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 popular solution for organizing and automating aspects of the sales procedure is by using CPQ (Configure Price, Quote) Software. But, what exactly is CPQ and what are its primary benefits? And most importantly, does your company require it?
What exactly is what is a CPQ? What are the benefits of a CPQ?
CQ (Configure Price Quote) is a form of software used to sell that allows salespeople to swiftly and easily configure products and services, generate exact pricing, and then create quotes to be sent to customers.
Here are the major benefits that come with an CPQ:
- Correct Product ConfigurationIt's easy for sales reps to design a customized set of products and services depending upon a prospective customer's needs and requirements. Because they are integrated in an existing system CPQs can also minimize the possibility of mistakes or misinterpretations.
- professional-looking quotes for prospects:CPQs often have customizable templates that allow for standardization of the look of quotations, making them easy to understand for prospects and clients. This improves your chances to close deals quicker.
The right time is when to utilize an CPQ?
Businesses typically consider a CPQ method when they wish to achieve the following, at a specific point in growth
- Consistency and price compliance among sales reps
- Streamlining quote creation and management
- The sales cycle is being shortened overall.
All of these are crucial to consider when your sales department is sucked into numerous administrative tasks that they're able to take on as well as when you want to implement an organization-wide process that is scalable. Additionally, price conformity and consistency is important for those who want to make sure that your sales personnel aren't making unauthorized changes to pricing to meet targets.
But what many aren't aware of is that CPQs can be costly complex and complicated to implement and maintain.
Are there the advantages and disadvantages of using an CPQ?
Below are some of the disadvantages that can be encountered in using CPQ systems:
- The cost can be high. There is a cost upfront when choosing to implement an CPQ in addition to ongoing subscription fees that can result in the cost being an investment for organizations.
- Implementation can take months. Due to the complexity of CPQ application, it may take months to implement it and typically requires specialized consultants for getting it off the starting point.
- Complex to use and maintain. They can be rigid and hard to modify as well, and usually needs a very robust RevOps/Operations department to ensure it is maintained. It often requires dramatic rework every time packaging or pricing has to be updated.
Though CPQs can be advantageous especially in enforcing price conformity and consistency, the challenges in implementing and maintaining the tool might be detrimental to your sales representatives' and your operations teams' productivity.
Also, do you really need it?
In general, CPQs are designed for large enterprises with a more complicated product catalog. However, there are a number of factors to be considered, especially for small-medium businesses.
- Dimensions and Complexity of Sales and Operations Teams
- If you've got a tiny sales force, then implementing the CPQ may not be necessary. It could be too much for what you're trying do, especially 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 the Revenue Operations / Sales Operations team. Building a solid RevOps / Operations team is crucial for getting the best value of an application similar to CPQ.
- If you do have huge sales staff and an experienced RevOps team to maintain the integrity of your CPQ solution, this could be a good idea.
- Product and Service Catalog
- If you sell simple, standardized products or services, then using a CPQ is not essential. The tool CPQ is best utilized for complex products or services that need customization and configuration on a per-user basis. There exist other software that give this benefit, but without through the entire process of setting up an CPQ.
What's the alternative? (Especially specifically for SMBs)
In accordance with the application depending on the use case, there's a variety different tools could be used for your own business.
Typically, SMBs can greatly benefit from using a dedicated quote software. It can help in generating quotes quickly and accurately. Many of these quoting programs already offer many features such as price and product databases, customizable templates, and the ability to deal with complicated configurations. These are mostly the key features you'd expect from the CPQ software anyway. It is oftentimes a more flexible and effective tool when compared with a spreadsheet manual application. To find a comprehensive list of quoting tools, you can browse HubSpot's selection below.
However, one tool which offers all the advantages of an CPQ tool is IQ.
"IQ" (which is an acronym for Interactive Quotes) is a light CPQ alternative that's specifically designed specifically for small and medium-sized businesses.
For RevOps and Operations teams It's a flexible option to ensure price conformance and consistency across your reps. It's also a good way to establish an efficient approval process for your quoting process.
The platform also provides real-time analytics in the form of eSignatures, payments, and eSignatures to make it a much simpler and more effective quote-to-cash process.
