CPQ sales are your route to 38% faster sales cycles and a 168% increase in revenue. This is the average improvement achieved by the companies that invest in CPQ. With this article, you’ll become ready to decide if CPQ sales are actually correct for your business and whether now is the right time.
We’ll be answering the following questions:
What are CPQ sales, and what does it really mean?
What do all the CPQ vendors have in common?
How customers and sales reps benefit from the CPQ sales?
CPQ Sales
CPQ is software that configures, prices, and quotes complex and customizable products. It automates the many complex sales tasks, boosts sales cycles, and also reduces errors. The scope of advanced CPQ solutions goes beyond sales to even engineering and production. The result: better sales, more quickly.
In short, CPQ streamlines the sales and manufacturing efficiency by:
Rendering the configuration of complex products quick, painless, and even error-free.
Calculating the dynamic prices in real-time.
Generating sales and technical documents automatically.
#1: CPQ Configuration – configuration of complex products easily
The demand for customized, engineer-to-order products has seen a big boost in recent times. Research by McKinsey suggests that “personalization leaders” achieve a 5 to 15 percent increase in their revenue. Still, only 15 percent of CMOs think that their company is on the right track through personalization. This disparity brings with it a huge opportunity.
B2Bs have been pretty slow to offer customizable products, thanks to perceived complexity in both sales and manufacturing. When there are 100+ (and often 1,000+) product options to choose from, the sales reps make a lot of mistakes, frequently selling the products that won’t work in the real world. This then leads to a lot of painful back and forths among customers, sales, and engineering, causing delays as well as poor retention.
With the right CPQ software, rather than the manual configuration of products, sales reps make the use of a “product configurator” – a cloud-based tool that makes it very quick and easy to cut down the vast product catalogs to efficient customer-specific selections. By answering the questions, filtering options, or even interacting with a visual interface, sales reps can configure the most amazing products every time.
Product configurator work due to “product rules” – short chunks of code within the configurator’s back-end to determine how the products and bundles should be assembled. With a CPQ like KBMax, product rules are created by non-technical users from within the CPQ admin or even by using a no-code programming language called SNAP (similar to Google’s Blockly.)
#2: CPQ Pricing – dynamic prices in real-time
Sales reps are great at selling. But they’re not very good at math. Formatting and number-crunching for a long time in Excel spreadsheets lead to delays, errors, and frustration.
CPQ solves the pricing issues with in-built “pricing rules” that calculate the prices for tough configurations. Best of all, CPQ calculates the prices in real-time: Prices get updated instantly as reps as well as end-customers get to experiment with multiple configuration options, making it very easy to increase the overall satisfaction while also operating within the budgetary constraints.
With CPQ, the sales reps are not forced to use their prices calculated by the CPQ. Instead, they’re guided. They can also override the prices freely. Meanwhile, the custom workflows and approval loops keep it all transparent. Approval requests are usually sent out automatically and then can be signed off with just a single click.
#3: CPQ Quoting – generate a quote to send out to the customer
Generating manual quotes in programs like Excel is very slow and error-prone. One incorrect cell format can mean disaster. Also, there’s the issue of version control – you cannot be quite sure who, how, and exactly when a spreadsheet is modified or whether you are even using the updated template.
With the help of CPQ, quotes get automatically generated and sent to customers without downloading, saving, and uploading on email. Other related sales documents can be auto-generated too, like proposals, terms and conditions, and the marketing collateral.
Advanced CPQ solutions like KBMax go beyond the usual quote generation, creating technical documents, CAD files, and cut sheets too – all without any kind of engineering input. Engineering bottlenecks get cleared, leaving engineers to focus on their R&D than the never-ending busy work.
Best CPQ Vendors Providing “Visual Product Configuration”
CPQ vendors like Salesforce give a text-heavy CPQ solution. Sales reps that configure products guide their customers through a drawn-out series of questions and an Amazon-like filtering system that picks out the right products or… eventually. It’s pretty okay, but not as quick as it could be.
A good CPQ solution like KBMax enables sales reps to configure their products “visually.” Rather than answering questions, they simply click, drag, and drop to create the products within a 3D visual interface. Customers too get involved in the process, making for a very engaging experience.
Visual product configuration delivers several significant benefits over the text-only alternatives:
It’s quicker – dragging and dropping is faster than answering countless questions, and images are processed 60,000 times faster than text.
It’s not a black box – sales reps and end-customers receive better understanding of products, options, and how they are exactly assembled. This clarity then leads to fewer miscommunications.
It cuts down the purchase anxiety – seeing a 3D visualization of a product before the final purchase boosts the buyer confidence.
It’s an amazing differentiator – giving a very immersive buying experience is very compelling and also an amazing way to stand out from the competition.
It organizes the downstream processes – sales reps acheive more without any input from engineering.
CPQ Companies Allow Customers the Selef-Serve
CPQ sales change the game for the time-stretched, overwhelmed sales reps, as we have witnessed. But the best CPQ solutions are not just limited to be used by reps – they can also be used by the end-customers!
Companies using KBMax get to embed their 3D product configurator within their external B2B eCommerce website, opening up powerful and compelling configure, price, quote functionality out there in the world.
Existing customers and some new ones too can easily self-serve from anywhere, any time, and also through any device. They now play around with countless product options at their own pace without the need of a sales rep peering over them. A process that took 20+ calls and emails are now completed without any sort of human interaction. In a post-COVID world, where the in-person meetings are now a thing of the past, CPQ sales offer the perfect solution.