholder to the next, the process would be complicated, time-consuming and error-prone. Integrating your systems ensures automatic, bidirectional data flow, quickening the process and improving overall accuracy.
Reap the Benefits of CPQ/ERP Integration
To earn new business, expand your customer reach and grow your bottom line, your quotes must be accurate, efficient and customer-focused. For years, this meant painstakingly entering numbers into tools that have proven unreliable and sluggish.
But then came CPQ software. What is CPQ software? It the key to solving customer pain points and sales bottlenecks.
Integrating CPQ functionality into your CRM or ERP system is a step in the right direction. When you bring together your client-facing and in-house operations, you streamline the flow of data throughout your organization. As a result, you’re able to deliver quotes that are accurate, personalized and timely, every time.
Interested in learning more about how CPQ can benefit your company? Contact our ERP consultants below for a free consultation.