by CPQ is the process that allows salespeople to deliver up-sell and cross-sell opportunities to their customers accurately. It addresses three fundamental issues that all businesses face:
- The configuration of complex products with individual mixes of options and variants.
- Correct pricing is a delicate matter that depends on price lists, discounts, and ad-hoc conditions.
- Rapid and efficient quote generation.
Product Catalog
Whether buying a burger at a fast-food joint or a new living room couch, modern-day buyers want to know precisely what they’re getting. This means they’ll carefully research products and gather information from various sources before deciding. Understanding CPQ meaning as a clear and comprehensive product showcase online is essential for retailers wanting to win this group of customers.
The product catalog is where CPQ software (Configure Price Quote) stores all the details of a company’s products and parts. This enables companies to quickly and accurately generate pricing, discounts, and taxes quotes.
A well-designed product catalog includes essential information such as a product description, dimensions, and images. It should also provide details about the features and benefits of the item, including any warranty or guarantee provisions. It’s also helpful to include a list of available color and finish options and any accessories that may be included with the product.
In addition to providing valuable information to potential customers, a well-designed product catalog can help businesses save time and money by reducing the number of incorrect orders. A product catalog can also make it easier for sales teams to respond quickly and accurately to customer questions, improving the overall customer experience.
Pricing
The CPQ platform offers a streamlined, professional business proposal that can be sent to the customer for signature. This is vital because no sales organization wants to send a clunky price table or inaccurate information.
This is especially true for configurable products with millions of possible permutations that must be configured and priced correctly. If sales reps have to do this manually, it can be extremely time-consuming and challenging to do accurately. CPQ software calculates prices, considers ad-hoc discounts and other pricing rules, and delivers a quote that meets the client’s needs while remaining within company policy and legal requirements.
In addition, a CPQ solution can also help with cross-selling. This feature uses a product catalog to find other products that can be sold with the product in question and then automatically suggests those items to the salesperson for consideration. This can lead to additional revenue opportunities for companies that can do it well.
The main advantages of a CPQ system include speed, accuracy, and the ability to automate the entire quoting process. This reduces the time it takes to deliver a quote to the client, and it also reduces errors, leading to higher-quality sales quotes. This improves the customer experience and can increase sales, particularly in competitive markets.
Configuration
The second “C” in CPQ is configuration, which can also be described as “customize.” People like choices. Whether ordering dinner and avoiding certain ingredients or buying a jet, it makes sense for customers to select options that suit their needs. CPQ software gives them the ability to do just that.
This feature allows salespeople to build multiple sale configurations for the customer and then use AI to determine the best price based on pricing rules, discounting rules, and the cost of adding or subtracting specific components. This helps create accurate quotes without sacrificing margins.
It also means better visibility of all available options. Especially with complex configurable products, even the most knowledgeable salespeople might have only some possible combinations committed to memory. But a CPQ system can bring up suggestions based on the history of what other buyers have purchased, resulting in a more streamlined quote process and more excellent product expertise.
Finally, CPQ streamlines the quote process by eliminating the need to update a spreadsheet, PDF, or Word document manually. This reduces the time spent on preparation and ensures a consistent presentation to the customer. It also allows for faster response times. No sales organization wants to send a clunky, inconsistent document that might confuse the prospect and cause friction. Having a standardized document with up-to-date information helps everyone look professional and efficient, increasing the business’s chances of winning.
Quote
Once the product configuration and pricing are figured out, the next step is to create an accurate quote for the customer. CPQ software helps sales teams generate error-free, personalized quotes with ease. The software’s automation, standardized rules, and nested bundles ensure a business can deliver a professional, customized quote for every customer.
CPQ can also guide to help sales reps with upsell and cross-sell recommendations that increase the overall deal size. This step in the CPQ process is essential for businesses that need to maximize their margins and profit. In addition, a good CPQ software solution will have built-in protections for a company’s margins, such as automated price validation and preventative measures against rogue discounting.
A CPQ solution also benefits the company’s sales operations department, which will benefit from the software’s ability to shorten quote delivery times and eliminate significant errors dramatically. This allows a business to focus on its core customer engagement and satisfaction competencies rather than the administrative tasks that come with sales.
Getting your sales team to spend more time with customers is the best way to increase revenue and profits. By automating the configure, price, and quote process with a CPQ tool like PandaDoc, you can get high-quality, legally binding eSignatures and speed up your revenue cycle by weeks or months.
