The Benefits of CPQ: A Comprehensive Guide
Your customers expect timely, accurate quotes whenever they place an order. But in the era of mass customization, providing these quotes on an infinite number of product variations is challenging.
Configure, Price, Quote (CPQ) software is designed to address these challenges by fueling a self-serve product customization process that offers updated pricing without damaging your margins through inaccuracies.
So, how does CPQ work, and what are the benefits of CPQ software?
What is CPQ?
CPQ consists of a sales tool or a suite of tools designed to optimize the purchasing process and streamline your sales pipeline. It supports organizations across various industries to create accurate sales quotes personalized to the customer.
Within the manufacturing industry, your customers may need to wait for days while your sales team liaises with various departments to determine what’s viable and create a quote that reflects the work involved.
Today’s customers don’t want to wait. And now they don’t have to because one of the significant CPQ benefits is that salespeople can create and share sales quotes at the click of a button.
While this is the most basic function of CPQ software, contemporary offerings go much further to improve the customer experience. Let’s examine the pros of CPQ software and how CPQ benefits your organization.
The Benefits of CPQ
CPQ advantages allow your sales team to spend less time on administration and more time interacting with customers. Instead of dealing with a mountain of Excel spreadsheets, they have automated instant quoting at their fingertips.
The benefits of CPQ software also extend to the customer’s purchasing process. So, here’s a breakdown of how CPQ’s competitive advantages can lend themselves to your digital transformation.
Protect Deal Margin
Every organization has a set deal margin to determine its profits on its products and services.
Unfortunately, inaccurate quoting can cause this margin to erode. If a customer is provided with an incorrect quote that fails to reflect the various add-ons requested, your business has a choice: either increase the quote and upset the customer or eat the loss.
CPQ software ensures this never happens because of its advanced engine that accounts for all of the requests a customer might make and provides quotes based on specific needs.
Improve Efficiency
Did you know that 40% of sales teams still need to achieve their goals in 2023?
Your sales team might work hard, but are they working smart? Losing customers at the last second often occurs because of a glacial sales quoting process.
CPQ software streamlines the process by ensuring agents have all the necessary data at their fingertips to provide an accurate quote. Moreover, CPQ software creates consistency across your organization by guaranteeing this same data is available to all relevant personnel.
In other words, you can make “Let me get back to you on that” a thing of the past.
Improve Accuracy
Inaccuracies lead to a poor customer experience. If you return to a customer with an updated quote explaining that you made a mistake, expect it to leave a bad taste in their mouth.
Your process must be perfect every time because as many as 86% of customers will abandon a brand after just two bad experiences.
Although humans make mistakes, this can cost your business hundreds of thousands of dollars. CPQ is designed to remove human error from the equation by delivering accurate quotes you can rely on every time.
Improve Customer Satisfaction
Customer satisfaction is the most critical battleground in modern-day business. That is why contemporary CPQ suites contain various tools to enhance customer satisfaction. So, it should be no surprise that companies using CPQ software see a 17% higher lead conversion rate.
CPQ software improves customer satisfaction rates through several techniques, including:
- Accurate quoting
- Self-service purchasing process
- Faster contracting process
- 3D visualizations of their orders
- Personalized service
Remember, 89% of consumers have said they will switch to a different brand if you don’t provide the service your prospects expect, making a CPQ an excellent part of your customer retention strategy.
Minimizes Quote Time
CPQ solutions reduce the time needed to create quotes. With set rule parameters and dynamic pricing as the customer builds their order, customers can receive instant quotes to inform their purchasing decisions.
Faster quoting also increases your overall quoting capacity because your sales team can skip meetings and manually provide data to decide on a quote. After all, the data is already there.
The core of CPQ is that it largely sidelines the human resources aspect of providing accurate quotes fast. Additionally, this means your personnel can spend more time building relationships and attracting more business.
Reduced Training Time
Sales rep turnover is significant, with some agents leaving organizations within two years of joining. Some industry estimates state that it can take 3.2 months to fully train a new addition to the team, followed by a long period for them to get up to speed.
That is a drain on your resources, which is why CPQ is such a powerful addition to any business. Since CPQ is a constraint-based engine, it can automate your sales team in designing and building complicated solutions for your customers with little to no training required.
By equipping your organization with an intuitive user experience, you can easily upsell and cross-sell items your agents may be unfamiliar with.
Apply a More Consistent Approach
Larger organizations can benefit from more consistency in their practices. Ideally, every sales rep would follow your company’s most effective practices to land new business. However, with varying competencies, this is easier said than done.
CPQ systems provide the data you need to capture and apply best practices from day one. That also applies to your newest and least technically-minded agents.
Every rep will also have access to the same data at their fingertips, which ensures everyone is on the same page.
Enjoy a Fast Return on Investment
Incorporating any new tool into your organization requires a sizable investment. Before deciding whether a solution suits your organization, you must crunch the numbers.
The advantage of CPQ solutions is that they are designed to deliver a fast return on your investment by enhancing your quoting capacity, increasing your conversion rate, reducing your cost of sale, and eliminating quoting errors.
It’s these benefits of CPQ that are convincing more and more companies to invest in it. To date, 83% of sales professionals are now using some form of CPQ.
Enjoy the CPQ Competitive Advantages with Tacton
Not all CPQ solutions were created equal. Essential tools may provide instant quoting capabilities, but these need to fulfill the true potential of what these systems offer. At Tacton, we focus on delivering innovative tools that push your capabilities to the limit.
Some of the added features you can take advantage of to enhance your competitive edge include:
- 3D Visualizations – Allow your customers to see the products they build in real-time. They can rotate, angle, and see their order from every angle before they spend a cent.
- CAD Generation – One-click generation of 2D and 3D CAD drawings for every product variant you can submit to the customer and different departments.
- Document Generation – Automatically create documents for quotes, certifications, technical specifications, and more.
- Administration – Make your front and back office even more effective with data management tools, sales, workflows, and approvals.
- Analytics – Benefit from custom analytics to feed your business intelligence to improve your offerings and how you serve your customers.
Quoting and constraints-based systems are just the beginning. Tacton is designed to change how you operate to drive performance enhancements using every conceivable metric.
Implement CPQ with Tacton
The benefits of CPQ extend to every aspect of your sales process. You can improve your sales team’s operations, reduce errors throughout the process, and bolster the customer experience by letting your prospects operate independently.
In short, you can move faster and more efficiently without compromising the accuracy or quality of your services.
So, what are you waiting for? Discover the power of Tacton and join leading manufacturers by scheduling your free demo today!