What exactly is CPQ (Configure, Price, Quote)? Is your company in need of it? -
Finding the best methods to simplify your sales procedures is essential to run an effective and profitable sales operation. A popular method of managing and automating parts of the sales procedure is using CPQ (Configure Price and Quote) Software. What exactly is CPQ and what are its main benefits? Most importantly, do your business require it?
What exactly is an CPQ? What are the benefits of a CPQ?
The CPQ (Configure Price Quote) is a form of software used to sell that allows sales reps to quickly and effortlessly configure their the products and services they sell, create exact pricing, and then create quotes to be sent to the customers.
Here are a few of the key advantages from using an CPQ:
- Correct Product ConfigurationIt's simpler for sales representatives to design a customized set of services and products based on the prospect's particular needs and requirements. Since these are configured in the system, CPQs also reduce the chances for errors or misunderstandings.
- Professional-looking Quotes for Prospects:CPQs often have customizable templates, which can be used to standardize the style of the quotes, making them easy to read for prospective clients. This improves your chances of closing deals faster.
What is the best time to utilize a CPQ?
Businesses typically consider the possibility of implementing a CPQ approach when they are trying to do the following at a specific point of growth:
- Consistency and price compliance within sales reps
- Streamlining quote creation and management
- Shortening overall sales cycle
These are all especially important to consider when your sales department is sucked into numerous administrative tasks that they can take on as well as the time when you're looking to introduce scalable processes within the organization. Also, price compliance and consistency are crucial those who want to make sure that your sales staff isn't doing price changes that aren't authorized to meet targets.
However, what most people aren't aware of is that CPQs can be costly complex and complicated to implement and maintain.
Which are some advantages of using a CPQ?
Below are some of the disadvantages that can be encountered with CPQ systems: CPQ Systems:
- It isn't cheap. There are initial costs to consider in the event of implementing the CPQ, as well as annual subscription costs that can result in the cost being an expense for companies.
- It can take months to implement. Due to the complex nature of CPQ program, it could take months to set up and usually requires specific consultants to get it off the ground.
- Complex to use and maintain. CPQs can be inflexible and difficult to customize in many cases, which require a solid RevOps/Operations team to maintain it. They often require a massive overhaul every time packaging or pricing has to be changed.
While CPQs can be advantageous especially for ensuring price compliance and consistency, the challenges in the implementation and maintenance of the system could be in the way of sales reps' and operations teams' efficiency.
So, do you need it?
In general, CPQs are designed for large enterprises with a more complex product catalog. However, there are a couple of things to take into consideration, especially for small-medium businesses.
- The size and complexity of Sales and Operations Teams
- If you have a small sales force, then implementing the CPQ might not be required. The software may overpower what you're trying to accomplish; especially if you do not have an experienced operation team backing the sales staff. The effectiveness of CPQ software is contingent upon its implementation and maintenance which is usually handled by your Revenue Operations / Sales Operations team. Building a solid RevOps / Operations team is essential for getting the best value of an application such as CPQ.
- However, if you have an extensive sales force and an experienced RevOps team that can maintain the integrity of your CPQ solution, it might be beneficial.
- Product and Service Catalog
- If you offer simple, standardized products or services, then a CPQ may not be necessary. A tool like CPQ is ideal for complex products or services which require customisation and configuration for each account. But, there are other options that could offer this advantage without having to go to the whole process of creating the CPQ.
What's the alternative? (Especially for SMBs)
In accordance with the application There are plenty of alternative tools that could be used for your business.
In general, small and mid-sized businesses can benefit from using a dedicated quote software. It will allow you to create estimates quickly and efficiently. Most of these quoting programs already have a number of functions, such as price and product databases, customizable templates, and the ability to handle difficult configurations. They are the main elements you'd need from an CPQ software anyway. It is oftentimes a more scalable and efficient tool compared to a spreadsheet software. If you're looking for a complete list of quotation tools, look up HubSpot's list here.
One tool in particular that gives you all the benefits of a CPQ tool is called IQ.
"IQ" (which stands for Interactive Quotes) is a lighter CPQ alternative that's specifically designed specifically for small and medium-sized businesses.
For RevOps and Operations teams, it's a more flexible method to establish price compliance and consistency across your reps, and provides a good approval workflow for your quote process.
The platform also provides real-time analytics in the form of eSignatures, payments, and eSignatures that make for a faster and quicker quote-to-cash.
