Every sales rep knows that your work with customers is never really over. Even after they agree to buy your solution, it’s just the beginning.
The ever-increasing competition in B2B sales has demanded for highly specialized and customized products. One-size-fits-all is no longer a reality.
For buyers, this is great news, because they end up receiving a personalized product crafted specifically for them. For sellers, this can create some complications in an extremely important area: pricing.
If you sold the same exact product to every single one of your customers, pricing would be a breeze. But that’s not the case for most B2B SaaS companies. Luckily, CPQ software exists.
What is CPQ?
CPQ stands for configure, price, quote, and is typically used to describe a software system used by sellers to produce accurate quotes for complex and configurable products.
The overall purpose of implementing a CPQ system is to make your sales cycle more efficient, productive, and successful. By accelerating the product configuration and proposal process and reducing the risk of producing inaccurate quotes, sales reps have a better chance at establishing a more positive relationship with the customer and offering a positive buying experience.
How does CPQ software work?
Businesses will implement a CPQ solution to increase both sales productivity and velocity. To get a better understanding of how CPQ software works, let’s break it down into the three stage process it follows.
In the context of CPQ software, configuration refers to configuring your products. Businesses are offering customized solutions, experiences, and products, catering to each and every customer individually. While this is a huge plus for buyers, customization complicates the lives of sellers.
Unless, of course, they implement CPQ software.
These software tools will configure complex product offerings that will fit exactly what the customer needs. Beyond that, CPQ software can also detect cross-sell and upsell opportunities that some reps might not recognize.
When you let software be your configurator, it removes the risk of human error and opens up more time for your sales team to focus on creating connections with the customer.
The “P” in CPQ stands for price. With complex solutions come even more complicated pricing structures. If you’re offering customizable products (kudos), you can’t have a predetermined price laid out before they’re configured.
Sales teams that craft prices on their own are at risk of losing business due to offering less than optimal prices and generating slow turnaround times.
CPQ software implements artificial intelligence to pick up on customer buying patterns and market research to determine what your customers are actually willing to pay. Essentially, it can ensure that you are offering a reasonable and personalized price to your customers while still maintaining profitability.
With configuration and pricing figured out, your business needs to then send the customer a finalized, error-free quote, which will offer them more details.
Often, prospective customers will request quotes from more than one vendor, making fast response times a valuable asset. Due to the complex nature of accurate pricing and configuration, however, that can be hard to achieve.
CPQ software has the capability to create personalized quotes for the customers. It also allows sellers to easily review the quote before sending it to the customer, allowing them to take note of or change any last minute details.
Benefits of CPQ software
The obvious overall benefit of implementing CPQ software within your sales team is automation within your sales process that offers more time for reps to spend time getting to know the customer and finding ways to establish a mutually beneficial relationship with them. It eliminates the need for sales reps to dig through various spreadsheets looking for information regarding the customer, pricing, and quote creation.
With a CPQ system, every single potential configuration, price, and discount combination can be created automatically. This way, you can offer your customers the most straightforward quote possible.
Here are some other benefits your business can count on experiencing if you decide to implement a CPQ system.
Collaboration for accurate quota creation
Again, there are going to be plenty of customers who are only going to request sales quotes from you to compare it with ones they get from other distributors. With that in mind, efficiency is key. However, accuracy also plays a big part in CPQ.
The beauty of really any sales tool is that anyone can be given access throughout your business and everything updates in real-time. And that’s a necessary part in creating accurate quotes for your customers.
Salespeople aren’t the only ones who should be involved in the quoting process. Legal, customer success, and finance teams also have a hand in creating as accurate a quote as possible.
You don’t want to send a customer a quote that has compliance issues or a lack of profitability. CPQ software allows you to collaborate with other departments to send over the best and most accurate quote possible, all on the first go.
Because accurate and efficient quote creation involves multiple departments, there is a risk of the necessary information regarding customers getting siloed. Luckily, a key functionality of CPQ software is that it offers the ability to integrate with other tools used by departments both within and outside of sales, like customer relationship management. This way, communication and guidelines can be accessed by anyone who is a part of the process.
A quote for a customer will undergo plenty of stages in its lifetime. For example, once a customer places an order, the proper invoice needs to be sent. After payment is received, the business will recognize the revenue and fulfill the order. Based on all of these activities, it’s clear that sales isn’t the only department involved, and CPQ isn’t the only software used.
Implementing a CPQ that can integrate with your existing business tools, primarily ERP systems, will make the workflows between sales and operations a lot smoother, enabling you to provide a positive customer experience.
Increased sales efficiency
Sales reps can try all they want to focus 100 percent of their time on their customers, but there are plenty of tedious business processes that go along with selling that have no customer involvement at all. In fact, over 70% of a sales rep’s time is spent on administrative tasks. That leaves only 30% of their time for prospecting and connecting with customers.
Using a CPQ to streamline the administrative tasks that come along with configuring, pricing, and quoting frees up more time for your reps to focus on their interactions with customers.
Here are a few more specific benefits you can experience with a CPQ tool:
Quicker response times: how quickly your reps get back to customers who request a quote
Lower churn rates: the rate at which you lose customers
More quotes created: the number of quotes you are generating and sending to potential customers
Higher sales closing ratio: the rate at which you are successfully converting leads into loyal customers
Higher ROI: profit on any given sale
Higher revenue streams and savings
Overall, CPQ solutions act as time savers for businesses and their sales organization. And time for sales teams quite literally means money.
Without having to worry about the CPQ process, sales reps and managers have more time to focus on creating a well guided selling process. Also, they can spend more time evaluating their current sales process, picking out best practices, and identifying areas that need to be improved. In turn, your business has the potential to decrease the cost associated with selling and increase their revenue streams.
Does my business need a CPQ system?
It’s a fair question.
Tools like CRM and business intelligence have become a part of your everyday selling routine. Adding another software to the list isn’t any decision that’s made lightly.
To determine if your business needs a CPQ system, ask yourself the following questions:
Is your sales team experiencing slow turnaround times when generating quotes for customers?
Does your business include a lot of complex products with even more complicated pricing models?
Can your reps accurately and efficiently create quotes for those products?
Are you over-discounting products and losing out on that revenue?
Can quotes for customers only be found on the devices of the rep who generated it?
If you answered yes to any or all of those questions, it’s time for you to start shopping for a CPQ system.
Tip:If adding another software to your company’s tech stack sounds like a nightmare, use G2 Track to manage all of your current tools and monitor your spending.
5 best CPQ software solutions
CPQ software helps companies automate the process of configuring products, pricing the result, and generating quotes for the customer.
The beauty of CPQ software is that it takes care of the entire configure, price, quote process with potential customers, giving sales reps more time to focus on building rapport, establishing a relationship, and offering a positive customer experience.
The list below contains real user reviews from the best CPQ software on the market. To be included in this list, you must:
Include features for the basic activities that are part of the configure, price, quote lifecycle: configuration logic for the offering, standard and custom pricing, and quote tracking
Provide information that salespeople can use to quickly create offers that are beneficial for both the customer and the company
Offer workflows for users to create, modify, send, and track quote documents in different formats
Allow the use of CRM software, ERP systems, and other enterprise software data to define and manage product catalogs including pricing and bundling for hundreds or thousands of products
Evaluate the profitability of each offering based on financial rules, customer pricing, costs, and external factors like competitors, market changes, or laws and regulations
Integrate with other solutions downstream (to gather and analyze data for better quoting) and upstream (to propagate new pricing into other solutions such as e-commerce)
Assist users with analytics and reporting during the entire quoting process, and provide data and suggestions to improve the process
*Below are the top five leading CPQ software solutions from G2’s Fall 2020 Grid® Report. Some reviews may be edited for clarity.
1. Salesforce CPQ
Salesforce CPQ can help your business automate the quoting, contracting, and ordering process with your customers. This solution integrates seamlessly with Salesforce CRM, making it possible to handle all of your customer data in one centralized location.
What users like:
“I have experience using the application, as well as integrating it into the main sales negotiation cloud. It’s flexible in several segments. It’s fantastic, especially for marketing experts who like to fully follow their customer base who are potentially interested in our products and services.”
Oracle offers a quote management and CPQ system that focuses on enabling businesses to sell their solutions faster. This tool equips reps with everything they need to find the best product or service for each individual customer.
What users like:
“From the beginning when we were examining CPQ options, Oracle was really involved and also helpful from the beginning with recurring assistance.”
“It reduces or blocks jobs frequently, which can be very frustrating. The interface can be difficult to use, it may need training properly, and the training products are not great. Reporting and analytics devices are not sufficiently customized to be efficient for our application.”
Apttus is a multi-channel sales tool that works to help businesses accurately, quickly, and easily undergo the CPQ process. This solution can handle both simple and complex product configurations, as well as their associated pricing.
What users like:
“Prior to Apttus, we utilized a hands-on procedure to set up items and calculate rates while giving quotes to customers. This procedure was very difficult, intricate, high-maintenance, as well as error vulnerable. We now have capability to methodically track the progression of the quote and assess the effect of settlements on the final outcome.”
PandaDoc is a quote management and proposal software that empowers business throughout the CPQ process. Its overall purpose is to improve deal workflows, help companies gain insights into their selling process, and allow for a positive customer experience.
What users like:
“The platform is really nice. It makes creating quotes very easy. The template editor provides a lot of flexibility and the embedded calculator works very well.”
“I would like to get better notifications with different statuses. For example, other proposal tools have the ability for the sales rep to be notified via text anytime the prospect is currently looking at the proposal in real-time and for how long they have been looking at it.”
CloudSense is a CPQ software that is built specifically for high-volume or complex ongoing service businesses. Using artificial and business intelligence tools, this solution focuses on offering a seamless buying process for your customers while also increasing your overall ROI.
What users like:
“The whole idea of this product is business oriented, helping a firm to increase their sales. Besides, the software is customizable, where one can modify everything to suit their needs. Responses from the help desk are also immediate and this makes it faster to solve the complaints or the concerns of the users.”
“The implementation took very long. There was no understanding of the requirements that our business had. They developed a solution that made sense for them and we had to re-develop it to fit our business. The system is clunky. Takes a lot of clicks to create a product basket and there is a lot of waiting in between clicks.”
The only thing that beats the satisfaction of accurately configuring a product, pricing it, and generating a quote is increasing your sales. There are times when the human touch is necessary, like communicating with a customer, but undergoing the CPQ process is not one of them. Do yourself a favor and automate where you can.
Speaking of human touch, here are some tips to avoid sounding like a robot when cold calling your customers.
Mary Clare Novak is a Content Marketing Specialist at G2 based in Burlington, Vermont, where she is currently exploring topics related to sales and customer relationship management. In her free time, you can find her doing a crossword puzzle, listening to cover bands, or eating fish tacos. (she/her/hers)
No need to do it yourself
Let CPQ software take care of the little details so you can focus on the customer.