A quick Google search brings up dozens of CPQ tools. Each claims to improve your bottom line and make your processes more efficient.
Most can’t deliver on that promise, at least to the extent they claim. So how should you choose advanced CPQ software that meets your needs and exceeds expectations?
This guide explains everything you need to know before investing your money in a CPQ solution. We help you understand the basic features of a CPQ and additional features that will future-proof your software well into the future.
Basic Features of CPQ Solutions
Every CPQ solution offers three basic components. Think of them as table stakes for CPQ–the bare minimum you can expect.
1. Product Configuration
CPQ solutions help sales reps select a product configuration quickly. Reps can access a database of products with descriptions of what the final product will look like when it rolls off the production line. The sales rep follows the prompts on-screen, and the CPQ software helps them configure the right product for the customer without jumping through unnecessary hoops.
2. Pricing
CPQ solutions help price configurations fast. Your buyers won’t have to wait for sales reps and engineering teams to collaborate and manually calculate the price for each configuration option they shortlist. Instead, prices are calculated automatically in line with your pre-configured pricing rules. This automated pricing functionality eliminates room for human error and rogue pricing by sales reps. Pricing is always consistent, requiring fewer approvals, which speeds up sales cycles and increases customer satisfaction.
3. Quoting
CPQ systems auto-generate quotes, preventing sales reps from wasting time preparing quotes manually in Excel. Automated quotes free up sales reps’ time and allow them to focus on other tasks that require more of a human touch.
With CPQ software, manufacturers can save time and resources on training new hires. Why? Because reps don’t have to take as much responsibility for pricing and quoting. And since CPQ generates quotes within seconds, buyers can make faster purchase decisions, increasing your chance of securing a sale.
What Qualifies a CPQ System as Being “Advanced”
If you invest in the right CPQ solution, you can expect to generate, on average, an ROI of 622%, according to Nucleus Research. But what is the “right” CPQ?
Of course, it depends on your needs. If you sell a limited selection of standard products, then a basic CPQ solution with the three capabilities outlined above will probably do the trick. But, if you sell highly technical products or want to provide a high degree of customization, you will need to implement something more advanced. Advanced CPQ software offers the basics plus additional features to significantly improve your customer’s buying experience and profitability. Advanced features amplify the CPQ’s capabilities and enable you to differentiate yourself from competitors that continue to deploy traditional CPQ solutions. Here are the advanced features you should look for in CPQ systems:
1. Visual Configurator (Ideally, 3D with AR/VR potential) Advanced CPQ software lets manufacturers build 3D visual product configurators. These visual configurators generate 3D renderings of product configurations in real time. Users can interact with the configurator to design products to their exact specifications and see what their finished product will look like before it’s manufactured.
Visual configurators help both sales reps and buyers. Think about a new sales rep who doesn’t have much experience. They’re likely to make a mistake when discussing configurations with buyers. But a visual configurator fills in all the gaps in the rep's knowledge and eliminates the guesswork. It aligns buyers and sellers, driving mutual understanding, collaboration, and customer satisfaction.
Furthermore, visual product configuration makes it far easier for buyers to discuss potential configurations with their team and get buy-in from management. Consider that a B2B buyer typically discusses their product choices with a buying group of six to 10 decision-makers. With a visual configurator, they can more easily get everyone on the same page with nothing lost in translation.
Crucially, through seamless integration with your ecommerce platform, manufacturers can embed their visual product configurator into their website. Once integrated, visitors can interact with your products in their own time. They can see what you’re all about and, depending on how you set up your configurator, place an order on the spot—everything’s automated.
2. No-Code Rules Engine
CPQ systems price products, generate quotes and guarantee the viability of configurations based on product and pricing rules. Creating these rules is the responsibility of the manufacturer and their partners.
Basic CPQ solutions have a limited number of rules to choose from. And creating new rules requires programming expertise, which can mean additional costs for companies with small in-house IT teams.
Advanced CPQ solutions, on the other hand, empower general business users to create rules themselves, even if they have no programming abilities. This is made possible by the no-code nature of the rules engines. Users can build the most advanced configuration and pricing logic without writing a single line of code. Everything’s drag and drop, and the easy-to-understand interface makes it impossible to make mistakes.
3. Automation
You’ve probably considered automating one or more of your engineer-to-order processes at some point—it can supercharge productivity and efficiency. Well, CPQ can automate multiple processes in one fail swoop. You can easily streamline the end-to-end engineer-to-order workflow without having to invest a ton of capital.
Advanced CPQ software starts by automating complex production configuration, pricing, and quote/proposal generation. It then automates much of the engineering workload, creating CAD files and BOMs for the shop floor without any human input. This CAD and design automation releases the pressure on the engineering department, letting them focus on R&D.
CPQ also speaks to your CRM and ERP, pulling customer data to personalize the sales process better and automating all of your back-end inventory management processes. There’s little room for human error, which protects you from bottlenecks and defective production.
Boost Your ROI on CPQ Systems by Selecting an Advanced Tool
Bare-bones CPQ solutions generate limited ROI because they focus on the most basic tasks.
Advanced CPQ solutions provide immersive experiences, speed, and convenience for the modern B2B buyer. They automate some of the most complex, resource-heavy processes like CAD and design automation, saving significant time and money.
The differentiating features discussed in this guide will help you find the right tool. If you choose wisely, the increase in revenue and profitability will fuel your growth for years to come.