The Ultimate Guide to CPQ: Understanding Configure, Price, Quote and its Impact on your Sales Success
What does CPQ stand for and how does it work in practice?
CPQ stands for Configure, Price, Quote. At its core, CPQ is a technology that enables businesses to configure products or services, determine pricing, and generate quotes quickly and accurately. This technology is typically used in industries such as manufacturing, telecommunications, and software, where there are complex products and services that require customization.
The CPQ process begins with configuring a product or service. This involves selecting the desired features, options, and specifications that are unique to a customer's needs. Once the product or service is configured, the price is determined based on the customer's specific requirements, as well as any discounts, promotions, or bundles that may apply. Finally, a quote is generated that includes all of the details of the configured product or service, the pricing, and any terms and conditions.
The differences between CPQ for B2B companies and CPQ for B2C companies.
B2B CPQ software is designed to handle complex sales processes involving multiple products or services, as well as complex pricing structures such as discounts, volume-based pricing, and contract pricing. B2B CPQ also needs to handle the unique requirements of each customer, such as their specific needs, budget, and purchasing history.
On the other hand, B2C CPQ software is focused on making the quoting process as simple and intuitive as possible for the end customer. It may include features such as upselling and cross-selling suggestions, as well as visualization tools to help customers choose the right product configuration.
Overall, while both B2B and B2C CPQ software aim to simplify the sales quoting process, they have different priorities and features based on the needs of their respective customers.
The practical functionalities behind CPQ
CPQ technology includes a wide range of functionalities that can help businesses streamline their sales process. These functionalities include:
Product and service configuration
Pricing and discounting rules
Guided selling and upselling
Proposal and quote generation
Integration with other systems such as CRM, ERP, and e-commerce platforms
For companies leveraging these functionalities, the Aberdeen Group reports a whopping 30% increase in effective sales.