CPQ software is a labor-saving solution that results in a smoother, more efficient sales process. You can use CPQ software as a standalone product or, better yet, integrate it with your ERP system. Especially in the complex, fully customizable world of manufacturing, CPQ cuts out menial tasks like drafting proposals so your sales team can focus on creating lasting human connections with your clients.
In this article, you’ll learn what CPQ software is, how it can benefit your business, and how to get started with integration.
What Is CPQ? Configure, Price, Quote
CPQ stands for configure, price, and quote. CPQ software streamlines the sales process for complex and highly customizable products by helping companies generate accurate quotes and proposals while ensuring that products are feasible to manufacture and meet clients’ specific requirements.
Let’s break it down a little further. Here’s what configure, price, and quote really mean for manufacturers.
1. Configure
CPQ software makes it easy for your sales team to design customizable products according to the needs of your clients. The configuration process might involve selecting specific product features, letting clients choose between set options, or adding accessories. In manufacturing, your product likely varies greatly in terms of specifications, so allowing your sales team and clients to configure products accurately is vital.
2. Price
CPQ solutions make pricing easy. Not only does CPQ software give sales teams and clients accurate estimates quickly, it also integrates with your ERP system to provide real-time pricing information so you know how much a product will cost to manufacture. You can also adjust pricing based on factors like discounts, promotions, quantity, and quality.
3. Quote
CPQ software also automates the proposal process. Once the client has their product configured and priced, your CPQ software will generate professional and customized quotes and proposals for your clients. You can configure your proposal in the CPQ software to include product specifications, pricing details, terms and conditions, and your business’s branding.
Benefits of CPQ Software
You can probably already imagine how CPQ solutions can streamline the sales process. But let’s dive in and explore all the benefits of CPQ.
Accuracy
Human error is real. While that will always be the case, CPQ software reduces errors in quotes by ensuring that the products quoted can be produced to the client’s specifications. It also ensures the pricing is up-to-date by integrating with your ERP software and updating pricing in real time.
Efficiency
CPQ automates most of the manual work involved in sourcing pricing information, generating quotes, and drafting proposals. This allows your sales team to focus on client needs and answering inquiries.
Customization
There will be no hemming and hawing from your sales team when clients ask for complex customizations. CPQ software allows your team to answer myriad questions with confidence by displaying product variations and price quotes in real-time. After all, no client wants to hear, “I don’t know if we can do that.” Instead, give them an “Absolutely!”
Data Insights
CPQ software integrates with your ERP and CRM systems to collect data including customer preferences, quoting activity, and where they are in the buyer’s journey. This helps your sales team determine what to offer potential clients next and price them accordingly.
RELATED: Check out this case study of a successful CPQ implementation:
How Does CPQ Software Integrate with ERP Software?
First and foremost, ensure your CPQ software is compatible with your ERP software. Together, these systems exchange and analyze data, enhancing functionality across the organization. Your ERP consultant can help you select the best software for your needs and systems.
While not always a core component of ERP software, CPQ software streamlines the sales process. ERP systems, on the other hand, are more comprehensive. ERP modules may be specific to departments like finance, human resources, manufacturing, supply chain, and more.
ERP and CPQ software relate via integration and data flow to help maintain consistency and accuracy during the sales and pricing processes.
They also work together to automate workflows. For example, when a client accepts a quote generated by your CPQ software, this can automatically trigger the creation of sales orders and work orders in your ERP software.
Additionally, ERP systems store customer data, such as financial history, communication preferences, and order history. Through integration, your CPQ software can access this data to give the sales team a birds-eye-view of client information.
Finally, ERP and CPQ systems can exchange product data, again ensuring accurate product details and quotes when compared against your company’s manufacturing capabilities and available inventory.
Get More Sales with CPQ
You really can’t miss with CPQ software. The bottom line is that CPQ software will save your business time and money by freeing up sales teams to connect with clients on a deeper level. Salespeople and clients can discuss customizations and pricing with confidence.
If you’re unsure how to connect CPQ software with ERP software or are simply looking for advice, ask our experts at Godlan Consulting today.
What Is CPQ? FAQs
CPQ stands for “Configure, Price, Quote”.
CPQ, or Configure, Price, Quote, is a type of software used by businesses to streamline the sales process. CPQ software centralizes customer information, analyzes historical sales data, and speeds up the process of providing estimates, quotes, and invoices so salespeople can focus on building positive customer relationships.
Salesforce is a Customer Relationship Management (CRM) solution with a variety of marketing, customer service, and sales automation tools, and may contain or be integrated with a CPQ module. On the other hand, CPQ is a solution that focuses solely on configuring products visually, pricing, and quoting.
An example of CPQ is a salesperson using CPQ and product visualization to show a customer what a product will look like and cost depending on what features the customer wants – in real-time.
Yes, CPQ software is cloud-based. Cloud-based CPQ software lets you integrate your guided selling tools with your larger ERP system via the Internet so you can remotely and accurately track, analyze, optimize, and accelerate your sales cycles.
There are many benefits of CPQ, including: accelerated sales cycles, automated workflows, improved customer satisfaction, increased opportunities for cross-selling and up-selling, product visualization, and more.
