Ready to take a dive into the lesser-known advantages of configure price quote (CPQ) technology? This article uncovers the five benefits nobody’s talking about, from CNC automation to intelligent upsells and beyond.
Let’s get started.
What Is Configure Price Quote (CPQ)?
CPQ is software that helps businesses–in particular manufacturers of configurable products–automate and simplify the processes of:
- configuring products
- calculating prices for configurable products
- creating and managing quotes, proposals, and other sales documents
- generating engineering files (like CAD files) and documents (like BOMs)
A CPQ system typically includes a user-friendly configurator that allows sales reps to input customer requirements and preferences. The system uses the information to generate a quote or proposal that it sends to the customer for approval. The configurator runs on rules that ensure configured products are a) compliant with the business’s pricing and sales policies and b) valid from an engineering perspective.
The best configurators are intuitive and visual, featuring interactive 3D product renderings and the ability to configure products using virtual and augmented reality (AR and VR). Sellers can embed their configurators into their website for customers to operate independently, enabling self-serve.
Learn CPQ Implementation from Start to Finish
It’s no mystery that CPQ has a major impact on customer experiences, but what can it do for your organization?
Integrating configure price quote CPQ with other systems like CRM, ERP, CAD, and payment processing platforms facilitates end-to-end automation. Customers can visit your website, configure a product, receive a price and quote, and place their order online. A sales cycle that once took days can now take minutes, and customers can buy from anywhere in the world.
5 benefits of CPQ (that everyone talks about)
CPQ software digitally transforms a manufacturer’s end-to-end configure-to-order workflow, saving time and money and enhancing the customer experience. Here are five of the most significant benefits.
1. Reduced errors and increased efficiency in the sales process
Configuring complex products manually is incredibly complicated and error-prone, especially when there are thousands of options and attributes to choose from.
CPQ software contains product rules that constrain the configuration process. Salespeople can only submit configurations that are valid and high-margin. Sales don’t have to go to engineering for advice, which boosts efficiency and reduces sales cycle duration.
2. Improved accuracy and consistency in pricing
Calculating a price for a configurable product is fraught with errors. One dot in the wrong place in an Excel spreadsheet can spell the end of a valuable customer relationship. CPQ (sometimes referred to simply as “quoting software”) automates pricing completely, eliminating the need for manual calculations. This saves time and reduces risk.
3. Less administrative pressure on the sales teams
CPQ does all the administrative work around pricing and quoting automatically, letting salespeople focus on activities that move the needle. Instead of pencil pushing, salespeople can generate leads, prospect for new customers, nurture existing relationships, negotiate deals, and close sales.
4. Increased customer satisfaction and loyalty
In markets where multiple manufacturers sell similar products and margins are squeezed to breaking point, the only way to differentiate is through customer experience.
CPQ enhances the customer experience across multiple dimensions, leading to loyalty, advocacy, and more sales for the business. Here’s what CPQ does for the customer:
- Simplifies the sales process: reduces friction.
- Shortens the sales cycle: quotes customers in minutes rather than days.
- Improves personalization: creates quotes and proposals tailored to your customers’ preferences, customer history, and negotiated prices, helping customers feel valued and appreciated.
- Ensures accuracy: shows customers up-to-date product and pricing information, reducing the scope for errors and misunderstandings and building trust.
- Improved visibility: tracks orders as they pass through the system, so salespeople can keep customers informed and updated.
5. Improved collaboration between sales and other departments
Most traditional manufacturers are siloed. Sales, engineering, and the shop floor base decisions on different data and systems, which causes alignment to deteriorate. Communication is poor, causing frustration and forming an “us vs. them” mentality between various departments.
CPQ provides a single source of truth for manufacturers accessible across the organization. It centralizes all the company’s product, pricing, and engineering “knowledge,” improving collaboration, efficiency, and innovation.
5 benefits of CPQ (that nobody talks about)
Through interactions with thousands of manufacturers and happy CPQ users, we’ve uncovered a range of benefits that, although seldom talked about, have been some of the biggest game-changers for our customers.
It’s worth noting that Epicor CPQ and other leading CPQ software vendors provide a range of functionality that more traditional CPQ software lacks. And this is one reason for the discrepancy between what we know and others don’t. This additional functionality includes the following:
- Visual product configuration: Users can configure products in 3D by clicking to see options and dragging and dropping components into assemblies.
- CAD and design automation: CPQ generates sales drawings and CAD files automatically without engineering input.
- Manufacturing automation: CPQ generates data for the shop floor, such as BOMs, CNC cut sheets, and additive manufacturing files.
- B2B eCommerce: Sellers can integrate CPQ with their B2B eCommerce platform to let self-service buyers checkout without interacting with a sales rep.
- Systems integration: CPQ integrates with CRM, ERP, and other systems using APIs, driving end-to-end automation.
So without further ado, here are five lesser-known beneficial outcomes you can expect if you implement Epicor CPQ in your business.
1. Enhanced ability to upsell and cross-sell
The average manufacturer is able to increase their deal size by 105% by implementing Epicor CPQ. This happens for two reasons:
- Using a visual product configurator increases clarity. Greater transparency enhances decision-making, reduces purchase anxiety, and encourages higher spending.
- Configurators recommend upsells and cross-sells tailored to each user, maximizing revenue from every deal.
2. A larger TAM (total addressable market)
CPQ makes selling configurable products easier. Manufacturers can extend the size of their product range, serving a broader cross-section of the market. And because the cost of custom engineering is low, they can afford to accept larger and smaller orders than they could in the pre-CPQ days.
3. Greater responsiveness to shifts in the market
With customer demands growing and shocks in the market coming thick and fast, flexible, adaptable manufacturers thrive. Fortunately, CPQ can make your company extremely agile. You can adjust prices, tweak messaging, and launch new products with a few clicks, staying ahead of the competition.
4. Shop floor automation
In addition to large chunks of the sales process, CPQ automates the creation of CAD files, relieving pressure on the engineering department and clearing bottlenecks. It can also super-charge processes on the shop floor by generating files like CNC cut sheets and sending them directly to machines so they can start production. No human checks and balances are required.
5. Improved data management
CPQ systems have robust data management capabilities, allowing businesses to collect, store, and analyze data from their sales, engineering, and shop floor processes. This visibility provides data-driven insights into customer behavior, preferences, and trends, which teams can use to improve the effectiveness of sales and marketing efforts. It can also help companies identify and optimize weak areas in the engineer-to-order workflow.
Configure price quote (CPQ) provides a wide range of benefits across multiple departments, from sales automation to collaboration, operational agility, and data management. Some benefits will have a more significant impact on your business than others. But you shouldn’t have to pick and choose: A leading solution like Epicor CPQ comes with all the functionality you need rolled into a single standalone solution.