Manufacturers have a lot of variables to consider when it comes to determining the costs and pricing of their products, including materials from a wide variety of vendors. It gets even more complicated when you’re manufacturing a product for a client, and the client wants to get pricing for multiple different options.
You want to give them an accurate quote quickly that’s compatible with their needs and gives you a sufficient profit margin, even as material prices change and supply chain issues come about. It’s especially tough with ongoing supply chain problems in the wake of the 2020 pandemic.
Fortunately, there’s software that makes it easier to produce quotes for even the most complex manufacturing products, called Configure Price Quote (CPQ) software. Let’s take a look at the kind of CPQ solutions that are available for manufacturers, and how exactly they work and make it easier to produce quotes.
What is Configure Price Quote (CPQ)?
Configure Price Quote (CPQ) is not a new term, we’ve been using it since the early 1980s. However, this expedited process has evolved in every possible way to make our business more efficient and successful.
Configure Price Quote aka CPQ software helps create quote-to-cash processes quickly, efficiently and accurately by connecting everything, from everywhere, from one single platform. CPQ is designed to help sellers quote complex and configurable products. The system helps your company to be more efficient by streamlining the sales quote management process smoothly.
CPQ platform helps manufacturers to ensure accurate delivery, pricing, personalized and highly customized quotes and proposal documents.
Configuring is nothing but a process of comprehending and packing the company’s commodities and service options. Configure is customizing the procedure as per customers’ requirements with companies’ policies. This customization does involve local and international regulations..
It is an essential term in business and is majorly affected by economic conditions and industry dynamics. Production volumes and bundles are some other factors that are responsible for managing prices in the market.
Generation, renewals and amendments that need the approval of the professional estimated documents and quote. In simple language, it is a procedure where companies accept new/existing clients and make amendments to renew contracts.
How Does It Work?
When you run a business you need to be thorough with researching options, bundling existing services and products, and developing complex product lines, the visualization should be swift, correct and collaborative.
This software not only helps in generating interest but also allows its salesperson or distributors to select, specify, and quote products to win customers quickly. CPQ tool comes in handy in eliminating redundancy, human errors and saves a lot of time to create brand repo. Moreover, it’s an effective way to grow the number of quotes in less time.
When you’ve simple and integrated quotes for products, services and add-ons, you can approach customers with confidence. That means your sales channel can reach more customers along with high revenue returns.
When you use CPQ software with 2D and 3D visualization capabilities, let you show your customer how their product will look before getting on board with product-line production. With these capabilities, customers get a better understanding of what they are getting.
What Are The Features?
There are plenty of basic and advanced features of CPQ software that can be useful for your business. So let’s check them out.
CPQ software lets you configure distinct products and services depending on their characteristics. The software lets you configure your order lines by time management, volume discounts and quantities.
This platform predetermines all the possible scenarios and pre-configured process of quoting to offer advanced optimizing pricing for your product. CPQ gives a different context of pricing like discounts, block prices and volume discounts for certain products. The tool helps facilitate upselling and cross-selling propositions.
With this feature, you get better and more accurate estimation quotes and help your business to get stability and consistency.
CPQ’S visual product configurator projects lifelike real-time 3D renderings of your product on screen that gives a better understanding to customers of what they are getting.
Some CPQ tools are integrated with AI-guided selling which helps customers with sales reps and sales processes. Guided selling offers a roadmap that gives suggestions and popular methods for recommended upselling and cross-selling of products.
After the finalization of product configuration and approval of customers, the CPQ tool automatically generates exhaustive CAD files and visuals for the engineering department. This automation helps provide better projection and understanding to the customer for the final production designs.
Create Contracts & Quote Renewals
CPQ software helps create contracts and quote renewals to make the business smooth for the sales department. The tool generates subscription contracts that are valid for a certain period and automatically creates renewal quotes and opportunities after the completion of the subscription period.
You will find analytics modules across almost all CPQ tools. Analytics modules help in a systematic way to keep a tab on generated quotes, product configured and revenue recognized. CPQ helps enhance the speed of the sales cycle and sales reps by recognizing the impediments to the quoting process.
Examples of CPQ:
The insurance sector contains the most risk evaluation. With the help of CPQ software, this sector can reduce the time spent on pricing and quoting and prevent breaches. Agents and brokers can insert what customers’ insurance coverage needs are and can put them in real-time to get different quotes in a digital format. With this method, customers can compare their perks on one single screen before selecting a suitable option.
Motor dealers like manufacturers and distributors do rely on CPQ to configure their cars, vans, trucks and trailers. Let’s say at the time of car configuration many options are responsible such as model, engine, transmission, version, interior, or design. These factors normally depend upon what type of car customers have in mind whether they want sports, basic, premium, or luxury. Moreover, some transmission options are only available for certain engine types because not every transmission will be compatible with every engine type.
Just like any other sector, Telecommunication also uses CPQ tools to bill their customers based on their usage and additional monthly subscriptions. Let’s say a customer is paying for two GB of internet p.m, no matter if he overspent the usage, as he is charged a fixed monthly fee. However, when a customer overspends two GB of traffic, he will be charged a fixed monthly fee along with a surcharge for overconsumption.
How CPQ Software Is Useful For Your Business?
When you have complex and configurable services, it is quite difficult to keep up with correct estimates for customers. With professional guidance or CPQ software, you get an effective and quick solution for accurate price quotes that automatically eliminates your guesswork, human errors, and tedious traditional methods of estimating the value.
There are tons of various kinds of Configure Price Quote software services available in the market, you can go for any reliable tool that is capable of fulfilling your business needs and requirements.
What Are The Advantages Of Using CPQ Tool?
Every business’s needs and requirements are different from one another. Here is a list of some advantages that businesses shall get from using the CPQ tool.
- Smooth and seamless processes
- Effective to sell complicated configurable products.
- Offers quick responses to customer requests.
- Matching capacity and demand
- Achieving targets and staying compliant
- Accurate quotes and delivery estimation.
- Keep tabs on discounts and profitability to ensure favorable results.
- Provides additional sales opportunities.
- Higher customer satisfaction level
The Final Word:
Having a powerful tool is useful for configuring and pricing products. It is an efficient way to generate accurate quotes and delivery estimations. It is a great way to build a relationship with clients and save you from doing unnecessary work.
Tedious quoting processes are a big no-no for all customers, each buyer is looking for quick growth and stability. CPQ tool integrated into eCommerce that offers fast results which can normally take days. Speedy performance keeps your clients satisfied and creates brand loyalty.