What is CPQ (Configure Price, Configure Quote)? Is your business in need of it? -
Finding the right devices to improve your sales procedures can be key to running an effective and profitable selling operation. One of the most popular methods for controlling and automating a portion of sales processes is to use CPQ (Configure Price, Configure, Quote) Software. However, what is a CPQ in terms of the primary advantages? And most importantly, does your business require it?
What exactly is an CPQ? What are its benefits?
The CPQ (Configure Price Quote) is a form of sales software that allows sales representatives to swiftly and easily configure products and services, generate precise pricing and quotations to send to the customers.
Here are some of the most important advantages from using a CPQ:
- accurate product configuration:It's easy for sales reps to build a customized package of goods and services based on a prospect's specific needs and requirements. Since they're integrated into an existing system CPQs can also minimize the chances for errors or misunderstandings.
- Professional-looking Quotes for Prospects:CPQs often have customizable templates, which can be used to standardize the look of quotations which makes them easier to comprehend for potential customers and clients. This improves your chances of closing deals faster.
When is it time to make use of the CPQ?
The majority of businesses think about a CPQ system when they want to accomplish the following after hitting a certain point of growth:
- Cost compliance and uniformity between sales reps
- The process of creating and managing quotes is streamlining.
- A shorter sales cycle overall
They are especially crucial in the event that your sales staff gets caught up in numerous administrative tasks that they are able to handle as well as when you want to implement scalable processes within the organization. In addition, price compliance and consistency is important for when you want to ensure that your sales personnel aren't making unauthorized changes to pricing so that they can meet their targets.
However, what most people aren't aware of is that CPQs can be costly complex and complicated to set up and manage.
What are the negatives to using the CPQ?
Below are some of the disadvantages that can be encountered with CPQ systems: CPQ systems:
- The cost can be high. There are initial costs to consider for implementing a CPQ and the ongoing fees for subscriptions, which can lead to the cost being an cost for businesses to invest in.
- The process can be lengthy. Because of the complexities surrounding CPQ application, it could take months to set up and typically requires specialized consultants to help get it off of the starting point.
- It is difficult to manage and use. CPQs can be inflexible and are difficult to alter in many cases, which needs a very robust RevOps/Operations department to maintain it. The process often calls for a major overhaul every time packaging or pricing has to be revised.
While CPQs could be beneficial especially in enforcing price conformity as well as consistency complexities in implementing and maintaining the system could be at the expense of your sales representatives' and your operations teams' performance.
So, do you need it?
The majority of the time, CPQs are designed for big companies with a complex product catalog. However, there are a few factors to consider in particular for small and medium-sized businesses.
- Size and Complexity of Sales and Operations Teams
- If you're working with a smaller sales force, then implementing the CPQ isn't essential. It could not be suited to the task you're trying to accomplish; all the more if you don't have a solid operational team that can support your sales team. The success of CPQ software is contingent upon its implementation and maintenance which is usually handled by your Revenue Operations / Sales Operations team. Having a strong RevOps or Operations team is crucial to making the most out of a solution such as CPQ.
- But, if you've got a large sales team as well as a strong RevOps team in place to manage the integrity of your CPQ solution, then it might be beneficial.
- Product and Service Catalog
- If you offer standard products or services, then using a CPQ might not be necessary. A tool like CPQ is best utilized to create complex services or products that require customization and configuration per account. However, there are other options that could provide this benefit without going through the entire process of setting up a CPQ.
What's the alternative? (Especially for SMBs)
Depending on the use case There are plenty of alternative tools that could be used for your own business.
Most often, small businesses will benefit from using a dedicated quote software. It helps in creating quotations quickly and precisely. A lot of these quoting programs already provide a variety of features, including pricing and product databases, customizable templates, and the ability to deal with difficult configurations. They are typically the most important elements you'd need from the CPQ software. They are often a flexible and effective tool when compared to a spreadsheet program. To find a comprehensive list of quoting tools, you can check out HubSpot's list here.
One tool specifically that offers many of the main advantages of the CPQ instrument is IQ.
IQ (which stands for Interactive Quotes) is a light CPQ alternative that's specifically designed specifically for small and medium-sized businesses.
For RevOps as well as Operations teams It's a flexible method to establish price compliance and consistency between reps. It also provides a good approval workflow for your quoting process.
It also gives real-time analysis as well as eSignatures and payment that make for a faster and faster quote-to-cash procedure.
