What exactly is CPQ (Configure, Price, Quote)? Does your business need it? -
Finding the right devices to improve your sales procedures could be the key to running a more successful and profitable sales operation. One popular solution for organizing and automating aspects of sales processes is to use CPQ (Configure Price and Quote) Software. But, what exactly is CPQ as well as what exactly are its primary benefits? In addition, is your company require it?
What exactly is a CPQ? What are its benefits?
The CPQ (Configure Price Quote) is a kind of sales software that allows sales reps to quickly and effortlessly configure their items and services, calculate exact pricing, and then create quotes to be sent to clients.
Here are some of the key advantages that come with the CPQ:
- Correct Product ConfigurationIt's simpler for sales representatives to create a custom-designed package of goods and services based upon a prospective customer's wants and needs. Because they are integrated in an existing system CPQs also reduce the chance of miscommunications or errors.
- Professionally designed quotes for prospective customers:CPQs often have customizable templates, which can be used to standardize the style of the quotes and make them simple to understand for prospects and clients. They also increase your chance of closing deals more quickly.
The right time is when to use the CPQ?
The majority of businesses think about the possibility of implementing a CPQ method when they wish to do the following at a specific point of expansion:
- Cost compliance and uniformity among sales reps
- The process of creating and managing quotes is streamlining.
- A shorter sales cycle overall
They are especially crucial to consider when your sales department gets caught up in more administrative tasks than they are able to handle or handle, and also those who want to establish scalable processes within the organization. Additionally, price conformity and consistency is important for those who want to make sure that your sales team isn't performing price adjustments that aren't legal in order to hit the quotas.
But what many aren't aware of is that CPQs can be costly, complex, and difficult to set up and manage.
Are there the advantages and negatives to using a CPQ?
There are a few disadvantages to consider with CPQ systems: CPQ methods:
- It isn't cheap. There are initial costs to consider when choosing to implement the CPQ and the ongoing fees for subscriptions that can result in it being a major expense for companies.
- It can take months to implement. Because of the complexities surrounding CPQ program, it could take months to implement it and usually requires specific consultants to help get it off of the ground.
- Complex to use and maintain. They can be rigid and are difficult to alter as well, and usually needs a very strong RevOps / Operations team to keep it. It often requires dramatic rework whenever packaging or pricing needs to be changed.
Though CPQs can be advantageous especially in enforcing price conformity with consistency and conformity, difficulties in implementing and maintaining the tool might be detrimental to your sales reps' and operations teams' performance.
Do you require it?
The majority of the time, CPQs are designed for big companies with a complex product catalog. However, there are a few factors to consider particularly for smaller-medium enterprises.
- The size and complexity of Sales and Operations Teams
- If you've got a tiny sales force, then implementing an CPQ isn't required. The system might be too much for what you're trying to do; all the more if you do not have an experienced operations team to back up the sales staff. The effectiveness of CPQ software is contingent upon its maintenance and implementation, often done by the Revenue Operations / Sales Operations team. A strong RevOps / Operations team is essential for getting the best value of an application such as CPQ.
- However, if you have an extensive sales force as well as a strong RevOps team in place to manage the integrity of your CPQ system, then this could be a good idea.
- Product and Service Catalog
- If you offer standard items or services, using a CPQ is not required. An instrument like CPQ can be used for complex products or services that need customization and configuration per account. But, there are other tools that can give this benefit, but without to the whole process of creating the CPQ.
What's your alternative? (Especially specifically for SMBs)
In accordance with the application depending on the use case, there's a variety different tools you can use for your company.
In general, small and mid-sized businesses can benefit from using a dedicated quotation software that will allow you to create quotations quickly and precisely. Many of these quoting programs already offer many features such as product and pricing databases, customizable templates, as well as the capability to manage complicated configurations. These are typically the most important things you'd want from an CPQ software. It is oftentimes a more powerful and scalable tool in comparison to using a manual spreadsheet program. For a list of comprehensive quotation tools, browse HubSpot's selection below.
However, one tool which offers all the advantages from the CPQ instrument is IQ.
IQ (which means Interactive Quotes) is a light CPQ option that's designed to be used by small-medium-sized companies.
For RevOps as well as Operations teams, it's a more flexible option to ensure price conformance and consistency among reps. It also provides an efficient approval process for the quoting procedure.
It also offers real-time analytics as well as eSignatures and payment to make it a much simpler and quicker quote-to-cash.
