What exactly is CPQ (Configure Price, Configure Quote)? Is your company in need of it? -
Finding the right devices to improve your sales procedures can be key to running an effective and profitable sales operation. One of the most popular methods for controlling and automating a portion of the sales process is to use CPQ (Configure Price, Configure and Quote) Software. However, what is a CPQ in terms of its primary benefits? Most importantly, do your business need it?
What is what is a CPQ? What are its benefits?
CQ (Configure Price Quote) is a form of software for sales that permits sales representatives to swiftly and easily configure the products and services they sell, create precise pricing and quotes to be sent to customers.
Here are the key benefits of using a CPQ:
- accurate product configuration:It's simpler for sales representatives to create a custom-designed package of services and products based on a prospect's specific demands and needs. Since these are configured within systems, CPQs can also minimize the chances for errors or misunderstandings.
- Professionally designed quotes for prospective customers:CPQs often have customizable templates that can standardize the appearance of quotes, making them easy to read for prospective customers. This improves your chances of closing deals faster.
The right time is when to use a CPQ?
The majority of businesses think about the possibility of implementing a CPQ approach when they are trying to do the following after hitting a certain point in growth
- Cost compliance and uniformity within sales reps
- The process of creating and managing quotes is streamlining.
- Shortening overall sales cycle
These are all especially important in the event that your sales staff is getting caught up in more administrative tasks than they can take on as well as the time when you're looking to introduce efficient processes that can be scaled within your organization. Additionally, price conformity and consistent pricing is essential those who want to make sure that your sales staff isn't making unauthorized changes to pricing so that they can meet their quotas.
However, what most people aren't aware of is that CPQs are costly complicated, difficult, and time-consuming to set up and manage.
Are there some disadvantages of using the CPQ?
There are a few disadvantages to consider with CPQ systems: CPQ methods:
- It isn't cheap. There are upfront costs when choosing to implement a CPQ and annual subscription costs, which can lead to the cost being an investment for organizations.
- It can take months to implement. Due to the complexity of CPQ program, it could take months to set up and often requires the help of specialized experts to help get it off of the ground.
- The system is complex to operate and maintain. They can be rigid and hard to modify, and often needs a very solid RevOps/Operations team to keep it. It often requires dramatic rework every time packaging or pricing has to be changed.
Although CPQs can be advantageous especially when enforcing price compliance with consistency and conformity, complexities to implement and maintain the tool might be at the expense of your operational and sales reps teams' efficiency.
So, do you need it?
Generally, CPQs are designed for big companies with a complex product catalog. But, there are few factors to consider particularly for smaller-medium enterprises.
- Size and Complexity of Sales and Operations Teams
- If you've got a tiny sales force, then implementing the CPQ isn't necessary. The software may be too much for what you're trying do, especially if you don't have a strong operations team to back up your sales team. The success of CPQ software heavily relies on its maintenance and implementation, often done by your Revenue Operations / Sales Operations team. Building a solid RevOps / Operations team is key to making the most out of a solution similar to CPQ.
- But, if you've got huge sales staff as well as a strong RevOps team that can maintain your CPQ solution, it could potentially make sense.
- Product and Service Catalog
- If you sell standard products or services using a CPQ is not essential. The tool CPQ is ideal to create complex services or products which require customisation and configuration for each account. There are other options that could provide this benefit without going to the whole process of creating a CPQ.
What's your alternative? (Especially for SMBs)
Based on the purpose depending on the use case, there's a variety of alternative tools that are suitable for use in your company.
In general, small and mid-sized businesses can gain from utilizing a quoting software, which will allow you to create quotes quickly and accurately. Many of these softwares have a number of functions, such as product and pricing databases, customizing templates as well as the capability to manage complicated configurations. These are the main features you'd expect from an CPQ software. They are often a powerful and scalable tool in comparison with a spreadsheet manual software. For a list of comprehensive quoting tools, you can check out HubSpot's list here.
One tool which offers most of the core benefits of a CPQ tool is called IQ.
IQ (which is an acronym for Interactive Quotes) is a lightweight CPQ alternative specifically made to be used by small-medium-sized companies.
For RevOps as well as Operations teams It's a flexible option to ensure price conformance and consistency across reps. It also provides a good approval workflow for your quoting procedure.
The platform also provides real-time analytics as well as eSignatures and payment to make it a much simpler and faster quote-to-cash procedure.
