enEvery sales rep knows: sending accurate quotes in a timely manner is a challenge.
This is especially true for companies that sell big, complicated, and/or highly customizable products. There are so many things that can go wrong during the quoting process.
This is a problem because delayed quotes can frustrate customers, while inaccurate quotes can harm profitability. It’s a catch 22. Send quotes quickly and risk inaccuracies. Or take your time and risk losing a potential sale. What’s a rep to do in this situation?
CPQ software is the answer. Once your sales team invests in this kind of tool—and develops a reliable CPQ process around it—your reps will become more productive, make fewer errors, and drive more revenue. So that’s what we’re going to talk about today.
Keep reading to learn how you can build an advanced CPQ process for your sales department. We’ll cover everything from what CPQ software is to successfully implementing your chosen CPQ solution. We have a lot to get to, so let’s dive right in!
What is CPQ Software?
First things first: CPQ stands for Configure, Price, Quote.
This important software helps sales teams generate sales quotes in less time. It does this by giving sales reps the tools they need to configure custom products, price them accurately, and deliver quote documents—all in a matter of minutes.
CPQ software uses a combination of predetermined rules and automation capabilities. Companies decide how their reps can configure products, the discounts they can offer, etc. The CPQ system then guides reps through the CPQ process, enabling them to build accurate, pre-approved quotes in real time.
CPQ tools are often used to serve B2B customers because they usually have more complicated requirements. But the truth is, CPQ is beneficial to a wide range of brands.
Why is CPQ Vital to Your Sales Process?
CPQ (configure price quote) software will completely revolutionize your sales process.
Once you invest in a CPQ tool, your sales reps will become more productive. They’ll also enjoy faster sales cycles, create better customer experiences, and generate more revenue.
All you have to do is teach them to use the software the right way. That’s where a quality CPQ process comes in. Let’s look at how your process can help produce the benefits above.
The 4 Benefits of a Quality CPQ Process
CPQ software is powerful. But you need to implement this solution effectively for it to benefit your organization. We’ll explain the implementation process in a few minutes. For now, let’s dive deeper into the benefits you and your sales team will enjoy once your CPQ is up and running:
Greater Productivity
A well-designed CPQ process will significantly improve rep productivity.
How do we know this? Because automation significantly improves everyone’s productivity. And the best CPQ tools are loaded with top-level automation capabilities.
Your reps won’t have to configure products or calculate prices by themselves. Your CPQ will be with them every step of the way, providing guidelines and making complex calculations in real time. This will limit the amount of admin work they have to do.
CPQ software also reduces errors. Machines don’t make the same mistakes humans do. Your reps will close deals faster when they don’t have to make multiple revisions to quotes.
Faster Sales Cycles
The right CPQ process will also accelerate your sales cycle. How does more money in less time sound? Pretty good, right? A trusted CPQ solution will make it happen for your team.
As mentioned above, your reps will be able to automate key elements of the quoting process. This will allow them to configure complex products and send accurate price documents in less time. The result? Your customers get the data they need fast.
Better Customer Experience
Potential customers don’t want to wait to receive quotes. And they definitely don’t want to wait, only to receive an inaccurate quote and have to start the process over.
An effective CPQ process will help reps generate quotes in minutes. And because CPQ software improves accuracy, your buyers won’t have to worry about the back and forth that typically accompanies these transactions. They’ll receive quality quotes the first time.
At the end of the day, your customers want a quality product in as little time as possible. Quick, accurate quotes make this a reality, which leads to a better customer experience.
More Revenue Growth
Last but not least, a strong CPQ process will enable revenue growth.
Think about it: when your reps are more productive, your sales cycles are shorter, and customers enjoy the buying experience, more revenue is almost inevitable.
Your reps will have more time to chase new leads and close new deals. And your existing customers will continue to buy from you. This last bit is important. Studies show that a 5% bump in customer retention can lead to a 25% jump in company profitability. Win!
The Key Components of an Effective CPQ Process
So, what does an effective CPQ process look like?
While every team’s process is different, the best ones include four components: product configuration, price optimization, quote generation and management, and approval workflows.
Product Configuration
Reps need to assemble products that meet their customers’ exact demands. This often requires customization options. A proper CPQ process will give reps the flexibility to make rapid modifications and adjust their product offerings in real time. Even better, this kind of tool can guide reps through the customization process, which will save them time.
Customized products are a must for many organizations. CPQ software—and a process to use the platform’s features—will streamline customization efforts.
Pricing Optimization
Companies must establish pricing rules for their CPQ system. Things like individual component costs, current sales, existing inventory levels, and competitor pricing should be factored in. If they aren’t, your quotes will be inaccurate and your CPQ process will fail.
Fortunately, clear guidelines will ensure consistent, attractive, and profitable prices. When this happens, it gets easier to close deals in a timely manner.
Quote Generation and Management
Your CPQ process isn’t complete until you create quotes for customers.
CPQ systems allow for easy quote generation and management. They give reps access to automation features they can use to build branded, accurate quotes in a flash.
Just as important, CPQ software helps reps manage quotes they’ve already made. Where is Quote ABC for Company XYZ? When was it sent? And has it been opened yet? These are questions that CPQ can help answer. Once you do, you can adjust your quote strategy.
For example, you might find that one of your quotes is accepted more often than others. Maybe it’s the design style, or the products sold. Either way, you can use these details to your benefit.
Approval Workflows
Then there’s the approval process to think about.
Once you implement a successful CPQ process, your reps’ quotes will send to the right people on autopilot. Like we talked about earlier, this ensures speed and accuracy, which almost always leads to more revenue. Why wouldn’t it? You’re giving customers exactly what they want.
Implementing Your CPQ Solution
You can’t build a winning CPQ process until you implement your CPQ solution. The four steps below will help you streamline the process for your sales reps:
Choose the Right CPQ System
There are a bunch of CPQ systems on the market. Which one is best for your sales team? We can’t answer that for you, but we can give you a framework to make the right choice:
- Evaluate Features: Ensure the CPQ system has the features you need
- Check Integrations: Confirm the tool integrates with your existing tech stack
- Identify Budget: Make sure the CPQ fits your predetermined price range
- Read Reviews: Look for industry reviews to see if others are satisfied with the tool
Choosing the right CPQ system is crucial. By evaluating features, checking integrations, identifying your budget, and reading reviews, you can find a solid solution for your team.
Integrate With Your CRM Tool
Your customer relationship management (CRM) software is the backbone of your sales organization. Without it, you’d probably struggle to keep track of customer details, automate communications, and close deals on a regular basis.
After you choose a CPQ platform, integrate the tool with your CRM software. This will make sure your CPQ has accurate information to use in the quoting process.
Customize Your CPQ Software
Now comes the fun part: customization!
The best CPQ solutions allow users to personalize their platform. You should be able to add custom configuration rules and pricing guidelines. You should be able to modify quote designs and brand your finished documents with your company’s logo as well.
You can also customize your CPQ software by programming it to send finalized quotes to certain people. This will streamline the approval process, as we’ve already talked about.
There are countless sales teams out there—and each is different. Your CPQ process isn’t complete until you customize your CPQ software to meet your team’s unique needs.
Train Your Sales Reps Successfully
There’s one more thing you need to do: train your sales reps to use your CPQ software.
Without proper training, they won’t use the tool effectively. In fact, they might get so frustrated, they stop using it altogether. This would be a waste of company funds and could hamper productivity levels.
Fortunately, your reps already know how to use other sales tools. Learning to use CPQ software won’t be a burden. Start by giving them access to comprehensive tutorials. If you feel the need, sign them up for webinars, hands-on workshops, or other forms of intensive training.
While this will cost your company time and money, you’ll gain all of it back when they’ve mastered your CPQ. Just don’t forget to update their training on a regular basis. Software tools change. Your reps need to change with them.
3 Challenges That Threaten Your CPQ Process
CPQ software has the power to transform your sales organization, but it won’t be easy. There are three challenges you’ll need to overcome to find success:
Aligning Sales and Operations Teams
The typical operations team has a wide range of responsibilities.
They’re in charge of ordering materials, allocating resources, managing budgets, implementing quality control measures, and about 100 other important tasks.
If your company’s sales and operations teams aren’t aligned, your CPQ process is destined to fail. Why? Because your sales people will eventually make sales your company can’t fulfill.
Your assembly team won’t have the right components. Or need double the lead time. Or have to cut corners during the assembly process due to budget constraints. This will likely lead to malfunctioning units and low customer satisfaction scores.
Unsatisfied customers don’t make repeat purchases. They often discourage their circles of influence from making purchases as well. This is a potential disaster area for your company. Avoid it by making sure your sales and operations teams are in sync.
Managing Complex Configurations and Pricing Rules
Complex configurations and pricing rules can derail a company’s CPQ process too.
Complexity often leads to errors, miscommunications, and time delays. If the configurations are too intricate, sales reps might struggle to input correct information. This results in inaccurate quotes and potential customer dissatisfaction. Custom pricing rules add another layer of difficulty. If they aren’t evenly applied, you’ll generate inconsistent sales quotes.
CPQ solutions aim to streamline these challenges. However, without a user-friendly interface, it’s difficult to overcome them. This is another reason why the right CPQ is so important.
Ensuring Compliance With Company Policies
Your sales reps can use CPQ tools to build, price, and quote a variety of products. The question is, do you want them to do this? The answer might be no—at least in some situations.
For example, you don’t want your reps to sell products that your company can’t build. Or items that are illegal in your area. Or overly expensive units that don’t generate a profit.
Reps with a lot of sales experience probably won’t try to build rogue products. They’ll know that these deals won’t go through anyway. But newer sellers might try to push the envelope. Doing so will only lead to anger, disappointment, and time lost.
Fortunately, you can program your CPQ to adhere to company policies. But this takes time to do. And you need to analyze the rules you set up on a regular basis to make sure they still work.
Successful CPQ Implementation: A Case Study
Implementing CPQ software may sound complicated, but it doesn’t have to be.
In fact, thousands of sales teams have implemented Experlogix and use the tool to configure better products, ace the pricing stage, and generate accurate quotes.
One of those sales teams belongs to Freedom Concepts. This manufacturing company builds adaptive bikes and alternative seating solutions for the disabled. Since every person they work with is unique, they often build custom solutions for their many customers.
Freedom Concepts uses Experlogix to design and price these custom solutions quickly.
This is incredibly important because the longer the CPQ process takes, the longer it takes to build products, and the more discomfort Freedom Concepts’ customers feel.
Once Freedom Concepts decided to invest in Experlogix, they were provided expert training and support. This helped their sales team learn to use the software in record time. It also allowed them to unlock features they didn’t know existed. Now, Freedom Concepts has implemented 100 rules in Experlogix, which enables them to build products with 2,000 different options.
Just as important, Freedom Concepts was able to easily integrate Experlogix with its CRM, Microsoft Dynamics. This allows for seamless data transfers and ensures accurate quotes.
Improve Your Sales Process With CPQ Software
The right configure, price, quote solution will transform your company.
Sales teams that use CPQ software experience better productivity, a shorter sales cycle, and greater revenue growth. So, what are you waiting for? Invest in CPQ as soon as possible!
Unsure which CPQ is right for your organization? Try Experlogix. Our platform is easy to use and loaded with powerful features. Schedule a free consultation today to learn more about our solution and how it can be applied to your situation.
