CPQ stands for Configure Price Quote and is software that essentially improves the buying experience of your customers. It achieves this by supporting your sales team to:
- Configure products with many variations,
- Price these products while taking into consideration things like government rebates, internal pricing strategies, industry incentives and even commission structures, and then
- Quote an individual product or packages (including full documentation) with the touch of a button – completely automated.
CPQ technology has been a fundamental business driver for decades. In the past, it was used behind closed doors to address complex sales orders from sales reps and customers in the manufacturing industry. However, 2017 has seen positive growth for the software solution and a rise in its profile.
The forecasted growth for this technology is based on two factors:
- CPQ technology is no longer only being used for complex sales.
According to Forbes, “Businesses are using CPQ across all product solution lines to sell accessories, bundle and configure service options.”
- More industries are using this technology.
CPQ technology is now moving beyond manufacturing and is being used in industries such as financial services, media and entertainment, high-tech, healthcare and communications. A major Australian telecommunications giant only recently discussed its billion-dollar project that focuses on improving consistency for customers. This project features a CPQ system at its core.
The concept behind CPQ is improving the total customer experience through automation and digitisation. This has been resonating with many growing Australian businesses, in particular, those that are adopting a smart manufacturing approach.
So, how can CPQ software benefit your business?
According to Aberdeen Research, CPQ software minimises “the complexity of the quoting and proposal process by minimising the people and functions involved.” This is not to say you won’t need salespeople anymore, rather, CPQ empowers the sales team with data to help them close more deals faster.
There are many elements of CPQ software, and end-users don’t always utilise every aspect of the solution. Some of the top applications include:
- Guided selling and automated needs analysis
- Proposal generation tools
- Automated quoting
- Deal profitability analysis
- Workflow-based approvals
- Contract negotiation
CPQ is not restricted to direct sales situations. Manufacturers can build into their systems tacit knowledge so that whether their clients are purchasing from either you or your resellers, they will have the same optimum experience.
On the other end of sales, CPQ can also support fulfilment. A local subsidiary of a major Japanese medical device firm recently invested in CPQ to improve local fulfilment processes. With CPQ, the business is now able to ensure that clients receive the right product at the right time, regardless of where they are based.
In line with smart manufacturing processes, CPQ systems are available as cloud solutions or on-premise. They are mobile in nature and can be used on a range of mobile devices.
When a member of your sales team visits a prospective customer, they can take the CPQ software with them on a tablet device. This allows them to answer all questions and explain the value of what the customer wants. Everything they need to know is there at their fingertips.
There’s also the efficiency and accuracy of the CPQ software in delivering real-time prices and quotes. Eliminating the guesswork from quotes and prices as well as showing the buyer’s real-time information shows them the value of your sales team, your product and by extension, your company.
Product Management and Engineering can use data supplied by CPQ to identify functional holes in existing solution offerings. If your product is designed for indoor use in ambient temperatures, would it not be of interest to product designers to know that 25% of your product discussions ended in disqualification because your product wouldn’t work outside in temperatures higher than 40 degrees? This information is readily available from CPQ.
CPQ is a great tool to effectively collect, store and use product information within the business. CPQ is the ears, eyes and discussion venue for establishing and fixing wants and needs while ultimately defining and quantifying demand.
When manufacturing is responsive to the customer, manufacturing is relevant.
For more information, visit: https://www.cincom.com/au/