What are CPQ systems?

If you are looking for the right solution for your own business and want to digitally map the products you offer, you will quickly turn to CPQ software. This is an essential option for companies that provide customized, multi-variant items. Thanks to this innovative sales solution, quotations can be created automatically. Every customer receives their desired product much faster than before. Errors occur less frequently. Products are described precisely thanks to the clear set of rules.

The abbreviation CPQ stands for 3 terms (Configure, Price, Quote) and describes the most important steps in the sales process chain. They can be run through using CPQ software. The software enables the configuration of complex articles. They are priced immediately. The corresponding quotations are then sent out. This is a significant advantage for retailers who are looking for new ways to implement products quickly and accurately.

Dhis tool has a positive impact on business. As the quotation creation process is accelerated, customer trust and satisfaction increases. They visit the webshop again and again, which leads to an increase in sales, and in this article we explain the importance of CPQ for companies and customers in more detail. You will learn more about the areas of application and possibilities of CPQ systems, their advantages and disadvantages.

Advantages of CPQ systems

Since quote creation is quite a laborious process and takes a lot of time, CPQ software is truly a lifesaver for online retailers. Creating quotes for complex products with numerous customization options requires more time. It is more difficult to configure the existing products. That's why it pays to use CPQ systems, which allow sales to respond to individual customer requests. In this way, everyone receives an offer tailored to their wishes. CPQ has a positive effect on both customers and companies. Let's look at the advantages of this software from both perspectives.

For companies

• Increased efficiency: The processes involved in preparing quotations are automated through the use of CPQ systems. This makes it possible to reduce the time required for configuration and ordering. The training time for sales staff is reduced. Work in the company becomes more effective and customer loyalty is improved.
• Error reduction: Errors occur more frequently when filling in manually. As this software is well aware of certain rules and dependencies, errors can be avoided when configuring and creating quotes. When Configure Price Quote systems are used, the latest information about products is used. This avoids unwanted conflict situations and returns.
• Margin improvement: Companies' pricing models are intelligently designed. Dynamic price adjustments are made on the basis of current market conditions, volumes and combinations. In this way, company profits can be increased.
• Scalability: The easy integration of products and services into the CPQ system offers companies flexibility and agility. As the portfolio is expanded with new articles and the customer spectrum is extended, the company can scale easily.

For customers

• Short response times: As quotes are prepared immediately and inquiries are processed quickly, waiting times are significantly reduced. Customers benefit from this and ultimately remain satisfied. This increases the chances of a successful sale.
• Transparent pricing and options: Thanks to CPQ systems, prices and multiple options on offer are clearly displayed. When changing selection criteria, customers can immediately see how prices are affected. Then the feeling of reliability appears.
• Self-Service-Option: Mit Hilfe von leistungsfähigen Configure Price Quote Systemen kann man Produkte und Dienstleistungen selbstständig individualisieren. Sie können sich mit den Artikeln auseinandersetzen, was zur Erhöhung der Kundenbindung führt.
• Stability and reliability: The CPQ software is used to create accurate quotations. Customers can therefore be sure that their requirements are taken into account. This contributes to a lasting customer relationship.

Disadvantages of CPQ systems

In the beginning, it is difficult to get to grips with the new tool. That's why employees try to distance themselves from it. If they are already familiar with the software, they will no longer do without it. On the whole, the CPQ software only has a positive effect. However, some difficulties can arise at work:

• Depending on the product portfolio, the introduction of the CPQ system may require more effort. Once you understand how to use it, everything becomes clear. The support of an experienced expert, e.g. a full-service e-commerce agency during the CPQ project is always recommended.
• The data used by CPQ solution should be up-to-date, verifiable and accurate. If they are not, prices will be too high or delivery times will be inaccurate when quotes are generated.
• When switching from manually filling out templates or working in the spreadsheet system to the integrated CPQ system, the team may encounter obstacles. The transition can be overwhelming for them.
• Not all customers fully understand the meaning of CPQ. They do not use the software to its full potential. Sometimes the offer is not adapted with additional products and new services because the team has not taken current information into account.
• Human error creeps into the CPQ process. Sometimes delivery or shipping costs cannot be included.
• Customers lose the opportunity to clarify details of the quotation process with the seller. There is no longer any active communication.

Areas of application for Configure Price Quote systems

Nowadays, CPQ software is an indispensable tool that ensures companies work efficiently. It can be used in different areas. CPQ is particularly necessary for suppliers of complex, configurable products that are combined from various individual components. These include medical technology, mechanical engineering, telecommunications, construction products, software development and much more. When it comes to items or services with specific customer requirements, the CPQ solution is a real helper.CPQ software is used in the B2B and B2C sectors to support sales and satisfy customer needs in terms of specific options and prices. When CPQ is used in the insurance industry, the offer is created taking into account individual risks and wishes. It is important for online retailers to be able to configure the desired items according to the selected criteria and calculate the prices immediately, and the large demand for customized products increases the number of variants. To manage this, articles are modularized, which leads to a reduction in internal diversity. By using CPQ systems, the standardized assemblies are combined with customer-specific product variants. This is the basis for CPQ.

Using CPQ: When is the software necessary?

This is a helpful solution for companies involved in the production of items with many customization options. The CPQ software facilitates many processes and has a very positive influence on sales. Do not delay implementation if the following difficulties arise in your company:

• They sell highly complex, configurable products with numerous variations and dependencies. Then the CPQ system simplifies and automates the customization process and pricing.
• There are a large number of inquiries. The sales staff cannot prepare qualified offers on time. This is embarrassing because the competition is always growing. By using CPQ, both time and effort can be reduced.
• Distribution takes place via various channels (e-commerce, direct sales, resellers). The CPQ solutions ensure the consistency of offers and prices for each channel in order to reduce the risk of margin erosion.
• This involves complex pricing strategies (tiered pricing and price packages, volume discounts) and an extensive product portfolio. Sales employees find it difficult to create precise offers.
• There are always mistakes. The solutions offered cannot be realized or discounts are too high.
• Product innovations must be actively included in sales. The customer does not receive any additional offers (accessories, spare parts).
• In order to create a reliable offer, you need a lot of time for internal consultations with certain specialist departments. With the CPQ solution, everything is coordinated automatically.
• It takes a lot of time to train new sales staff and experienced colleagues leave the company. CPQ is already well acquainted with the product range and reduces both time and resources.
• The individually configured products cannot be displayed visually.

If you encounter the problems mentioned above, then it is high time to introduce a CPQ system. You will soon notice the improvements - optimization of sales, high work efficiency, reduction of errors, customer satisfaction and increase in sales.