How to Choose the Right Solution for Your Business Needs
When a purchase is made online, there’s something that happens in the background every time you select another product, update the quantity, or any other type of customization customers can make. And that something is configuration.
To help customers create custom orders that match their exact needs, businesses invest in configure-price-quote software, or CPQ software for short. This allows customers to update the quantity, color, dimensions, accessories, and many other customizations they can apply to their order.
As you can imagine, this has enormous benefits for customers as it streamlines the ordering process, but it also helps sales teams reduce errors as the software can also automate pricing and quoting.
Thanks to its important role in online ordering, the CPQ market has experienced sustained, double-digit growth over the last five years, and Gartner estimates that the marketing will see a 20% annual growth rate through to 2020.
If you’re considering making the investment into CPQ software for your business, you’ve likely already discovered that it’s an overwhelming choice. There are a lot of options out there, and a lot rides on your decision as this software will transform your sales and ordering process.
To help you make the right decision for your business, check out our CPQ guide below, including CPQ vendor comparisons, benefits, reviews, and more.
Who Uses CPQ Tools?
Before you think that CPQ software is just for online retailers, think again. Businesses of all industries looking to streamline their ordering process and improve their customer experience are ideal fits for a product configurator. From designing custom operating rooms to customizing workout equipment, manufacturers and distributors of large customizable products can benefit from the simplicity it brings to their complex orders.
What Your Business Stands to Gain Using CPQ Tools
Why should you invest in a CPQ software solution? There are a wide range of benefits that you stand to gain.
Streamlines the Quoting Process
Each update that your customers make to their custom product or order requires a new quote or price. Without a CPQ, this means that your sales rep has to note the update and produce a new quote for the customer. Not only does this add time onto the sales cycle, but it also introduces the potential for human error.
The quoting component of CPQ software allows your sales team to respond more easily to customers, develop contracts at a faster rate, input orders more quickly, and improve collaboration and responsiveness. The end result is a streamlined quoting process, as well as improved sales efficiency and productivity.
CPQ Increases Quote Productivity by 33% - Aberdeen Group
CPQ Generates 49% More Quotes, Contracts, Proposals, and RFP Responses - Aberdeen Group
"With [CPQ Software], we're executing sales and service quotes more efficiently and accurately, and in position to go after new business faster without adding additional resources." Arkos Field Services
Reduces Order Errors
Remember that human error we mentioned? Well, CPQ software significantly reduces the chance for human error through automation.
As a solution that configures automatically, your sales team has more time to sell and enables a faster sales cycle with fewer errors and improved data accuracy. With more than one third of sales reps experiencing common errors with sales agreements, the fact that CPQ reduces quote revisions by 13% can have a big impact on minimizing those errors.
How is that accuracy achieved? Through a sophisticated rules engine, CPQ solutions like Powertrak don’t allow customers or partners to create or bundle invalid products. By only allowing valid bundles or customizations, sales reps don’t need to double check orders for errors or disappoint a customer with a cancelled order.
"The configurator is a great tool based on rules that allow our partners to configure valid products only, thus saving us a bunch of re-work when the quotes/configurations come in unbuildable." Imation
The difference between a quote and price may seem insignificant, but because quotes work off of price, pricing changes can quickly affect your incoming orders. To implement those pricing changes, sales managers typically have to spend significant time updating their SQL database to reflect accurate prices. This takes up a considerable chunk of time.
The pricing element of CPQ tools allow your sales team to implement pricing changes quickly, no matter where they’re located—and those changes are applied across the system. There’s no need to update pricing in multiple places. CPQ also gives management more visibility into how their reps are changing price, alerting them to errors and unqualified discounts.
"In our environment, [CPQ] has expanded our automated processes beyond the Microsoft CRM workflow. We have enabled automatic record creation and updates in a controlled and efficient way, allowing the sales force to embed CRM into their daily routine without being bogged down with data entry tasks." Hitachi Medical Systems America
Frees Up Sales Reps
There are a lot of reasons why your sales reps are pressed for time. To give you just a taste, here are a few statistics that show your sales team has a lot to juggle:
of employees access 4+ systems to do their jobs
of sales rep time is spent on administrative tasks
High-performing sales teams are 8X more likely to be heavy sales technology adopters
of contract processes are not automated
If you want to improve your sales performance, you need to move away from manual processes that impede the sales team and bog down the sales cycle. This is where CPQ tools can make a bid difference. In fact, CPQ can shorten sales cycles by one-third, reducing the average sales length from 4.68 months to 3.42 months. With a shorter sales cycle, your sales team can push more deals through the pipeline than ever before.
With deals moving faster, there’s an increased capacity for more sales. But more than a rising number of deals in a shorter period of time, a CPQ software can also automatically suggest add ons and upsells to clients, generating extra revenue for your organization.
If you’re looking for proof of this, companies with CPQ software have been known to experience:
Higher Lead Conversion Rate
Larger Than Average Deal Size
More Sales Reps Achieving Quota
"The combination of working with our sales team, visualizing the layout, and experiencing our products in real-time will speed the design-to-quote process, resulting in increased customer satisfaction, revenue and margin." Skytron
Increases Data Visibility and Accuracy
As previously mentioned, employees need to access an average of four systems to execute their duties. The last thing you want is to add another system or technology into the mix. However, CPQ software lets all of your departments (i.e. sales, marketing, support) live in one system.
In addition, CPQ lets you share key data items for each account, preventing duplicates and giving you confidence that information is current, accurate, and provides a complete picture for each customer.
"Powertrak CPQ not only gives us control to create kits and execute sales quotes more efficiently and accurately, but it allows us to apply multiple quotes, that may include multiple product kits, to any given opportunity in Microsoft Dynamics CRM and forecast one or more quotes for pipeline management." Shimadzu Scientific Instruments
Improves the User Experience
With technological innovation allowing for extreme improvements to modern digital experiences, more and more of today’s businesses are competing on their user experience. More so than product or price, the user experience is a leading way to differentiate your brand from your competitors.
CPQ software can have an incredible impact on the user experience, especially if your CPQ software has advanced visual product configuration, including 2D, 3D, and virtual reality. By allowing your customers to see what it is that they are building, you can reduce user frustration and improve customer satisfaction as they can better understand what it is they are purchasing. Solutions with virtual reality configuration also allow for a more interactive and immersive ordering process, further improving the user experience.
"With visual product configuration software, our partners and customers now have a complete solution to rapidly and accurately configure, quote, and order make-to-order racks without the need for extensive product knowledge." Middle Atlantic Products
Our CPQ Comparison Checklist
Our CPQ guide is intended to help you choose the right solution for your business. Use the CPQ comparison checklist below to compare vendors, filter out the ones that don’t fit your needs, and choose the right CPQ software.
Set Your CPQ Objectives
Before you embark on looking for a CPQ vendor, you first need to lay the groundwork for your search. You need to nail down your minimum and maximum budget, what you want to accomplish from the solution, and what results you expect to see within the first week, month, year, etc.
Check CPQ Reviews and Do Your Research
Check online CPQ reviews to surface trusted providers on sites like G2 Crowd or Capterra. When checking reviews, be on the lookout for reviews that mention your goals or sought-after features. This should give you a good impression of what their CPQ software is like and can accomplish.
After checking reviews, we also recommend searching for additional vendors through sources like Gartner’s magic quadrant or visual configuration reports. This will give you a better look at which CPQ vendors are leading the market, but also what their strengths are. When performing your research and reading CPQ reviews, don’t forget to write down the vendors that catch your eye as a possible choice.
Look for These Top CPQ Features
Depending on what you hope to accomplish with a CPQ software, whether it’s improving the customer experience or shortening the sales cycle, there are specific CPQ features that you need to be on the lookout for. We’ve ranked the top features you should search for down below in order of most importance to help you further narrow down your options and conduct a CPQ software comparison.
- Visual Product Configuration
- Advanced Rules Engine
- Cloud-Based CPQ Software
- Automated Quoting & Pricing Management
- Guided Selling
Perform a CPQ Software Comparison
When searching for a CPQ vendor day in and day out, it can be hard to remember who has which features — a critical component for a CPQ vendor comparison. Use our table below to see what you could be missing out on or gaining depending on which vendor you select.
|Advanced Rules Engine
|Quoting & Pricing Automation
Ask CPQ Vendors These Questions
The next step after narrowing down your options is to reach out to your top CPQ vendors. This is a crucial part of your discovery as it will give you a deeper look into how each CPQ systems works and how well it will integrate with your team.
During your product demonstrations or email communications with vendors, ask them the following questions to accurately vet their solutions:
- Am I able to customize your CPQ to fit my business or quoting model?
- Will my sales team be a fan of your CPQ solution? Why?
- Does your CPQ software offer analytics or reporting?
- What impact can I see from your software on day one?
- How will you support me if I purchase and implement your product?
Once you have the answers you need, your CPQ comparison should be complete, allowing you to make the best decision for your company.
See CPQ Tools In Action
CPQ is a leading technology for streamlining your sales process and ordering experience, leaving a direct impact on your bottom line. Follow the above CPQ guide to make sure that you’re finding the right vendor and solution for your business.