CPQ software is one of the most influential tools within the B2B industry as it streamlines and simplifies the ways deals are formulated and closed. Due to the growing use of CPQ software within the space, and in order to scale up your B2B sales, it is of great importance to understand what CPQ software is and how it operates.
What Is CPQ
Configure Price Quote software simplifies and automates the quoting process. Beyond this it also: controls product and service options, feature combinations, discounts, commission, centralizes pricing information, and streamlines data.
What Is The Difference Between CPQ And CRM
CPQ and CRM are two separate, yet integratable, softwares. Centering the management of customer relationships, CRM collects data from a variety of mediums such as websites, chat rooms, and social media. The software is used by both marketing and sales teams to target prospective customers.
CRM is of immeasurable use to sales and marketing teams. The software stores data regarding customer preferences, resulting in the personalization of each interaction. Each phone call which takes place is tracked, alongside emails and meetings. The software can also be used to schedule follow up conversations. Through the comprehension CRM ensures regarding customers and purchase trends, cross-selling and up-selling become easier tasks.
Sales tracking and forecasting: the provision of forecasting reports provides sales teams with better visibility over pipelines. Secondly, the tool helps to generate leads more accurately, and allows sales teams to monitor their proximity to targets. Next, Sales team managers use such reports to oversee their team and its productivity.
Contact management: stores the most recent information about customers varying from their contact details to service conversations. The contact management tool is simple to access and update.
Dashboard based analytics: these analytics accumulate and present information in cohesive dashboard displays which are customizable depending on the priorities of the individual.
Lead management: CRMs automation of lead management enables users to track pipeline activities, tasks, and targets. This commences from the point of mere prospect to actual conversation.
CPQ software offers a product and pricing rules feature. An example of a product rule is the validation tool which prevents users from downloading incompatible quote configurations. The alert tool then notifies users of important information and updates. There is also the availability of a selection tool which selects, deselects, shows, and hides products in relation to specified variables. An additional, and efficient, feature is the Dynamic search filter which is applicable to product catalogs.
Advantages Of CPQ Software
Adopting the correct software which adheres to the needs of your business is of great significance. CPQ software offers a multitude of advantages. Three of its most widely recognised benefits are faster quote generation, the reduction in quote approval time, and the reduction in the length of the sales cycle. Extending beyond this is the opportunity to cross-sell and up-sell during the configuration cycle. This occurs through highlighting another product which may be of interest to the buyer in question. This second item is then often sold in a cheaper bundle, simultaneously increasing the average deal size of a company.
Alongside this, CPQ ensures more efficient introductions to new products, alongside more efficient configurations and price changes. All changes made to pricing are automatically updated by the software so that the sales team have the most up-to-date price list and product catalog. Moreover, CPQ can store a history of the changes, thus making them possible to revert if necessary. The software also keeps track of a business’s current product stock, demonstrating different prices and currencies in accordance to the buyer’s location. This occurs whilst applying discounts to certain quantities and specific customers. Finally, the utilization of CPQ reduces potential risks posing threats to the running of a business. Expanding upon this, the risk of quoting wrong prices, products or incompatible product configuration is diminished. Such threats not only waste time and resources but also increase the likelihood of a customer opting for a business’s competition due to any mistakes made during the sales process.
Disadvantages Of CPQ Software
CPQ does not allow items to be configured in batches. In other words, one may have ten configurations of one item, but would have to configure each individually. Furthermore the price of CPQ often does not include its data warehouse or analytical tools, which have to be bought separately. Beyond this, some softwares have long deployment times, thus delaying the improvement of a business.
Other disadvantages of CPQ software center on the
following two factors. Failure to integrate CPQ with other essential softwares akin to CRM causes the risk of incomplete or outdated data being used. This in turn impacts the accuracy of contracts and means that inaccurate data will be relayed to stakeholders. Finally, it is of vital importance to invest in training before implementing the software to avoid inaccurate use.
To conclude, CPQ software scales B2B sales through the management it exerts over the sales process. The software takes control over tasks such as pricing, quoting, data, and commission. In doing so, businesses are consequently up-scaled as automated software is better equipped to cater to a larger clientele. Despite its disadvantages such as the inability to configure in batches, CPQ ultimately streamlines administrative tasks. The impact of this is that the lengths of sales and configuration cycles are significantly diminished.