CPQ Software: Our Guide to Configure, Price, and Quote

In sales, the CPQ (Configure, Price, Quote) process is the key to converting leads into customers.

However, it can be tedious and time-consuming to go through every stage without the assistance of purpose-built software to automate workflows and speed things up. CPQ software is one tool that promises to propel you along the process by providing accurate quotes to your prospects.

In this guide, we will explore what you can expect from CPQ solutions, how much value they bring, and how they differ from ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) tools.

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What is CPQ software?

CPQ software is a tool used by many sales teams to create order quotes efficiently. It’s a time-saving trick that can ease the workload of salespeople by automating a key part of their sales process.

The CPQ process is one every sales rep will have to go through to suggest the best quote for each prospect. Here’s what that process looks like, and where CPQ software comes in:

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1. Configure for the customer

The first step of the CPQ process is to ascertain the customer’s specific needs. If you can hone in on the product or service that accommodates to their preferences, your chances of securing a deal will increase tenfold. There’s a reason why ‘you-focused’ marketing works: it puts you on a pedestal and makes you feel as if your specific problems have been heard and addressed.

If your job is to convince the customer they need your product, then why not find the specific model or style or customization option that works for them?

This is where CPQ software comes in handy.

With the right CPQ tool, you can feed all relevant customer information into the interface and it will generate the perfect offer for your customer. Factoring in all of the customer’s preferences and matching those with the details and features of your products, the CPQ tool will help you present the best option according to their needs.

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2. Provide accurate customer-specific pricing

Now that the offer is created, pricing comes next.

CPQ software here is very valuable as it allows you to take your offer and adapt it to your company’s pricing strategy. Whether your pricing model is based on a subscription or on usage, whether your customer is eligible for a specific promotion offer, or whether the negotiation context requires unique terms, the CPQ tool will help you calculate the optimal price point, in accordance with your company’s pricing guidelines.

This is helpful for selling at scale as well. If you want to sell to a large group, the CPQ tool will adjust the quote according to the pricing model you’ve settled on, saving you a lot of hard work.

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3. Send the quote

The final step of the CPQ process is of course sending the quote you’ve generated to the customer. CPQ software even makes this process more straightforward by quickly shooting off the quote to anyone and everyone who needs to see it.

CPQ tools are incredibly time-efficient, automatically generating quotes and allowing you to send them off en masse. You just need to step in when there’s authorization or signatures required.

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CPQs, ERPs, and CRMs

If you work in sales, it’s possible you will already be familiar with the acronyms ERP and CRM, and how they relate to CPQ software. In case you aren’t, though, we’ve put together a brief comparison of the main differences.

CPQ:

• Establishes customized pricing for customers;
• Generates and sends accurate quotes; and
• Creates detailed reports.

ERP:

• Collects and connects information from different departments;
• Integrates processes; and
• Automates workflows.

CRM:

• Manages relationships with customers;
• Facilitates efficient customer service; and
• Stores customer data.

As you can see, there’s definitely some overlap between the three types of software, but each has a different focus.

CPQ software is all about generating quotes to send to customers, ERP software is about integrating processes and streamlining company-wide organization, and CRM software focuses on the business’ relationship with its customer base.

So how can you use the three types of software together for better results?

CRMs and CPQs naturally compliment one another, as the former nurtures the relationship with the prospect so that the latter can seal the deal and secure the sale.

This just leaves ERPs. When you combine CRMs and CPQs with ERPs, the end result is a comprehensive system for selling to customers.

Why?

Because the ERP will fill in the gaps letting the sales rep know exactly what products are in stock due to the inventory management system. The ERP will also inform future sales and pricing strategies as it integrates information and collates data from every department within the company.

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An overview of the main CPQ solutions

Now that you’re sold on the need for a CPQ solution to make sales, what are the main criteria to bear in mind as you look for the perfect tool?

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Integration with other software

If you’re investing in a CPQ solution, you’ll want to make sure it’s compatible with your current tool stack.

If you currently rely on a CRM, ERP, billing software or all three, then you’ll want to double check the CPQ you’re looking at can work with them.

When you have a CPQ that integrates with your billing software, invoicing customers after a sale is a breeze. When it integrates with your CRM, all your customer data will be at your fingertips as you go through the sales process. When it integrates with your ERP, you’ll be able to easily identify whether you have the right product in stock.

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Automation and customization

The right CPQ tool will automate the tedious and trivial processes that take up far too much of your precious time. It will also provide you with plenty of customization options so you can offer the customer the perfect quote for their current situation.

In addition to this, through automation you’ll effectively be able to cut out the risk of manual entry errors, which could save you a lot of time and money in the long run.

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Versatility

Finally, when looking for a CPQ tool, you want to make sure it can effectively handle your product catalog, as well as both the billing and invoicing processes.

Acting as an all-in-one software solution, the perfect CPQ will take you from quote to sale seamlessly, even providing you with invoicing options and detailed reports after you’ve sealed the deal.

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The main CPQ solutions

We’ll leave you with a list of seven of the best CPQ solutions, which all offer excellent value for money if you’re in the market for a new CPQ tool:

• HubSpot Sales Hub;
• PandaDoc;
• DealHub;
• Proposify;
• Salesforce CPQ;
• Conga CPQ; and
• Zuora CPQ.

Not sure which tool to choose? We're here to help.