Can CPQ software help further your digital transformation agenda?
IRRESPECTIVE of industry, sector, and company size, businesses thrive when their sales teams succeed.
Therefore, companies chasing digital transformation often decide to prioritize technology solutions that help support the needs of their sales teams. CPQ software is one such need.
CPQ stands for “configure, price, quote”. It enables sales teams to configure product and service offerings, pull out pricing information and associated discounting policies, and issue quick and accurate quotes to customers.
Here’s a hypothetical scenario to help demonstrate when and how CPQ software might help organizations:
- Organization ABC sells five kinds of commercial air-conditioners in three variants each. As a result, its portfolio has a total of 15 products.
- The company has a standard pricing framework but also provides off-season discounts, bulk purchase discounts, and cash settlement discounts, along with offering sales teams a discretionary discount to incentivize customers to sign on the dotted line.
- When a potential client makes a request for a quote, sales teams might have to refer to the product catalog, factor in the specific requirements of the deal (volume, season/off-season, etc), apply the relevant pricing policies, and then offer quotes.
- Aside from slowing down the turn around time on providing the quote, there’s also a lot of room for error.
- This is exactly why a CPQ software can help turn things around for sales teams, generating a quote automatically once the request has been “configured”.
Although CPQ software has been around for almost a decade, the reality is that for the most part, it was an enterprise offering that small and mid-sized enterprises (SMEs) found hard to gain access to.
With top-notch software providers jumping onto the software-as-a-service (SaaS) model, however, CPQ software has become more affordable — making it an important part of the digital transformation plan for most organizations.
What can CPQ software do for sales teams in the digital era?
Objectively speaking, although CPQ software has been around for a while, new technologies such as artificial intelligence, machine learning, and big data analytics have caused the product to go on a transformation journey of its own.
Recent versions of CPQ software can not only assist sales teams provide quick and accurate quotes but also factor in additional business details such as production schedules, output capacity, unused capacity in the factories, cost of raw materials and stores, and other details that can further fine-tune the quote.
If the organization is able to assimilate data from external sources, it might also be able to churn that information to create more intelligent quotes for the sales team and the company and allow it to gain an edge over competitors who might struggle to optimize quotes quickly.
Given the understanding that CPQ software is able to gain about the company’s pricing policies, it might help the sales teams offer more compelling incentives to potential customers in order to get them to sign on the dotted line.
Overall, except for very small organizations that only offer a handful of standard products at catalog price, CPQ software can really work wonders in the digital age.