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Boosting revenue rests at the core of any organization's aims. The key to achieving this is through investing into software in order to optimize time and resources. With this being said, what is CPQ software and how is it a significant revenue booster?
CPQ is an acronym for Configure, Price, Quote. The software automates these three elements whilst also streamlining data and centralizing pricing information. The software is widely adopted across the B2B industry due to its revenue generation, and has received praise for its reliability.
With the basics of CPQ being established, it is important to comprehend its functions and features, commencing with organization.
CPQ software consists of a multitude of organizational tools. For example, the Sales Playbook. The Playbook enables the customized selection of configurations, thus ensuring that pricing remains consistent for customers. This tool has also received positive recognition for its outlining of roles and responsibilities which sales teams must follow.
It also ensures the approval and validation of pricing quotes. This occurs thanks to approval workflows, which offer updates on quotes ahead of them being sent. After the quotes have been approved, they often cannot be altered, therefore validating them. It is thus due to the organization ensured by the software that it can be praised for generating revenue, giving companies a sentiment of cohesion.
CPQ software stores information on the current stock of a business, and demonstrates different currencies and prices in adherence to the customer's location. Whilst this process takes place, discounts will automatically be applied to certain quantities and to specific customers.
CPQ simplifies the quoting process by controlling feature combinations, product and service options, commission, discounts, and by automation. A key function of the software is to provide cross and up-selling opportunities throughout the configuration cycle. This happens by offering customers secondary products which they may need, and then bundling the products together at a cheaper price. Not only does this increase the average deal size of a company, but it also allows for more efficient introductions to new products. Supplementing this is the heightened efficiency of configurations and price changes. The software has been praised as all changes made to prices are automatically updated so that sales teams always have the most up-to-date price list and product catalog.
Adding to this, CPQ can store a history of the changes, thus making them possible to revert if necessary.
The use of CPQ reduces key errors which threaten the coherence of an organization. These threats include: the quotation of incorrect prices, products and incompatible product configuration. Such threats are grave due to their wasting of time and resources, being worsened by the likelihood of losing potential clientele.
As established above, CPQ software offers a variety of benefits. However, these are not all it has to give. Below are additional features of the software which strengthen its generation of revenue:
CPQ software accelerates productivity through its faster quote delivery. Its streamlining of data increases sales as teams can have faster response times to customers, increasing the likelihood of finalizing a deal. Its automated fee mechanisms conserve profit margins through the limitation of rogue discounting. This feature therefore maintains the economics of a company and sustains all potential revenue which may be made.
Its elimination of error ensures the finalization of deals and optimizes resources. Making quotes at a faster rate means that the length of the sales cycle is significantly diminished. In shortening the length of the cycle, there is consequently an increased lead conversion rate for businesses. This means that businesses are more likely to be finalized as vendors by potential customers, rather than falling short to a faster opponent.
CRM and CPQ are two separate softwares. CPQ is Configure, Price, Quote, whilst CRM is Customer Relationship Management. However, some customers opt to integrate CPQ with their CRM. CPQ essentially fulfills the same functions as CRM, yet caters to different elements in the sales cycle.
ERP (Enterprise Resource Planning) is its own software. When the two systems are integrated, an order taken by a company can be entered into the CPQ application and automatically transferred to the ERP application. This enables demand planning and eventual production.
The technical expertise required depends on who administers your CPQ. For example, the administration of DealHub CPQ has no requirement for custom coding. The implementation of CPQ is performed by experts on their team, and ongoing maintenance is simplified by dynamic rule logic. However, this varies. The administration of Conga CPQ takes place after customers take a five day course costing $4,500.
To conclude, CPQ centers the simplification of the quoting, configuration and sales processes. Its functions extend beyond simplification and also include automation, the eradication of error, and implementing organizational tools and strategies. Features of the software include: integration with other tools such as ERP, and the management of discounts and promotions. CPQ is a significant revenue booster due to its acceleration of productivity and conservation of profit margins. Beyond these factors rests its elimination of human error, which ensures the finalization of deals. Finally, CPQ software increases lead conversion rates.
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