Remember the last time you lost a customer because you couldn’t keep up with demand? Providing buyers with a price and quote quickly can be tricky when you’re inundated with leads. Rushing through pricing isn’t a great option because you might make mistakes—and pricing mistakes can be expensive. That’s why you need configure, price, quote software (known as CPQ.)
A CPQ can help you, the modern manufacturer:
This guide explains everything you need to know about CPQ and how it can drive process efficiency and productivity.
What is Configure, Price, Quote Software (CPQ)?
Configure, price, quote (CPQ) software is a tool that makes configuring a product, pricing it, and generating a quote easier. At least, that’s what a CPQ does in its most basic form. The latest CPQ options offer various additional tools to support these three primary functions, as explained below
Configure
Modern CPQ products offer a built-in visual configurator that enables buyers to view product configurations in 3D, AR, and VR. The visual configurator provides the chance to study the product before requesting a quote or placing an order.Giving buyers an immersive visual experience is an excellent way to leave a mark. Research shows that 65% of the population learns and retains visual information the best. And with a visual configurator, buyers will have a clear idea about what the product will look like once it’s manufactured, which helps eliminate any purchase anxiety.Using a visual configurator also signals to your clients that you’re a tech-savvy manufacturer who stays ahead of the curve and has a grasp of the latest technology.
Price
According to a 2022 CX Accelerator report, 66% of companies reported that customers are less patient when interacting with agents or service teams than they were in 2021.This information shows us that meeting your buyer’s need for speed is critical. Mistakes, however, can be costly—pricing yourself out of the competition means losing business; underpricing can reduce your profitability. So, how do you combine speed with accuracy when you have lots of leads to nurture? With CPQ.
CPQ helps automate pricing. When a buyer or your sales rep initiates a pricing request for a configuration, the CPQ use its powerful rules engine to compute a price instantly, enabling them to move quickly to the next step in the sales process.
Quote
Quotes take sales reps a lot of time. Translation? Sales reps are busy generating quotes while buyers are kept waiting. If a competitor sends in a quote before you, you might lose the sale altogether.A CPQ, on the other hand, reduces this waiting period to almost nothing. Buyers can quickly get all the documents and details necessary to present the proposal to their buying committee and get buy-in.
What to Expect from Modern CPQ Software
Modern CPQ tools are loaded with features that significantly impact a manufacturer’s efficiency. From visual selling to automated internal processes, modern CPQ software can redefine the way your business operates. Let’s take a look.
Visual Selling
According to research from Gartner, 80% of B2B sales interactions are expected to occur via digital channels by 2025. Static images won’t be good enough to beat the competition. You need a differentiator that makes a buyer’s experience with you stand out. That’s where a CPQ’s visual configurator can help.Visual selling provides buyers with an immersive experience. Complex product configurations can be difficult to understand using a static image like a photograph. But with a visual configurator, buyers can view your product in 3D, differentiating you from competitors that rely on product descriptions and generic product shots.
Dynamic Pricing
Manually calculating a price requires customers to wait for days, especially if you sell complex products. CPQ removes this waiting period and gives buyers a price in seconds, accelerating your sales cycles. It also helps eliminate human error in the pricing process.The latest CPQ products go a step further than calculating an instant, error-free price. They factor in internal discounts, promotions, and external data like materials, supply costs, and market demand to calculate a price that’s most likely to convert under current conditions.
Accessible for Buyers
A CPQ enables buyers and sales reps to access configuration information whenever they need it—no matter where they are.For this, you need a CPQ that offers ecommerce integration. When you integrate the CPQ with your ecommerce website, buyers can access the visual configurator, select a configuration, and get a price themselves in a few minutes—and without your help.
KBMax CPQ users experience an average 40% increase in conversions, thanks to the visual configurator. The ability to view configurations on your website also makes it easier for global buyers to order from you.
Always Available Cloud-Based System
Industry-leading CPQ software is available in the cloud, which enables sales reps and customers to access the information they need, when they need it, using any device. Cloud-based systems are also great for collaborating, sharing data, and communicating with your team members and external partners.Additionally, a cloud-based system costs less to maintain. And your vendor will ensure the system is bug-free and available as long as you continue your subscription.
No-Code Rules and Constraints
The rules engine is a CPQ system’s brain. The best CPQ tools offer a no-code rules engine you can configure without writing a single line of code. General business users can create rules without the help of IT or external agencies, helping you launch products and react to changes in the market more quickly.
Automate Internal Processes
A McKinsey report reveals that automation can improve productivity across the globe by 0.8% to 1.4% per year. Your competitors might already be automating their workflow, and if you’re looking to get started, investing in a CPQ is a great first step.CPQ automates various parts of your process. When the buyer selects a configuration, the CPQ captures the details and generates a quote.
Once the buyer completes the purchase, the CPQ auto-generates production documentation, including CAD drawings, CNC cut sheets, assembly instructions, and a bill of materials. The CPQ also relays information to other tools you’ve integrated, such as your CRM and ERP.
Your engineering team saves time because they won’t have to create CAD drawings manually. Sales reps save time because they won’t have to create quotes manually. Plus, you reduce administrative workload by automatically migrating information between business tools.
Should You Invest in a CPQ Tool?
Nucleus Research reveals that CPQ returns $6.22 for every dollar you invest—that’s a 622% return. CPQs deliver these returns through a combination of efficient processes, larger deal sizes, and faster sales cycles.So you can see a clear financial benefit to investing in CPQ. However, you also stand to gain on other fronts. For example, you’ll improve customer retention and satisfaction rates by responding to their pricing requests in real time. You’ll also establish yourself as a leader who uses best-in-class business technology, which reflects favorably on your product offering.