CPQs, the new Eldorado for selling complex products and services
You receive a quote. Unfortunately, by the time you make your quotation, the customer has already chosen the offer of a more responsive competitor.
As it is often the case, the customer was in a hurry and placed their order with the first supplier who has offered a fair price quote.
Many companies selling complex products or services experience this situation.
With so many variables that can change quickly, it is difficult to provide an accurate and professional quote rapidly.
Although the problem has been around for a while, many sales managers are currently unaware on how to solve it effectively.
Therefore, in order to tackle this problem, CPQs has become available to the market.
What is a CPQ?
A CPQ (Configure Price Quote) is a software that provides real-time quotes for complex products or services.
This software allows salespeople and customers to generate quotes quickly with consistent and accurate pricing for highly customized product or service configurations.
It often works in tandem with CRM platforms, ERP programs, and/or other business technologies to ensure that the data considered and the price displayed are reliable and accurate.
Without going into detail, quotes produced with CPQ software are automated according to a set of pre-programmed rules, ensuring error-free pricing that accounts for quantities, discounts, customizations, optional product features, multiple revenue types and incompatibilities.
CPQ Highlights:
- Creates instant quotes and self-service orders for all types of customers.
- Rule-based application for 100% complete configurations and error-free quotes.
- User interface is simple, intuitive and requires no training.
- Can leverage data from ERP, CRM and CMS.
- Creates customer specifications, standardizes requirement gathering.
With its functionality and potential for excellent return on investments (ROI), CPQ is the future for many companies. In 2015 the CPQ market was valued at $157 million and in 4 short years, it has grown to an estimated $1.42 billion. CPQ adoption will continue to grow as companies see the real benefits of using it in combination with their CRM and ERP systems.
Benefits of a CPQ
Time-consuming processes such as generating quotes, proposals and obtaining approvals take up 66% of a salesperson’s day (Zety).
Therefore, when a CPQ is deployed and used correctly, it can have many benefits:
- Fast quotes
The main quality of a CPQ is that it allows you to generate quotes instantly. When you consider that 50% of customers place orders with the supplier who responds first to their request, you realize the commercial potential that a CPQ can have for a company. The software offers a double advantage: being able to respond to more customers and more quickly.
- Accurate Quotes
Companies don’t want to speed up the process if it means giving incorrect prices, unapproved discounts, or promising customers configurations that aren’t available…
Paradoxically, CPQ avoids all these problems by clearly establishing pre-programmed rules. With a CPQ system, every conceivable configuration, price, discount and scenario can be specified, making product configurations easy.
The prices set by a CPQ are therefore guaranteed to be error-free, which has several advantages listed below:
It can happen that a salesperson who wants to close a sale offers an excessive discount, due to the fact that the salesperson tries to ensure a fair price for the customer and the company, which ends up costing the company more than the sale brought. This scenario has its added disadvantage of making future negotiations with the customer difficult as the salesperson tries to ensure a fair price for the customer and the company.
On the other hand, if you are in the business of complex products, you know that a bad data report can at best, foolishly waste your time or at worst, have disastrous consequences and be (extremely) expensive. A CPQ allows you to avoid human errors and thus save a lot of time and money.
- More efficient salespeople
A CPQ increases sales reps’ efficiency by giving them more time for the customer relationship and prospecting effort. According to Salesforce Research’s “State of Sales” report, only 34% of a salesperson’s time is actually spent selling.
This number leads to three important concepts:
– The more your processes can be streamlined, the more time salespeople have to meet with customers and close sales.
– Any time that can be freed up for salespeople to talk with customers is a plus.
– Your salespeople need to be able to make effective and informed sales calls.
Excellent calls can be made with CRM applications that allow users to conduct in-depth research and take notes.
A CPQ is a great ally when it comes to closing the sale. The software allows you to accurately configure products, apply pricing, quantity discounts and schedule approvals into the system. This effortless automation demonstrates your expertise and builds customer confidence.
- Accelerated onboarding
CPQs are software designed to be easy to use. Users can use it without training, whether they are internal users, particularly the sales force, or customers themselves. Much of the complexity is hidden in the business expertise that is managed in the back office of your CPQ. In this way, new sales staff will no longer need to spend several months getting to know all the specifics of each product and can be operational right away.
- Successful customer experience
74% of buyers are likely to switch suppliers if they find their buying process too complicated. (Salesforce)
With a CPQ, the customer in a hurry will be able to receive an answer all inclusive, evenings, weekends and holidays. More generally, they’ll be able to get their quotes when your sales teams are not available.
Is it for you?
You see the value of a CPQ. Yet you’re not sure whether you need one. To find out if you should actively consider adopting a CPQ, pay attention to these seven signs:
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Your salespeople collect customer briefs in disparate formats (email, Excel file, CRM) and you have trouble retrieving accurate information over time.
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You use old quote configurators or Excel matrices.
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Your break-even point on a file is too high due to your sales management costs.
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You send inaccurate quotes to your prospects.
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Someone is manually reviewing all your quotes before sending them to the customer.
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You have too many requests for quotations to process and your sales representatives regularly complain about quotation delays.
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Your average quote turnaround time exceeds 48 hours.
At Packitoo we have developed HIPE, a CPQ specialized for the packaging industry. We benefit from a great deal of industry expertise and have the insight needed to solve the challenges of selling custom packaging.
In addition to being a CPQ, HIPE also enables collaborative project management and reduces the back and forth between customers and internal teams.
Visit our website or request a demo of our software.
Learn more about our tool and how we can help you achieve outstanding results: