The answer: Configure. Price. Quote.
If you are involved configuring products or services, calculating prices and providing quotes, this could be an extremely valuable read.
The more complex your product or bundles, and the more time it takes for you to raise a quote, the more this will interest you. And if your customers demand fast quotes, then by now you should be drooling.
So, what is CPQ?
CPQ is relatively new cloud technology.
It makes the job of building quoting quicker, with greater accuracy and improve control over pricing.
How does it work? Let’s take a typical manufacturing firm who make bespoke products for resellers.
Their quotation process may look something like this:
So, the pain points are:
- The customer can ask for something that cannot be made.
- Every quotation needs to be designed or costed out – let’s hope you have a very high conversion rate; else this time is often wasted.
- Pricing needs to validate every quote.
- The customer may receive quotes from competitors more quickly.
- Each stage is open to human error.
- Pricing is likely depended on complex spreadsheets or inadequate systems.
CPQ makes this entire process, quicker and more accurate. Here’s what happens.
- You would create pre-designed templates.
- These templates are a sequence of questions needed to collect enough details to produce a quote.
- The questions and answers are structured in such a way that the product cannot be misconfigured at the first stage.
- A bill of materials is instantly produced.
- A price is instantly produced
- A quote is instantly produced.
So once implemented, the quotation process now looks as follows: