What is CPQ?
Definition of “CPQ” – In a nutshell
Successful providers of technically complex and varied capital goods use Configure-Price-Quote (CPQ) software to further increase efficiency and success in their sales - including machine manufacturers such as DMG Mori or Voith, system manufacturers such as Siemens Energy and elevator specialists such as Schindler. They all share the motivation to optimally configure their products to meet the individual requirements of their customers (Configure), to calculate prices precisely (Price), to offer them in a convincing quote document (Quote) and to delight them with an outstanding customer experience.
The content at a glance
1. Definition of “CPQ” – In a nutshell
2. The CPQ functions in detail
3. The TOP 6 reasons for introducing CPQ
6. Practical examples: CPQ as a quote system for sales
7. Practical examples: CPQ for websites, portals and online shops
Configure
Users with little product expertise are navigated step by step to the product variant that best suits customer requirements using guided selling and questions consistently tailored to customer needs. Users with advanced product expertise can configure the products in detail using a product configurator. Based on product and relationship knowledge, this determines which options can be selected and which sensible cross-selling and upselling potential exists. The product configurator supports the user throughout the entire configuration process and ensures that the user’s decisions always lead to a technically buildable product by displaying recommendations and explaining how an existing rule violation can be eliminated. Interactive 3D product visualisation ensures a technological emotional connection in the quote process and helps to understand complex relationships.
Price
CPQ calculates prices simultaneously with the configuration of the products and enables discounting of individual items or entire item groups, taking into account individual discount limits or release workflows. Price validity, country- or customer-specific price lists are just as possible as subscription pricing in order to offer products and services based on usage or for defined periods of time - for example with the “Pay per Use”, “Pay per Month” or “Pay per Unit” models.
Quote
After the product is configured and the prices are calculated, CPQ brings together all quote-relevant information in one quote document. Product descriptions, prices, discounts and product presentations are presented in a personalised, convincing and CI-compliant layout. In addition to the binding quote, any other documents can also be defined and issued, such as technical specifications, price overviews or short offers (budget quotes).
Get to know the functions and benefits of the camos CPQ software.
CPQ Guide
Understand CPQ & recognise trends
This CPQ Guide is aimed at companies with technically complex and varied products and enables a 360-degree view of digital quote creation in B2B. It contains the most important findings from the latest CPQ publications and CPQ trends such as 3D product visualisation and green configuration.
The TOP 6 reasons for introducing CPQ
In over 200 customer projects (see our references) we have learned about a variety of reasons for introducing CPQ. We have summarised the 6 most common reasons in the following selection:
Lack of sales efficiency
“Our sales processes are not efficient. We lose orders because the competition sends out quotes faster.”
28% FASTER SALES CYCLE
Nestled between CRM, PIM, ERP and CAD, CPQ enables a 28% faster sales cycle through end-to-end automation. Time-consuming coordination between sales, product management and production regarding the feasibility of the product is replaced by automated plausibility and completeness checks and workflows. Orders are created directly in the ERP system.
Mistakes in quotes cost a lot of money
“We create our quotes using Word, Excel and other calculation tools. Manual data transfers and nested tables cost us a lot of time and money due to errors that creep in.”
100% ERROR-FREE QUOTES
CPQ ensures that manual data transfers from different tools are a thing of the past, so errors are avoided. The product configurator’s rules also ensure that only correct and buildable product variants can be put together. Since prices are automatically calculated from the finished configuration and a quote is created, errors are also excluded there.
Lack of emotional connection in the quote process
“There is a lack of emotional conn connection in our quote process. The result is that the hit rate for our quotes is too low.”
30% INCREASE IN HIT RATE
CPQ consistently focuses on the customer throughout the entire quote process with features such as Guided Selling and impresses with a technological emotional connection through 3D visualisation of the configured product. The result: Outstanding customer experience in the quote process and an increase in the hit rate by 30%.
Get rid of knowledge monopolies
“Sales and supply knowledge is in our employees’ heads or is distributed across different systems. New sales employees have to undergo extensive training every time.”
NEW EMPLOYEES ARE READY FROM DAY 1
CPQ manages sales and quote knowledge centrally. It ensures that every sales employee advises customers based on a systematic process (guided selling) and a consistent database and sells the product that best meets the customer’s requirements – and not the product that they themselves know best. New employees are also navigated through the CPQ process and can sell independently from their first day of work without any training.
Use the opportunities of green selling
“We see that sustainability and an ecologically sustainable and energy-efficient product configuration will be a competitive advantage in future, but we don’t know how we can make use of these opportunities for ourselves.”
GREEN CONFIGURATION
CPQ offers the opportunity to promote sustainable configuration decisions at the time of product configuration and to transparently communicate their positive effects on the environment as well as economic aspects such as ideal energy and resource consumption. These are clear selling points that increase sales.
E-commerce for products that require explanation
“We rely on the know-how and support of our sales engineers to sell our products. Our products are too complex to offer them online and leave the configuration to the customer themselves.”
CPQ AS A REQUIREMENT FOR CUSTOMER SELF-SERVICE
CPQ integrations into websites, portals and online shops work very well for products that require explanation, because guided selling also guides product laypeople intuitively and specifically to the optimal product variant, which they can also get to know via 3D visualisation. Technically complex capital goods such as machine tools, excavators or drive solutions are increasingly being sold online.
You want to know ...
... what the optimal preparation for a CPQ project looks like?
... what to look out for when selecting a solution and provider?
Then download our whitepaper "How to Start with CPQ":
CPQ integration
CPQ CRM integration: Only successful when working together
A current survey by the VDMA shows that only 40 percent of machine and system manufacturers are currently using a CPQ system. The number is low considering that CRM systems are already widespread in the same industry at 80 percent. But when it comes to selling technically complex capital goods, a CRM system alone is not enough. Although it helps to keep an overview of communication in the sales process, a CPQ system is required for the customer-specific design of the products and in order to be able to incorporate them into the production process in digital form.
CPQ ERP integration: Why you can’t do without it
When a customer accepts a quote, an integration between CPQ and ERP can automate the order fulfilment process. The created orders are transferred directly to the ERP system, which speeds up order processing and ensures that the correct products, prices and quantities are used. Integrating a CPQ system with an ERP system also offers the following advantages among others:
- Data consistency: The integration ensures that the product configurations, prices and quotes from the CPQ system are seamlessly transferred into the ERP system and avoids errors that could occur with manual data transfer.
- Inventory management: The integration allows the CPQ system to access real-time information about product availability and inventory and take this into account for product configuration.
CPQ examples from the real world – application scenario: CPQ as a quote system for sales
The classic application scenario for the CPQ solution is its use as a quote tool by sales employees in the office and in the field. The CPQ solution helps you respond faster and more accurately to customer inquiries, strengthen customer loyalty and increase sales efficiency. Communication with customers is consistent and professional at all times.
Practical examples:
CPQ examples from the real world – application scenario: CPQ for websites, portals and online shops
In recent years, CPQ has been increasingly used by customers as a self-service solution for creating quotes. The CPQ software is embedded in websites or portal solutions or integrated into the online shop with a check-out option.
Practical examples:
DMG MORI enables its customers to create quotes for machine tools as a self-service via the website. You configure your machine tool yourself and experience in 3D what you can expect from the product. DMG MORI web configurator.
Schindler enables its customers to independently design their dream elevator on the website with the help of a guided needs analysis (so-called guided selling) and creates up to 3,000 quotes daily using CPQ software. Schindler web configurator.
Festo customers create customer-specific applications for factory and process automation on the website and can order the individually configured products directly using a check-out function. Festo web configurator.
Who is a CPQ system suitable for?
CPQ is suitable for all companies that want to optimise their sales processes, especially if they offer products or services with many possible configuration options and need quick and accurate quoting. This applies in particular to providers of technically complex and varied capital goods in the B2B business, such as manufacturers of tailor-made industrial machines and systems that need to be configured individually for each customer.
What are the benefits of CPQ?
A CPQ system makes the quote process more efficient and offers advantages for various areas:
CUSTOMER
- Orientation on their individual requirements
- Clear idea of their product’s properties
- Information available ad hoc - quotes available virtually in real time
SALES
- Faster quote process - higher success rate
- Error-free quotes – customer satisfaction, margin
- Profit increase - rules for complying with discount limits
- Centrally managed knowledge - sales without technical know-how
MARKETING
- Cross- and up-selling options for the system
- Intelligent evaluation of sales data
- Data on market and product trends
- User interfaces and quote templates in the corporate design
PRODUCTION
- Technically correct and complete configurations
- Scale effects through product modularisation reduce costs
What is the ROI of CPQ software?
CPQ software helps increase sales efficiency and revenue, improve customer experience, and minimise errors in the quote process. But the return on investment (ROI) depends on various factors and can vary depending on the industry and company. Factors that positively influence ROI are:
Increased efficiency in sales: CPQ automates the process of product configuration, pricing and quote creation. This saves time and costs and reduces errors in the quotes.
Cross-selling and up-selling: CPQ provides recommendations for complementary products or services, resulting in additional sales opportunities.
Data-driven insights: CPQ software provides analytics about configurations, sales trends and customer preferences that help in decision making and planning future strategies.
If you would like more information about ROI in your industry, please contact us.
Factsheet camos CPQ
This factsheet contains all important product information about camos CPQ on 12 pages. It shows the benefits of the software and how it differs from other CPQ solutions. The feature list gives a comprehensive insight into the most important functions. In addition, you will see how easily camos CPQ can be integrated into your existing IT landscape via standard APIs.
