Mastering CPQ: The Definitive Guide to Configure, Price, Quote

When the stakes are high in industries like manufacturing, distribution, and B2B services, speed and accuracy in product configuration, pricing, and quoting aren’t just important—they’re game-changers. This is where CPQ software becomes indispensable. Configure Price Quote (CPQ) software streamlines the creation of customer quotes, making the process more efficient and effective.

CPQ software taps into critical customer information to enhance the sales process. It can determine the ideal product configurations for individual customers, calculate optimal pricing, and generate accurate quotes. It enhances speed and efficiency in the sales pipeline with its ability to automate these otherwise time consuming manual tasks.

Breaking It Down: What is CPQ?

Configure

The “Configure” aspect of CPQ allows sales teams to assemble products or services according to customer specifications. For example, imagine you’re trying to buy a computer online, but instead of just picking one from a list, you want to customize it exactly to your needs. You might want a faster processor, more memory, or a specific type of graphics card. The “Configure” stage of CPQ is like a helpful guide that walks you through this customization process.

The software allows you to select and customize various options based on your preferences. To continue using our example, if you’re buying that computer, it will guide you in choosing the right processor, memory, and storage, making sure everything is compatible. It ensures that whatever combination you pick, it’s something the company can actually build and sell.

In a B2B context, this is extremely useful because products can be far more complicated than a computer. Think of industrial machines or custom services. CPQ software helps sales teams configure these complex products correctly, based on what the customer needs, and makes sure that all parts of the product work together seamlessly. In short, this stage is about taking a lot of options and boiling them down to a final, workable solution that meets the customer’s requirements. It simplifies the process, reduces errors, and makes sure the customer gets exactly what they want.

Price

Once the product is configured, CPQ software moves to the “Pricing” stage. Here, it automatically calculates the best price based on a set of predefined rules. These rules might include bulk discounts, customer-specific pricing agreements, market conditions, or seasonal promotions. The software even takes into consideration more complex variables such as foreign exchange rates, or subscription models (depending on the industry). The software ensures that the price is both competitive and fair, considering all the factors that might influence the cost.

In a business context, this is necessary to ensure that pricing is consistent and accurate across all sales. The software can handle complex pricing scenarios that would be very difficult to manage manually, like offering different prices for different customers or applying discounts based on the volume ordered.

Essentially, the “Price” stage of CPQ takes all the guesswork out of pricing and ensures that both the seller and the buyer are getting a deal that makes sense, quickly and efficiently. This enhances customer satisfaction, and ensures that the business has competitive pricing advantages that are optimized for profitability.

Quote

After you’ve configured the product exactly how you want it and determined the price, the next step is to put all that information into a formal offer—this is the quote. The CPQ software takes the customized product details and the calculated price and automatically generates a professional, detailed document that outlines everything. This quote will typically include a breakdown of the product configuration, the final price, any applicable discounts, and the terms of the sale. It’s like getting a finalized order summary that you can review before making a purchase.

This is advantageous in B2B and eCommerce settings because it ensures that quotes are consistent, accurate, and delivered quickly. Instead of manually creating quotes, which can take time and lead to mistakes, the CPQ system does it instantly. In addition, the quote is often generated in a format that’s easy to share with the customer, whether that’s via email or as a downloadable PDF.

In short, the “Quote” stage is about wrapping everything up in a neat package and presenting it to the customer in a way that’s clear, professional, and ready for approval. This not only speeds up the sales process but also enhances the customer’s experience by providing them with all the information they need to make a decision.

Importance of CPQ Software in B2B Settings

Streamlining Complex Sales

In industries like B2B manufacturing and distribution, where product offerings are often highly complex, CPQ software is indispensable. It simplifies the sales process by guiding sales representatives through intricate configuration and pricing steps, ensuring that even the most complicated orders are handled efficiently. This is particularly valuable in B2B settings where customized solutions are common, slashing costs, saving time, and speeding up the sales process. In eCommerce channels, where customers demand quick and accurate responses, CPQ helps businesses maintain a streamlined operation, even when dealing with complex product configurations.

Enhancing Pricing Strategies and Accuracy

Manual configuration and pricing processes in B2B are prone to errors, which can be costly. CPQ software mitigates these risks by automating the entire process, ensuring that every quote is accurate and all configurations are feasible. In B2B settings, where pricing can vary based on contracts and negotiations, CPQ’s ability to consider all crucial elements helps businesses develop competitive pricing strategies that are both repeatable and optimized for profitability. In businesses eCommerce channels, the accuracy and efficiency provided by CPQ are essential for maintaining customer trust and ensuring that prices are always market-aligned.

Accelerating the Sales Cycles

In sales, time is a critical factor. CPQ software significantly reduces the time required to generate quotes, enabling sales teams to respond to customer inquiries more quickly and close deals faster. Imagine having to manually research, calculate, and input every aspect of this process. Not only does this cost a business sales, money and time, it also means increased errors, burnout, and difficulty developing accurate competitive pricing strategies.

The reality is, customers can feel the difference when a business leverages CPQ software. In B2B, where relationships are built on trust and reliability, delivering quick, transparent, and accurate quotes fosters stronger customer relationships. In its eCommerce channels, where customers expect instant responses, CPQ enables businesses to meet those expectations by providing fast and precise proposals, directly impacting customer satisfaction and loyalty. CPQ’s ability to streamline the process from configuration to pricing and quoting ensures that customers receive the best possible experience, no matter the complexity of their needs.

CPQ Best Practices

To fully leverage the power of CPQ software, businesses should follow these best practices:

Define Clear Objectives

Before implementing CPQ, it’s crucial to identify what you hope to achieve. Whether it’s reducing quote turnaround time, improving pricing accuracy, or enhancing customer satisfaction, having clear goals will guide the implementation process.

Integrate with Existing Systems

CPQ software works best when integrated with your CRM and ERP systems. This integration ensures that data flows seamlessly between platforms, allowing for more accurate pricing and better customer insights.

Train Your Sales Team

A CPQ system is only as effective as the people using it. Comprehensive training is essential to ensure that your sales team understands how to use the system to its full potential.

Monitor and Optimize

Like any tool, CPQ software should be continuously monitored and optimized. Regularly review performance metrics to identify areas for improvement and ensure that the system is meeting your objectives.

Zilliant’s Pricing-Centric CPQ

Zilliant’s CPQ solution has evolved past traditional CPQ software by offering robust pricing capabilities specifically designed to address the unique challenges faced by manufacturers and distributors in optimizing prices for profitability. These solutions go beyond the basics, with key differentiators including self-service functionality that allows businesses to expand into new channels and enhance the customer experience, native SAP integration that extends the power of CPQ without the need for middleware, and 2D/3D visualization tools that empower buyers with interactive visualizations, reducing the reliance on complex product renderings. These features together make Zilliant CPQ a comprehensive and advanced choice for businesses looking to improve efficiency and profitability.

Tools to Streamline Your Sales Process & Enhance Customer Buying Experience

With Product & Solution Configuration in ZIlliant CPQ, you can build complex profiles that account for dependencies, conditions, and pricing, ensuring that even the most intricate orders are configured accurately and efficiently. This capability is complemented by Self-Service Purchasing, which simplifies the buying process for your customers, enabling easy eCommerce orders, re-orders, and bulk purchases. Plus, it captures leads from abandoned carts, allowing your sales team to proactively follow up and close more deals.

Tools to Enhance Customer Engagement

Zilliant CPQ also enhances customer engagement through Interactive 2D/3D Visualizations, letting customers visualize their customized solutions directly within the platform. The Product Service Catalog further enriches the experience by providing advanced search capabilities, regional availability insights, and tools for managing related products like accessories and spare parts. To ensure your pricing strategy is both competitive and profitable, Discount Management features are built-in, allowing you to implement guardrails that speed up deal cycles and prevent margin leakage.

Tools for Revenue Growth & Optimized Competitive Pricing Strategies

Our CPQ solution’s Guided Selling tools help your sales team identify customer needs and pursue cross-sell and up-sell opportunities, ensuring that every interaction is maximized for revenue growth. With Approvals From Anywhere, you can expedite the approval process, even for complex, multi-step decisions, via email or other channels. Zilliant CPQ also ensures that your documentation is as flexible as your sales process, with Quote Output Documents that offer template pliability, multiple output formats, and adaptable business terms. Finally, Robust ERP & CRM Integrations with systems like SAP, Salesforce, and Microsoft ensure that your CPQ is seamlessly connected with your core business operations, making Zilliant CPQ an indispensable tool for businesses looking to optimize their sales and pricing strategies.

Closing Thoughts

Mastering CPQ is essential for any business looking to optimize its sales process, improve pricing strategies, and enhance customer satisfaction. As the market continues to evolve, the ability to quickly configure, price, and quote products is increasingly important. Investing in a robust CPQ system today will not only streamline your sales process but also position your business for long-term success.

Zilliant CPQ is purpose-built for manufacturing and distribution and simplifies even the most involved quoting process to shorten deal cycles and enhance the buying experience. To learn more and view a demo, head to the Zilliant CPQ page.