CPQ or Configure Pricing Quoting is a sales enablement software that allows companies to generate accurate quotes for any product configuration. It automatically accounts for the various factors that may affect the final price of the product or service. In the process, CPQ software also enhances your company’s bottom line. But how does it achieve these goals? And what should you bear in mind while choosing a CPQ tool for your business? Read on to have all your questions answered.
What is CPQ and CPQ Software?
CPQ or Configure Pricing Quoting is a pricing and quoting strategy that involves:
- Configuring an array of products and/or services
- Pricing, which accounts for the production cost, competition pricing, any promos or discounts, or pricing approvals
- Quoting with the appropriate terms and conditions in the contract to close deals faster
A CPQ software is a sales tool that automates the process and aids companies to produce highly configurable and accurate quotes making the Configure Pricing Quoting cycle quicker and easier.
Interestingly, CPQ tools have been around for decades. The “Product Configurators” of the 1980s were highly customizable and could be easily integrated with ERPs. However, they were rather clunky and tough to operate. As a result, they remained in anonymity.
In recent times, CPQ software has started gaining traction as the technology surrounding it grows, streamlines, and matures. Additionally, the large-scale digitization and adoption of modern technology in sales could be another reason to trigger this new wave of demand for CPQ software.
Some recent trends surrounding CPQ tools are as follows:
- The market for CPQ software applications grew at an accelerated rate of 15.5% in 2019 and touched an estimated value of USD 1.42 billion. (Gartner)
- In 2020, the Year-over-Year (YoY) growth rate for CPQ tools is approximately 13.45%. (Technavio)
- The industry is expected to reach a valuation of USD 872.8 million with a CAGR of 19.23% for the forecast period 2018-2025. (MarketWatch)
- 71% of customers purchased CPQ tools to automate and replace their existing systems. (Gartner)
Does Your Business Need CPQ Software?
The research titled “State of Sales” (have not linked the study as it was published by the competition, Salesforce) indicates that sales representatives spend only 34% of their time actually making sales. The remaining 66% of their time goes into generating quotes, preparing proposals, and obtaining approvals. Clearly, that is not the picture of productivity that any organization would like to paint.
However, automation through CPQ tools can have the following effects:
- 10x faster quote generation
- 2x faster movement from quote to payment
- 30% quicker ramp for new sales representatives
- 95% reduction in approval times
The above figures make it abundantly clear that almost every organization will gain through the deployment of a CPQ tool. However, if you are still on the fence as to whether the software is right for you, here are a few signs that indicate that you must invest in CPQ:
- Your sales team constantly struggles under pressure to comprehend the product details, communicate prices, and close deals.
- You have a drawn-out approval process where the proposal takes days or weeks to reach fruition, which could turn away customers.
- Your sales team find it difficult to accurately match the complexities of the deal with the appropriate configuration.
- Analyzing and exploiting data becomes a hassle due to missing or outdated data within disparate software applications.
- The system admins face difficulty in scaling and maintaining the quoting system.
- You operate within a large organization that has a complex product line offering a wide variety.
- Your sales reps still rely on manual quote creation, which is also error-prone and inefficient, resulting in costly mistakes.
- The value-added resellers (VARs) and partner vendors feel left out from the sales deals.
- You have a rapidly growing company with an equally expansive product line.
- You run a customer-driven organization that must respond to customer demands with accurate information to smoothen the selling process and experience.
If you relate to any of the above situations, you must seriously consider investing in CPQ software.
What to Look For in a Modern CPQ?
Now that you may be leaning towards a CPQ automation to propel your business’ growth, here are a few considerations to bear in mind while choosing a CPQ tool:
Is it Compatible With Other Software Applications?
If you use tools like CRM or ERP, you would want your CPQ to integrate seamlessly with these technologies. A CPQ tool that is compatible with your legacy software will leverage existing data while preventing silo or duplication. As a result, your business can enjoy a free-flowing, fully-connected experience.
Do You Have a Smart Platform?
Companies are tapping into the benefits offered by cutting-edge technologies like Big Data, Artificial Intelligence, Machine Learning, etc. Given that these are heavily in rage and most businesses have already adopted them, it would be wise to invest in CPQ that integrates with such data mines. CPQ tools can feed on data and make use of historical and latest market trends for smarter Configure Pricing Quoting.
How Much Do You Value Speed and Affordability?
It is no secret that CPQ tools can be quite a hefty investment. However, it is also known that it grants a handsome ROI. It ensures transparency and due diligence as it will involve all stakeholders, be it VARs, partners, or vendors. If you want the sales process to be quick and affordable, investing in a CPQ tool is a small price to pay.
Do You Have a Mobile Sales Team?
If you have a highly mobile sales team, you would want a CPQ solution that matches their pace. Imagine a scenario where the sales rep can instantly create a quote right in front of the customer and take the deal forward. Apart from making your sales team’s work quicker, the CPQ software will also make the buying experience painless.
Why Choose VARStreet’s CPQ Software?
If you are looking for a modern CPQ tool that can meet all the above requirements, then VARStreet can check most boxes for you. If you choose VARStreet’s CPQ, here’s what you can look forward to:
Plug and Play
With VARStreet, you do not have to get into the nitty-gritty of the technical back-end. The CPQ software comes with out-of-the-box features that you can leverage almost instantly. Plus, it offers absolute flexibility for branding and customization.
CPQ Made Easy
Use quote templates to create multiple quotes and proposals easily, quickly, and in no time. VARStreet CPQ’s rule-based calculations to account for all factors to simplify even the most complex quoting requirements. Similarly, you can also use the one-click custom bundle creation
Rich Suite of Features and Functionalities
Some of the amazing features available in VARStreet CPQ are:
- Real-time pricing, catalog, and inventory management
- Upselling and cross-selling suggestions
- Bulk import of spreadsheets
- Quoting and pricing history and analytics
- Customization of approval workflow
- Mobile quoting application
- Seamless integration with payment gateways, ERP, CRM, PSA, and accounting software
At a time when cloud-based applications are heavily in rage, VARStreet offers a highly scalable and flexible cloud-based CPQ, which could serve a gamut of businesses of all shapes and sizes. Plus, the platform is absolutely user-friendly with no technical knowledge necessary
VARStreet allows you to tap into its network of over 45+ IT resellers and office supply resellers to help your business grow.
VARStreet offers the best-in-class post-sale service. The CPQ software is equipped with a rich library of content available for free, which can help navigate through the various process. Additionally, you also get access to 24×7 customer support over multiple channels.
VARStreet’s CPQ packs a powerful punch that can meet all your Configure Pricing Quoting needs.
Benefits granted by VARStreet CPQ
VARStreet’s CPQ software offers the following advantages to Value Added Resellers:
1. Reduced Sales Cycles
Thanks to features like streamlined product configuration, automated quoting, and quick approvals, your company can enjoy shorter sales cycles. With VARStreet’s CPQ software, the average sales cycle drops from 4.68 months to 3.42 months, which is a reduction of a whopping 33%!
2. Higher Quoting Productivity
According to an Aberdeen survey titled, Breaking the Law of Physics: Shortening the Last Sales Mile through Workflow Automation, CPQ users send out 49% more quotes, proposals, contracts, and RFP responses.
VARStreet’s CPQ software takes it up one notch as it offers accurate configuring and quoting in real-time, thereby improving the quoting productivity. As a result, your sales team can generate and send out a higher number of quotes and exceed their quotas.
3. Error-free Configurations
Even the slightest of errors in manual quoting could result in dear losses. Unfortunately, nearly 33% of sales representatives encounter some form of error in the sales agreement. Issues like incorrect dates, missing signatures, and wrong names can lengthen the sales cycle.
Fortunately, CPQ eliminates such human and clerical errors. Regardless of the product line size, VARStreet’s CPQ tool can reduce quote revisions by 13%.
4. Improved Sales Team Performance
Adding a layer of automation frees up your sales rep, who can then focus on selling rather than calculating or preparing quotes. They are no longer caught up in carrying out administrative or data entry tasks.
At the same time, CPQ offers guided Configure Pricing Quoting, which takes off some computational load, adds to their productivity, and boosts the overall team morale. As a result, companies that use CPQ software register 17% higher lead conversion rates.
5. Larger Deal Sizes
Organizations that use CPQ enjoy deal sizes that are 105% larger than the average deal size. CPQ software can break down any deal to a granular level across dimensions like pricing, solution, terms and conditions, supply chain, and renewal. Thus, you will be hitting the bull’s eye with every quote, which will eventually increase the sales volume.
6. Upselling and Cross-Selling Capabilities
Upselling and cross-selling are two contributing factors to increased deal sizes. VARStreet CPQ can effortlessly integrate with other AI or ML-powered technologies that offer personalized recommendations. As a result, your company will record higher sales and margins.
7. Access to Bundles
VARStreet CPQ software can bundle an array of SKUs, which also includes configuration SKUs. Resultantly, the sales team can prepare complex products, kits, or assemblies with multiple parts that can add value to the offering.
8. Greater Transparency
As the VARStreet CPQ involves all the stakeholders, the customers, vendors, partners, office supply VARs – everyone can be on the same page. Companies can link triggers to customers or integrate the CPQ with the CRM to identify the low-hanging fruits and capitalize on the opportunities.
9. Streamlined Approvals
With VARStreet CPQ, you get unlimited flexibility to customize the approval workflows. Furthermore, you can set rule-based conditions that can redirect the channels. Even the customers can customize the approval workflows at their end, making it easier for them to do business with you. With accelerated quote to cash processes, you can offer a hassle-free buying experience to your clients.
10. Air-Tight Integrations
Irrespective of the software applications that you use, VARStreet CPQ will integrate with all the software seamlessly. Importing and exporting data from the CPQ tool is fairly easy. Therefore, the sales team can enjoy uniformity across the apps without experiencing any data siloing or duplication issues.
11. Powerful Data Analytics
Simply accessing real-time data is not enough. In order for companies to leverage this data, sales teams need to analyze and interpret what it means. VARStreet CPQ comes with a powerful reporting and analytics suite that can offer an overview of the margins, item history, pricing, quote history, etc.
How to Use VARStreet CPQ?
CPQ can benefit everybody, from sellers and value-added resellers to B2B companies and end-users. It can single-handedly upend your company’s traditional quoting techniques or tools. As we continue to move towards a unified and tech-centric digital environment, CPQ may soon emerge as the go-to solution to overcome all kinds of sales handicap.
It is only a matter of time until we witness the CPQ boom!