What is a CPQ Process
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Configure, price, and quote (CPQ) software helps companies automate and streamline the process of configuring and quoting products and services. CPQ software typically integrates with CRM and ERP systems to give sales reps and other users access to accurate pricing and product information. CPQ software can also help companies generate more accurate quotes and improve their win rates by helping sales reps configure products and services that meet customer needs and budget. In addition, CPQ software can help companies automate pricing rules and discounting, and improve their quoting process overall.
Sales representatives in companies that use configure, price, and quote (CPQ) software can create quotes faster and more accurately than those relying on manual processes or generic CRM and ERP software. CPQ software helps sales reps determine the right products and services to sell to a customer, how to configure those products and services, and what price to quote. In the past, many sales reps used a combination of generic CRM and ERP software, Excel spreadsheets, and their own knowledge to generate quotes.
This process was time-consuming and often resulted in errors. CPQ software streamlines the quote creation process by giving sales reps a user-friendly interface for configuring products and services and automatically calculating pricing based on the customer’s specific needs. This enables sales reps to create quotes quickly and accurately, which can lead to more sales and happier customers. CPQ software can also help companies increase their profits by improving pricing accuracy and simplifying discount and pricing rules.
In addition, CPQ software can help companies save time and money by automating the quote creation process. If your company is considering CPQ software, there are a few things to keep in mind. First, you’ll need to decide whether you want a stand-alone CPQ solution or one that integrates with your existing CRM and ERP software. Second, you’ll need to choose a CPQ vendor that offers a solution that meets your company’s specific needs.
The Process of CPQ can be broken down into four main steps:
- Product and service configuration: Product and service configuration in CPQ is the process of creating and maintaining a product or service catalog within a CPQ system. This catalog is used to store all the necessary information about the products and services that your company offers, including pricing, product options, and availability. Creating and maintaining a product or service catalog within CPQ can be a daunting task, but it is essential for ensuring that your sales reps have accurate and up-to-date information about the products and services that your company offers. In this article, we will discuss the steps that you need to take in order to create and maintain a product or service catalog within CPQ.
- Pricing calculation: Pricing calculation is a very important aspect in the world of CPQ (configure, price, quote). In order to ensure that a company is able to generate accurate quotes, it is important to have a pricing calculation strategy in place. There are a few different methods that can be used in order to calculate prices, and the one that is used will ultimately depend on the products being sold and the specific needs of the company. One of the most common methods of pricing calculation is known as the “cost-plus” method. This approach simply involves taking the cost of the product and adding a markup percentage on top of it. The markup percentage will vary depending on the company, but it is typically between 20-30%. This method is relatively straightforward and easy to implement, but it does have some drawbacks.
- Quote creation: In CPQ, a quote creation is the process of creating a quote for a customer. This can be done manually or through an automated process. There are several steps involved in creating a quote, including:
- Selecting the products or services that will be quoted
- Configuring the products or services
- Selecting the pricing options
- Adding discounts and promotions
- Adding taxes
- Adding shipping and handling charges
- Generating the quote Once the quote is generated, it can be sent to the customer via email or printed out and mailed. The customer can then review the quote and decide whether to accept it or not. If the customer accepts the quote, they will sign a contract and make a down payment. The quote will then be converted into an order and the products or services will be delivered.
- Quote approval: CPQ software is often used in conjunction with ERP (enterprise resource planning) and CRM (customer relationship management) software, as it can help sales reps keep track of customer information and pricing data. One of the key features of CPQ software is quote approval. This feature allows companies to set up approval workflows for quotes, so that quotes must be reviewed and approved by a manager or other designated individual before they can be sent to the customer. This ensures that all quotes are accurate and conform to the company’s pricing policies. Quote approval can also help to prevent pricing mistakes that could result in lost sales or customer dissatisfaction. Configure-Price-Quote software is a valuable tool for companies that want to streamline their quoting process and ensure that all quotes are accurate and compliant with company policies. Quote approval is a key feature of CPQ software that can help to prevent pricing mistakes and ensure that all quotes are reviewed and approved before they are sent to customers. The approval process is a key feature of CPQ that helps ensure accuracy and compliance with company pricing policies. By customizing the approval process to fit the needs of the organization, companies can ensure that all quotes are reviewed and approved before they are sent to the customer.
