For complex configurable products, CPQ calculates billions of possible combinations. It provides salespeople and customers with accurate, personalized quotes.
Without CPQ, businesses would have to limit the number of choices or restrict their product offerings. CPQ software opens the door to more customization and choice, loosening constraints that might otherwise prevent profitable growth.
Product Configuration
If your product lines are complex and configurable, CPQ software automates your sales configuration process. It can help you configure and price quotes faster while reducing errors, enabling your sales team to respond to customer requests faster than your competitors and giving customers a better buying experience.
Salespeople need time to connect with their customers and focus on the business of selling. But they often need help with administrative tasks, like configuring and pricing products. Using a CPQ solution to streamline these processes gives your reps the time to focus on selling.
CPQ configurator can generate a complete quote with all the details for a potential customer, including the product description, parts and accessories list, pricing information, discount rules, and more. In addition, the CPQ configurator can be integrated with procurement systems to ensure that orders are processed smoothly from the point of sale to delivery.
Many CPQ solutions, such as Tacton, can create 2D and 3D drawings and CAD files for each configured product, providing your sales teams with the tools to sell additional accessories and upsell opportunities. This enables your sales teams to take full advantage of the value of each customer configuration, and it can also help you reduce ordering mistakes that lead to project delays and margin erosion.
Pricing
For businesses that sell complex configurable products – like airplanes, computers, and industrial machinery – a good CPQ solution needs to compute billions of possible product combinations. It also needs to have pricing capabilities that are sophisticated and automated so that salespeople don’t spend their whole day filling out spreadsheets.
A CPQ system can automatically determine the cost of each configuration and compare that to the company’s pricing rules to ensure it’s profitable. It can also help salespeople find ways to upsell and cross-sell to get the most value out of their customer’s purchases.
Finally, a good CPQ solution should connect with the other systems involved in a business’ sales processes. This is important for companies with multiple divisions and subsidiaries because it ensures consistency and accuracy across all teams. It can also help to eliminate redundancies and synchronize processes, making it easier for different departments to collaborate.
Sales Quotes
CPQ configurator software allows businesses to determine pricing for each product. For example, suppose your company offers volume-based discounts on team sportswear. In that case, your CPQ tool can automatically calculate the correct discount for the quantity ordered by the customer, reducing the amount of manual work that needs to be done by sales reps to create quotes.
Businesses can also implement dynamic pricing models (e.g., cost-based pricing, value-based pricing, etc.), approval workflows, discount structures, and variable price books to maximize revenue.
Using a CPQ configurator also eliminates the need for human intervention when creating quotes and proposals. This reduces the risk of errors and allows salespeople to work in parallel with each other on quoting projects.
Additionally, the CPQ configurator will enable teams to track and manage quoting processes, which helps to control margin erosion and rogue discounting. As the world becomes more personalized, buyers are willing to pay a premium for customized products and services. By leveraging a CPQ configurator to provide personalized products, businesses can increase sales and improve the customer experience.
Moreover, a CPQ configurator reduces the length of the sales cycle by making it easier to generate accurate quotes and speed up the quoting process. This is especially important for businesses that sell subscription and recurring revenue models.
Order Management
While salespeople often focus on the process’s quoting, pricing, and ordering stages, it’s important to remember that quotes go through plenty of other phases before they are complete. They must be sent to customers, matched with an invoice, recognized by the business as revenue, and fulfilled. CPQ software is designed to facilitate this flow through configurable workflows, which can be configured to meet the needs of each department involved.
A well-designed CPQ solution will also allow for the management of pricing rules and the automation of price determinations. This can be done based on BOM characteristics, production costs, optional features, or a combination of these factors.
A CPQ system’s ability to automate price determination allows for faster processing of orders and the elimination of manual calculation errors. Finally, a CPQ solution with a robust product catalog can allow for the upselling of accessories and other value-added products. These can be mounted onto the main equipment, or they can be sold separately.
In either case, an effective catalog tool makes it easy for salespeople to present these options to their customers. This is especially useful for high-value, complicated, or configurable products in markets such as telecommunications, utilities, tech media, and financial services.
