CPQ - Configure, Price, Quote

Configure Price Quote - Solutions, Software and Proposals

Configure Price Quote software - the key benefits

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Configure Price Quote software shortens the sales processes by automating the configuration, pricing and quoting of complex products, services and bundles.

“configure price quote” software is getting attention from global companies looking to reduce errors and streamline sales of complex product. Configure price quote software will serve as a consistent front-office interface with all necessary integration to existing back-office systems.

CPQ (“configure price quote”) is more and more becoming a critical advantage in several industry verticals. Fast and accurate quotation processes is no longer something to strive for – it’s now a critical factor in the competitive landscape.

The primary benefits with Configure Price Quote software include:

  • Guided and automation sales process supporting your customers through important selection including configuration, quoting and ordering.
  • Central pricing processes for establishing, maintaining and publishing pricing for products, services and combination bundles.
  • Workflow for quoting including creation, management and negotiation of sales quotes.

Guided and automated sales process

  • Increased deal size by simplifying cross-sell, up-sell and solution bundles. Service contracts and other related services are quoted together with the product ensuring returning revenue for a longer period of time.
  • Reduced costs and increased customer satisfaction as incorrect orders are dramatically reduced.
  • Increased sales productivity when repetitive, time consuming manual work is eliminated.

Central pricing process

  • Pricing consistency and automatic pricing changes instantly available in all sales channels.
  • Defined structure for pricing to decrease the maintenance due to changing market conditions.
  • Pricing models based on customer segments with analytics feedback for continuous improvements. Built in dashboards for sales and pricing governance.

Workflow for quoting

  • Significant time savings to create, negotiate and convert quotes into orders.
  • Increased visibility and traceability in the quoting process.
  • Support for channel and partners sales for complex products.

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How CPQ analytics can improve product development

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One interesting aspect of an implemented CPQ solution is the possibility to analyze sales in a new way.

Traditional sales statistics answers the question what has been sold. This is somewhat interesting but normally it doesn’t bring very much new insight to the table.

With clever BI-tools (like Tableau or QlikView) it’s possible to slice the data in a way that will give you a better understanding on what’s tending and who is really doing profitable sales. But this still doesn’t answer the big question… With ordinary sales statistics one can tell WHAT is selling, but it doesn’t answer the question WHY?

A CPQ solution makes it possible to keep track of all quotations. This opens up for analysis where one can compare successful quotes with the less successful. This type of analysis will give concrete measures on what products that has been offered and make it possible to compare it what has actually been sold.

The analysis gives the possibility to reduce the product portfolio based on what has been part of actual quotations and if it has been sold. This gives a rating per sub-component whether a certain product is providing adequate value on the market.

The analysis also answers the question where there is possibility for new business. By understanding the type of deals that are refused by customers gives great input for product development.

This video (found on the Tacton Youtube-channel) introduces the concept of CPQ analysis.

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What is CPQ?

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Definition


CPQ is an acronym for Configure, Price, Quote. CPQ is used to describe the process of select components (configure), handle pricing (price) and generate documentation (quote). CPQ software is primarily used for complex products, services or a combination of the two.

CPQ solutions
  • supports a simple way to select valid product combinations with respect to product rules and limitations
  • price the product correctly according to bundling and discounts
  • creates an accurate and persuasive quote based on this information

CPQ software connects front and back end systems and automates the lead-to-cash process.

What is a CPQ process?


What’s included in a CPQ process? Is it all automated and in what way is it adoptable and flexible?

Configure: All complex products have limitations to how modules or sub-components can be combined. The user normally specifies key features and main products, a configurator handles all limitations and itty-bitty details.

Price: Manufacturing costs, geographies, competitive situation, and local protocols - the pricing can be just as complex as the product itself. The price adjustments should both be automatic but also offer flexibility and advice for sales tactics.

Quote: Documents describing a complex product includes texts, illustrations, data sheets, drawings. All specific for each offer generated. The level of details should be flexible and document generation should be fully automated.

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CPQ analytics

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Understanding the principal drivers for successful sales is essential when developing new products for a fast changing competitive market. This extends the understanding of important key differentiators and the effects by geography and segment.

Using big data from your CPQ solution unlocks analysis capabilities for data exploration. This enables analysis to understand customer segments, pricing and key business drivers. In the end the CPQ data can drive a more optimized and targeted product offering.

What’s really interesting is to see the link between customer need, product selection and likeliness to win the deal. This is the core idea of CPQ analytic, that the logs from the CPQ solution contains underlying cause for successful selling.

To analyze the perceived value there must be a link between three main components:

• What's in the product portfolio?

• What products offerings wins business?

• What value does the solutions deliver?

If you want to know more about CPQ analytics, stay tuned (subscribe to our newsletter).

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