Why Evaluation for a CPQ Vendor Matters?
Configure-price-quote (CPQ) software vendors come in all shapes and sizes. So, how do you select the right CPQ vendor for your enterprise?
When evaluating a CPQ vendor, it’s crucial to consider CPQ software providers’ ability to handle complex pricing models, which can significantly impact the efficiency and accuracy of your quoting process.
Now you will spend considerable time evaluating a CPQ solution to make the best CPQ software selection. However, it’s just as important for you to spend some time reviewing the CPQ providers themselves and the folks who represent them.
The reason?
When selecting a reliable CPQ vendor for your enterprise, it’s important to consider whether the software provider is big enough to serve your needs and small enough to care about your business. Additionally, if your business relies on recurring billing, ensure the CPQ vendor offers robust subscription pricing capabilities to streamline renewal quotes and manage repeat orders effectively.
With that in mind, let’s explore eight key factors that you should be considering while selecting a CPQ vendor for your business to ensure you make the most informed decision.
8 Essential Factors for Evaluating the Right CPQ Vendor
To ensure long-term success, it’s crucial to evaluate a CPQ vendor across several key dimensions — from market presence and size to financial stability and alignment with your company’s growth strategy.
1- Understand the CPQ Market Footprint
Like most software vendors, CPQ software companies also see their markets in terms of geography, vertical space, and operating environment. Each of these is critical to how they design their solutions and how they align with their existing users and prospects.
If, for example, your enterprise offers products in Italy and France, you should look for a vendor that also sells into those markets. This will provide assurance that they understand the localization requirements for those specific markets. Among the top CPQ vendors, those that integrate CPQ with CRM systems can provide enhanced visibility into the sales pipeline, allowing for better tracking and management of deals.
The vertical element is, perhaps, more important. Government sales and selling into certain vertical markets, such as medical or automotive, all have unique requirements. A CPQ vendor that understands these requirements will undoubtedly understand what your challenges may be in that regard. Integrating CPQ with your existing systems, such as CRM and ERP, is essential for seamless data transfer and streamlined quoting processes.
The operating environment is a potential showstopper. If your operation is strictly tied to a single operating system, you may be limited in terms of which products will run successfully within your environment. The same is true for an on-premise versus cloud-based orientation. Both offer advantages, and both tend to be somewhat mutually exclusive in terms of product capability.
2- Evaluate the Size of Your CPQ Vendor
Yes, CPQ vendor size matters. You want to pick a vendor that takes your success seriously. A vendor that can manage complex product configurations will ensure that your sales team can generate accurate and detailed quotes efficiently. You also want to pick a vendor that can back its product and grow successfully—a key consideration in any CPQ vendor comparison.
When defining the best CPQ vendors for your enterprise, consider whether the software provider is big enough to serve you and small enough to care about your business. This balance ensures you’re not lost in the crowd, and your organization continues to scale.
Choosing from well-established CPQ software vendors that prioritize accurate quotes will help reduce errors and improve customer satisfaction, which is a critical factor for long-term success.
3- Review the CPQ Software Company History
Is the company well-established, or is it a new venture? New ventures are not necessarily bad, but you should consider your own ability to take on some risk when working with a start-up software company. Long-term history is one of the very good indicators to measuring a company’s success. Among established CPQ software companies, a company with a long as well as reliable history in the industry is more likely to have the experience needed to handle complex quotes and provide reliable solutions.
The developmental path of technology is less of a continuous, smooth line and more of a series of smooth lines that link technological revolutions. Mainframe to mini to desktop to mobile, and so forth. Surviving those periodic paroxysms is a great indicator of an innovative and durable culture and vision. Configure price quote vendors that have weathered these shifts to demonstrate their ability to innovate and adapt, making them more trustworthy for the long haul.
Choosing a CPQ solution from a vendor with a proven track record ensures that you are investing in a reliable and effective tool for your sales processes.
4- Assess the Strength of Your CPQ Vendor
Strength can be defined in many ways. Financial strength is obviously important, but there are other elements to measure a software provider’s strength.
The public-versus-private question is always worth exploring. Privately held companies offer advantages that are frequently overlooked, with the most obvious being the absence of the need to satisfy quarterly and annual stockholder revenue expectations.
Private ownership can also mean an extended future vision that may be lacking in the publicly held company. This may be reflected in the ratio of profit to R&D spending.
Product stability is another critical strength metric for buyers. In the software world, products must be maintained via updates that keep them current with environmental changes, security requirements, and other external factors. Reliable CPQ vendors deliver these updates regularly. Vendors that offer dynamic pricing capabilities can also help you stay competitive by adjusting prices based on real-time data.
CPQ systems and automated proposal-generation systems need to interface effectively with numerous back-office systems. Maintenance of that kind of complex connectivity across multiple platforms requires experience and expertise. Effective contract management is another strength to look for, as it ensures that your sales team can efficiently close deals and manage customer relationships.
Functional improvements should also be delivered consistently—sometimes as part of a maintenance release and sometimes as an add-on option for purchase. Regardless, these enhancements should be forthcoming regularly to ensure your solution remains competitive and efficient.
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5- Verify User References for Your CPQ Vendor
No one wants to be the first user of a tactically important or strategic product. At least if this is a choice, it should be made with open eyes and be a realistically assessed risk.
For most companies, this comes down to talking with actual users of the software. User companies that have some degree of commonality with your own are preferred. Talking to already existing clients can provide you with insights into the CPQ vendor’s ability to deliver accurate pricing, which is crucial for maintaining customer trust and satisfaction.
A vendor offering an easy-to-use CPQ will often have strong endorsements from users who benefited from simplified quoting processes.
References in the early-stage CPQ software selection cycle may take the form of user stories. Later on, you will want to speak one-on-one with a real customer. References can also highlight how well the vendor’s CPQ solution streamlines quoting processes, reducing the time and effort required to generate quotes.
Keep in mind that references that happen to relate an account of some issue or failure should not necessarily disqualify your vendor. When evaluating a CPQ solution, the important question is: How did the provider respond to the issue? Knowing how the provider responds to a critical issue is probably more instructive than hearing repetitive stories about how perfect everything is.
6- Examine the Strategic Direction of Your CPQ Vendor
Finally, you should ask your potential CPQ software provider to share with you its plans about the direction of growth of the company and the CPQ software product you are considering. Ensure that their vision aligns with your company’s plans for future growth so you can continue to rely on their CPQ solution as your business expands.
It’s helpful to see the vendor’s expectations for the next five to ten years. If the vendor’s anticipated path significantly deviates from a direction that aligns with your company’s, be careful about depending on the provider for an extended relationship.
Look for vendors that offer advanced CPQ tools to support your evolving sales processes and enhance overall efficiency while integrating seamlessly with your CRM and ERP software. Experienced configure price quote vendors are better equipped to anticipate industry changes and innovate accordingly.
These types of changes may take the form of mergers and acquisitions for a start-up or a shift away from a technological or market orientation that’s important to your company.
7- Understand Your CPQ Vendor’s Revenue and Pricing Models
When assessing the pricing of CPQ vendors, it is important to look at their revenue forecast and understand how it would affect your ongoing relationship. Vendors who have a solid financial future are more inclined to invest more in ongoing product improvement so that their CPQ solutions can keep up with your expanding company requirements.
Ask yourself: Is the vendor’s revenue model compatible with your company’s needs? A vendor who prioritizes genuine, organic growth will be more capable of offering future support and updates, improving your sales procedures along the way.
It is also significant to consider how their pricing models can fit within your financial framework. The ideal CPQ software companies should have flexible models to fit your budget while delivering functionality to enhance efficiency and eliminate errors.
Lastly, remember that although the CPQ software functionalities are crucial, the vendor’s pricing strategy and fiscal soundness are also a priority. A solid, future-forward vendor may provide you with a scalable and reliable system that evolves according to your company’s needs in the future.
8- Vendor Likeability and CRM Integration
Finally, don’t overlook vendors’ likeability, as it matters a lot. The relationship between CPQ software providers and customers is like a rollercoaster ride. IT usually encounters challenges and sometimes even crises. Therefore, having a vendor you trust and genuinely like can make navigating those moments much easier.
During difficult times, it is important that you feel comfortable with being direct, open, and honest with your configure price quote vendor. You should also expect the same transparency and responsiveness from their side. Choosing a vendor that integrates effectively with your CRM system and supports your sales reps in closing deals efficiently can lead to a more productive and successful partnership.
Choosing the right partner demands more than just instinct — it demands a structured approach. You can make a confident, future-proof choice by thoroughly evaluating a CPQ solution against this checklist, conducting a smart CPQ vendor comparison, and focusing only on the top CPQ software vendors.
CPQ Vendor Evaluation Checklist: Key Factors to Remember
Now that we’ve explored the essential factors for choosing the right CPQ vendor, here’s a simple checklist to guide your final decision. Use this as a quick reference to stay focused and select a vendor that can truly support your business goals.
Hiring the right CPQ vendor is all about securing your success for the future. Keep this checklist handy during your CPQ vendor comparison and pick from the top CPQ software vendors that match your evolving business needs.
6 Common Mistakes to Avoid When Choosing the Right CPQ Vendor
Going through the essential factors to evaluate CPQ vendors is just one part of the decision-making process. While evaluating features and compatibility is important, avoiding common pitfalls during the final selection phase is just as critical to ensuring long-term success. Here’s what to watch out for when choosing the right CPQ vendor for your business.
1- Shortlisting Vendors Based on Features Alone
It’s easy to get caught up in the shiny features of each CPQ solution, but this approach can be misleading. A CPQ solution with a long list of capabilities may look great on paper, but it may not necessarily align with your specific business processes or scalability needs. Focus on the fit rather than the features. Ensure that the easy-to-use CPQ solution can handle your product complexity, configuration, and sales workflow.
2- Overlooking Vendor Stability and Long-Term Innovation
Choosing a CPQ vendor isn’t just about securing a solution for today’s needs. You must also consider the vendor’s financial stability and capacity for innovation. A vendor with a proven track record and solid revenue stream is more likely to invest in continuous development and remain a reliable partner. Look for CPQ providers that have long-term roadmaps for enhancing their solutions and keeping pace with evolving technologies, ensuring they can meet your future business demands.
3- Ignoring Integration Needs and Future Growth
CPQ systems rarely work in isolation — they need to interact seamlessly with your CRM, ERP, and other back-office tools. Failing to prioritize integration capabilities can lead to siloed data and inefficiencies down the line. It’s also important to consider future growth. Consider those CPQ software companies that not only offer integrations today but can also adapt to future system changes and upgrades. Flexibility in integrations will save time, resources, and headaches in the long run.
4- Underestimating the Total Cost of Ownership
The initial cost of a CPQ solution is just the beginning. Often, companies focus only on licensing fees and overlook the full cost of implementation, training, customizations, and ongoing maintenance. It’s essential to assess the total cost of ownership (TCO), which includes these hidden costs. Take your time to calculate how much it will cost to get the system up and running, as well as the cost of future updates, integration, and support.
5- Failing to Evaluate Support and Service Responsiveness
You don’t want to wait days for a response when you encounter issues with the CPQ system. Assess the vendor’s support services early in the selection process. How quickly do they respond to inquiries? What is the level of their expertise? Can they provide timely and efficient support in case of a system failure or urgent issue? Don’t just rely on pre-sales promises — test their support team during the evaluation phase.
6- Not Involving Key Stakeholders from Sales and IT Early Enough
A CPQ solution is used by both technical and non-technical teams, so it’s essential to get feedback from all departments that will interact with the system. Sales reps will be the primary users, and IT will handle integration, customizations, and system maintenance. Engage your teams from the start to ensure the system meets everyone’s needs and can scale as your business grows.
Avoiding these common mistakes will set you up for a smoother selection process and ensure your CPQ vendor is an asset that drives sales efficiency and business growth for years to come.
The ROI of Choosing the Right CPQ Vendor
Understanding the true return on investment (ROI) of your CPQ vendor is essential for both immediate and long-term business success. Here’s how the right CPQ vendor can drastically improve your bottom line and align with your company’s growth trajectory.
The ROI of the right CPQ vendor extends far beyond initial software costs. By improving pricing accuracy, accelerating sales cycles, and enabling better decision-making, the right solution offers substantial long-term benefits, which can be quantified as:
- 80% Operational costs saved
- 100% Real-time Accuracy
- 96% Reduced time to quote
- 25% Increased Revenue
Final Thoughts
As businesses evolve, the need for agile, scalable, and accurate pricing solutions becomes increasingly critical. Choosing the right CPQ vendor isn’t just about selecting a tool — it’s about investing in the future of your sales process, improving efficiency, and driving profitability. With the right solution, you can unlock new levels of performance and customer satisfaction.
Cincom CPQ is designed to help you optimize your sales workflows, ensuring real-time accuracy and faster quotes, all while driving revenue growth. Invest in the right CPQ solution today, and position your business for greater success tomorrow.
FAQs
1- What is the most important factor to consider when evaluating a CPQ vendor?
The most important factor is understanding how well the CPQ solution integrates with your existing systems, such as CRM and ERP. Seamless integration ensures efficiency and reduces errors in the sales process. When evaluating a CPQ solution, seamless integration with your current technology stack should always be a top priority.
2- How do I know if a CPQ vendor is the right fit for my business?
Evaluate the CPQ software providers based on their reputation, experience, and ability to meet your unique business needs. It’s crucial to understand whether the CPQ software selection aligns with your company’s growth trajectory and sales strategy.
3- What are the common mistakes businesses make when choosing a CPQ vendor?
Common mistakes include choosing a CPQ vendor comparison based on cost alone, overlooking long-term scalability, or not fully assessing how the solution integrates with current systems. The right easy-to-use CPQ solution can save time and resources in the long run.
4- How does CPQ software improve sales efficiency?
CPQ software accelerates the quoting process by automating price calculations, reducing errors, and enabling faster quote generation. When you choose one of the top CPQ vendors, you can expect enhanced real-time accuracy and a more efficient quoting process.
5- What kind of ROI can I expect from implementing CPQ software?
Implementing top CPQ software vendors can result in significant ROI, including reduced operational costs, faster time to quote, enhanced pricing accuracy, and increased revenue due to streamlined sales processes. By selecting the right CPQ software companies, businesses can enhance profitability over the long term.
