How to Choose the Best CPQ Tool or Solution
With the right CPQ solution, businesses can reduce the number of errors and improve their speed in responding to customer requests. Choosing the right CPQ tool or solution requires an understanding of the features and functionality needed and the willingness to weigh the pros and cons of each option.
What to look for on your search for the right CPQ Solution
Not all CPQ software is created equal. While you navigate the search for the right solution, consider the top features you need to be successful:
- Guided selling
- Standard and non-standard deal management
- Quote to order conversion
- Product and service configuration
- Workflow and approvals
- Assets-based ordering
- Price adjustments
- Quote generation and amendments
- Analytics
Evaluating CPQ Options
When evaluating CPQ options, consider the features of each tool or solution. Look for features that will enable you to configure complex products, accurately calculate pricing, and create accurate quotes. Consider whether the CPQ solution has an intuitive user interface, and whether it integrates with other systems.
The right CPQ solution can have a powerful impact on the success of a digital transformation initiative. Behind the scenes, CPQ integrations allow data to flow between different enterprise systems, breaking down the silos that compromise the efficiency and effectiveness of digital solutions. CPQ can connect to CRM and ERP data along with pricing and configuration rules and product availability to allow different sales channels to generate quotes autonomously.
Top Features to Consider During Your Search
Visual Product Configuration
People want to see what they are buying, which means your CPQ software must include a visual component.
You can choose from 2-dimensional configurators and 3-dimensional configurators or take it a step further with a virtual-reality (VR) based product configurator.
Advanced Rules Engine
If you want to avoid forced refunds and unhappy customers, having a robust rules engine is a must for any CPQ solution you are considering.
Instead of relying on your sales reps or billing employees to catch quote and order errors, you can use CPQ software that does it automatically.
This is especially important for manufacturers and distributors of complex, configurable products, for whom configuration and quote errors can be incredibly costly.
Cloud-Based and Mobile-Friendly
A CPQ that’s cloud-based (and includes a mobile-friendly component, such as a smartphone app) gives you access to customer orders, pricing, and proposals from anywhere.
Your team can whip out the product configurator on location during a client meeting, make important updates to customer data on the go, and have all the necessary information to make sales calls while traveling.
This also reduces IT costs associated with storing a CPQ system on-site. It’s a win-win!
Automated Quoting and Pricing Management
Automation features included in more advanced CPQ software can help you completely eliminate necessary admin tasks like looking for product information and checking pricing information.
Automated quoting management ensures that quotes are automatically updated as the customer makes changes to their chosen product configuration.
With automated pricing management, any pricing updates will be applied system-wide to ensure accuracy and efficiency.
Guided Selling
Guided selling takes automation a step further, creating an Amazon-like experience for your business-to-business (B2B) customers.
They can use filters to search for the products best-suited for their needs while CPQ software uses their data to suggest recommended products based on their selections.
The software can also suggest other relevant products, accessories, and product bundles to boost potential revenue from the sale.
Integration into other Systems
CPQ solutions can weave a common thread through your front to back office applications for an end-to-end experience.
CRM integration links customer information to quotes and orders and can provide analytical insights such as buying cadence and upsell opportunities.
ERP integration provides pipeline visibility so that production knows what’s coming. Integration can also show sales which components are at risk for late delivery due to supply chain or other issues.
Other applications such as PLM and eCommerce can also be integrated for improved efficiency and channel expansion. The Cincom CPQ integration framework provides out-of-the-box connectors to many enterprise applications (e.g., Cincom CPQ, D365 CE, D365 F&O and Salesforce), along with the ability to easily extend and include connectors for other applications. Other out-of-the-box connectors include File, Email and SQL.
Reporting
Advanced reporting features allow you to see where in the ordering process the customers are dropping off, which product configurations are most popular, as well as other important insights about your quoting and ordering process.
CPQ can increase the quality and amount of information that you, as a Sales manager, can gain through the details of the quotes and corresponding configurations. Forecasting becomes on demand and super insightful with all of the data you dream of through CPQ reports.
Understanding Your Needs
The next step is to understand your specific needs. Think about the types of products and services you offer, and the complexity of the configurations needed to accurately display pricing, options, and other information. Also consider the volume of quotes and orders you process, and the type of customer experience you want to provide.
Do the comparison: see the benefits a CPQ solution offers compared to spreadsheet-based systems.
| COMPARE HOW THE ALTERNATIVES PERFORM | SPREADSHEETS, HOMEGROWN OR LEGACY SYSTEM | CPQ SOLUTION |
|---|---|---|
| Number of systems salespeople must access to create a quote | Multiple systems are required to generate a quote, which takes hours of cutting and pasting and reformatting; errors and omissions are common. | By consolidating legacy calculators and apps into one CPQ hub, sales personnel have all relevant data and product information available through one application. |
| Time required to generate a quote | Days, sometimes weeks, depending on complexity and availability of approvers. | Hours, even minutes in many cases. |
| Rollout of new products and features | Cumbersome, requires technical resources from IT. Out-of-date product offerings are often used by sales due to necessity. | CPQ keeps sales synchronized with current product and features. Standard updates can be done by non-technical personnel. |
| Quote revisions needed | Frequent revisions are needed to adjust invalid configurations, results in customer dissatisfaction and lost opportunities. | Revisions are only needed for rare exceptions due to exceptional circumstances such as supply chain issues. Products are quoted to match configurations that can be produced. |
| Onboarding new sales reps | Takes time to learn multiple systems and undocumented information. Quotes require heavy supervision; steep learning curve. | With CPQ, new salespeople can be onboarded quickly so that they’re productive and meeting quotas on target. |
| Product configuration | Ranges from open-ended order forms that allow incorrect configurations to having basic configurations included in a system. Any customizations require approval. | Rules-based options and guided selling eliminate incorrect configurations. Only special exceptions require approval. |
| Customer ability to drive product selection | Customers are reliant on sales to provide configuration information | Customer selection-driven prompts are available through a web interface. |
| Access to product expertise | Requires consultation with specific people | Captured in the product configurator, available to different sales channels. |
| Pricing | Typically, pricing is in siloed systems that require manual updates and intervention by finance and other departments. Margins are not protected, pricing requires multiple approvals and salespeople are not always aware of bundle deals or which discounts to apply. | Guardrails prevent non-profitable pricing; applicable bundles and discounts can be set up to guide salespeople. Approvals can be built in, leaving only special cases requiring extra sign-off. |
| Identification of cross-selling and upselling opportunities | N/A | The CPQ knowledge engine offers guided selling prompts to identify cross-selling and upselling opportunities. |
Consider the Costs
Consider the costs associated with each CPQ tool or solution. Compare the licensing cost, implementation fees, and ongoing maintenance costs to understand the total cost of ownership. Additionally, consider the cost savings you can achieve with a CPQ tool or solution, such as reduced time to create quotes and reduced errors.
Reduce Risks and Contribute to a Successful Digital Transformation
CPQ software can make a significant impact in solving business issues that result from using an inefficient system.
| RISK | CPQ SOLUTION |
|---|---|
| Low margins hurt profits | Pricing guardrails built into CPQ protect margins |
| Out-of-date product and pricing information is presented to customers | CPQ integrations break down silos and synchronize sales with current pricing and correct product configurations |
| Scalability is hindered | CPQ provides an infrastructure for guided selling that can be used by multiple sales channels such as dealers. CPQ systems also reduce the burden on IT |
| Selling opportunities to existing customers are missed | CPQ can present recommendations for upselling and cross-selling opportunities that a salesperson may not have been aware of |
| Inability to meet production deadlines | CPQ increases pipeline visibility so any potential supply chain issues can be addressed early |
| Tribal knowledge of products is lost when experienced employees leave | CPQ can capture tribal knowledge and make it accessible |
| Opportunities are lost to more responsive competitors | Many CPQ users cut quote times by 50% or more, increasing the likelihood of closing deals that would have been lost due to slow quoting |
Next Steps
Selecting the right CPQ tool or solution can have a significant impact on your business. Evaluate each option to ensure you understand the features and functionality available, and consider your specific needs. Finally, compare the costs associated with each option to ensure you select the best CPQ tool or solution for your business.
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Cincom’s solution is structured in a way that allows us to maintain control and modify our own business rules.
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Unify business units and streamline efforts with integrations to Cincom CPQ
Cincom CPQ™ provides out-of-the-box connectors so your sales team can accurately configure, price and quote products without having to switch between applications or resorting to manual activities.
Eliminate errors, onboard new reps faster, and give key stakeholders excellent visibility into the pipeline with our robust integration framework.
