What is CPQ software? How will it speed up our sales cycle? And can it handle our incredibly complex, customizable products? We hear the same questions all the time, so we’ve rounded up the answers. If you’d like to discuss any of them in more detail, get in touch. We’d love to hear from you.
1. “What is CPQ software?”
Let’s start at the beginning, the number one question: ” What is CPQ software?”
In a nutshell, CPQ (configure price quote) software helps to automate product configuration, pricing, and quoting, so that you can sell more products, with fewer mistakes, faster.
Let’s dig a little deeper into the CPQ process:
A customer comes to you with a problem they want to solve by purchasing one of your complex products. You have a massive product catalog with hundreds of options and dependencies, so configuring the optimal product for that customer is hard.
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?
It’s almost impossible for sales reps, especially new hires, to optimize products for every customer. Best case scenario – they stick to what they know, leaving customers only moderately satisfied. At worst – they make a disastrous configuration mistake or design a product that won’t work from an engineering perspective.
CPQ software contains product and pricing rules that govern the configuration process. They ensure that every product is optimized for engineering efficiency, profitability, and customer satisfaction and that the right price is quoted every time. Margins are protected and rogue discounting is eliminated.
Traditional CPQ software asks reps a series of questions about the customer and picks out the right options according to their answers. A visual CPQ solution like KBMax enables visual product configuration whereby sales reps or end-customers themselves can interact with a visual representation of a product to configure it in 3D (more on that below.)
Once the product has been configured, CPQ software automatically generates a sales quote, generally in PDF format, which is sent out to the customer. Sales reps don’t have to mess around number-crunching in Excel. Instead, they can get on with doing what they do best – selling.
2. “What is a visual CPQ platform? And do I need one?”
As we touched on the above, a visual CPQ tool lets users configure products with an intuitive visual interface (a visual configurator) rather than relying on text. A visual product configurator might be 2D with an Amazon-style filtering system. Or it could be 3D with augmented and virtual reality capabilities.
If you’re operating in a highly competitive industry selling big-ticket items, then providing a fully immersive buying experience is a stand-out differentiator. But more than that, it increases buyer confidence and triggers spending.
As customers play around with products on-screen, they end up selling to themselves. They take ownership, understand all configuration options, and feel emotionally invested in their purchase decisions.
3. “How does CPQ work for B2B eCommerce businesses?”
Today’s buyer wants to self-serve, and they want to do so from anywhere, any time, using any device. Just a few years ago this wouldn’t have been possible. Because buyers lack the technical knowledge needed to configure a product from scratch.
Product and pricing rules built into your CPQ system mean that buyers no longer need this knowledge. However complex and expensive your product, customers can configure them independently, free from sales pressure and interference.
With KBMax, you can embed your 3D visual product configurator right into your B2B eCommerce website. You can give customers access to the same interactive configuration experience that sales reps use behind the scenes. Once they’ve configured their product, they can place their order instantly.
4. “How will CPQ software speed up our sales cycle and improve our bottom line?”
Intelligent algorithms (product and pricing rules) built into your CPQ solution maximize profitability and customer satisfaction from every transaction. Sub-optimal configurations and human errors are entirely eradicated, which means fewer delays, returns, and chargebacks, and considerably happier, more loyal customers.
CPQ software simplifies and automates your sales process, freeing up your salespeople to spend more time bringing in new business and strengthening profitable relationships. Reps have comprehensive knowledge of your products at their fingertips and quickly become trusted advisors to your customers.
5. “What impact will CPQ have on engineering efficiency?”
CPQ software enables reps to configure the most sophisticated products without ever having to call on the expertise of the engineering department. Product rules coded into the backend ensure every configuration is viable from a technical standpoint.
With CPQ software, there’s no need for back-of-a-napkin sketches. All the relevant information is captured in full up-front in a language everybody intuitively understands. This gets rid of all the back-and-forths between customers, sales managers, and engineering. Then there’s CAD and design automation (see below.)
6. “What is CAD and design automation?”
KBMax differs from any other CPQ solution on the market in that it offers CAD and design automation for engineer-to-order products. This takes engineering efficiency to new heights.
Once the user – be it a sales rep or end-customer – has configured their product, KBMax automatically generates technical drawings through SolidWorks, AutoCAD, Autodesk Inventor or PTC Creo, before sending them on to engineering and the shop floor.
Finally, you can clear those engineering bottlenecks and let engineers focus on innovation rather than mundane, menial tasks.
7. “Can CPQ software handle my complex product?”
That depends on the CPQ tool you have at your disposal. KBMax is a CPQ vendor that can handle any complex product. It’s widely used throughout the biotech, high-tech, and vehicle manufacturing industries which are notoriously complex.
Fortunately, you don’t need to be able to understand programming or technical terminology to benefit from product and pricing rules in KBMax. Users build rules by dragging blocks around and snapping them together to form logic statements with dropdowns, color-pickers, and buttons making the job accessible to everyone.
Complicated pricing strategies are just as straightforward. You can layer pricing rules and tools on top of your price lists. You can even copy and paste them out of Excel straight into KBMax’s back-end. Sales reps can override automatic pricing calculations in line with their user privileges with custom approval loops set up to keep everything streamlined, manageable, and transparent.
8. “How would we go about implementing CPQ within our organization?”
These are the three CPQ implementation steps we advise all our clients to take to ensure widespread adoption and a smooth rollout:
- Assemble a strong, cross-functional team made up of both technical and non-technical members. Have an executive sponsor who serves as the linchpin. They should be responsible for championing the project, securing cross-departmental support, and providing business context to the project manager and team.
- Your team needs to work together to identify your critical business drivers (what are you trying to achieve?) These will inform your choice of CPQ tool provider and your setup. Do you want to reduce time-to-quote, increase deal size, promote market growth, improve order accuracy, grow customer retention, or all of the above? Design for outcomes, not features.
- Post-implementation, you have to provide practical, role-specific training that’s broken down into digestible chunks. This gives your team the confidence they need to stick with the process as they come up against the inevitable challenges.