Your days are jam-packed with tasks related to bringing in revenue for your company. And as it hits its stride and continues to grow and scale, your daily tasks become increasingly complicated — especially as your product line grows in complexity.
Configure, Price, Quote software (CPQ) enables sales teams to generate price quotes for orders quickly and accurately. An effective CPQ solution can help businesses streamline their invoicing and payment processes, and can simplify inventory management.
If you think using a CPQ tool is the same as sending a basic PDF invoice, think again. By using a reliable CPQ tool, you can streamline your sales process and reduce your time spent performing administrative tasks while your company, pipeline, and product offerings continue to grow.
Let’s break down the CPQ process so you can understand how it works.
The CPQ Process
Determine a pricing strategy.
Leverage your software to specify how pricing should be determined.
Send a Quote
Consider using a payment integration.
Take advantage of reporting features.
Facing more product options than ever, customers are no longer interested in purchasing one-size-fits-all solutions. Nowadays, consumer preferences are trending towards personalization.
Configuration is one of the best places to start. Through configuration, you can give buyers the custom products they’re looking for — working with them to ensure your offering has the specific features and functionality they're after through one straightforward, easily trackable system.
If your company has an extensive product catalog or a variety of different customization options, configuration features within a CPQ tool can help you quickly and easily create an offer for the product your prospect wants.
For example, if your company sells custom athletic gear and you are selling team wear to a local sports team, you can use configuration software to capture the correct customization of their order — including details such as color and fabric.
2. Determine a pricing strategy.
Once you have configured your offering to a buyer’s liking, price functionality allows you to optimize the price to give to the customer by taking into account the nuances of their purchase — along with any applicable discounts or taxes.
Depending on your company’s pricing strategy, the price functionality of a CPQ tool can support your ability to make the sale by modeling the correct price for each deal. Common pricing strategies include:
Competition-based pricing — Basing the price off of market rate for your offering.
Cost-plus pricing — Marking up the final price of your product to include the cost of producing your product plus how much your company intends to profit.
Dynamic pricing — Fluctuating the price depending on customer demand.
Rate-based pricing — Commonly used for service-based deals. The customer is charged an hourly rate for the amount of time it took to perform the deliverable.
Value-based pricing — Charging how much a customer is willing to pay for the product.
3. Leverage your software to specify how pricing should be determined.
With a CPQ tool, you can specify how each product's pricing should be determined and generate it automatically. You can also vary pricing depending on a product's functionality — if that suits your company and the sale you’re working to close.
Continuing the team sportswear example, if your company offers a pricing model that lowers the price per unit for high-quantity orders, your CPQ tool should be able to calculate the correct price.
Let’s say your sportswear company charges $25 per jersey for orders of 20-40 units, and $18 per jersey for orders of 50-70 units. If the buyer you are working with is ordering a total of 60 units, your CPQ tool should know to calculate the total price using the $18 per jersey rate.
4. Send a quote.
Once your customer’s order has been configured and the pricing has been set, it’s time to send over a quote. Using a CPQ tool, you can instantly send accurate quotes to all major stakeholders, speeding up the process for your sales team and customer.
By generating automatic quotes within your CPQ tool, you can create more accurate quotes in less time, and you can eliminate the back-and-forth that comes with sending quotes and invoices via email. This will allow you to streamline any necessary approvals and collect signatures electronically.
5. Consider using payment integration.
Another common feature of CPQ software is online payment integration, allowing you to collect payments online when you send the quote to your customer.
Not only does using this kind of tool make it easier for you to send quotes to buyers, it also ensures that those quotes are polished and on-brand. This means your contacts are getting a consistent experience, which reflects well on you and your company as a whole.
6. Take advantage of reporting features.
Once the deal has been closed, CPQ software can help you facilitate more robust reporting practices to drive more sales in the future. If you use a CPQ tool that can connect directly to your CRM — such as the sales quote tool within HubSpot Sales Hub — you can maintain accurate records of what was sold in each deal, all accessible through your contact records in CRM.
The HubSpot Sales Hub includes features that suit the activities of the CPQ lifecycle — resources that allow for the configuration logic for your offering, standard and custom pricing, and quote tracking.
The Sales Hub lets you keep tabs on the products or services you sell in its "Product Library." There, you can set prices for "products" in multiple currencies, select your preferred billing frequency, and track unit costs — among other actions central to the CPQ process.
HubSpot users can also generate accurate, professional-looking quotes and proposals through HubSpot's Sales Quote Tool — a resource that automatically pulls data from a customers' contact, company, and deal records to create accurate, standardized, and convenient quotes.
Oracle CPQ is another resource that works through the CPQ process to help you boost revenue and streamline sales processes. The software contains tools to centralize your business rules, product data, pricing information, discounting controls, contracts, and renewals — making for better organized, more efficient sales efforts.
The value of the software's configuration resources comes from its emphasis on guidance and simplicity. Oracle CPQ offers effective, straightforward steps to identify customer needs and relevant product offerings.
It also uses automation for real-time, accurate, efficient pricing. And its quoting features allow you to produce high-quality, custom-branded quotes, statements of work, engineering documents, datasheets, and contracts easily and reliably.
Conga CPQ is a multifaceted solution that addresses virtually every business challenge that can stem from the CPQ process. It contains features that allow you to sell a growing, complex, or configurable product catalog across multiple channels — including synchronized processes for complex pricing and guided selling wizards for configurable products.
With Conga CPQ, you can incorporate complex products and various services into a single quote. It also contains features like machine learning, a centralized repository for all revenue-related data, and user-based workflows to help you address hitches in your sales process.
Start keeping better sales records and take your invoicing process to the next level with a CPQ software solution. To learn more about setting prices that help you make the sale, check out this post.
Originally published Sep 29, 2020 3:45:00 PM, updated September 23 2021