If you are new to Configure-Price-Quote (CPQ) Software it may be good to know that it is fairly common that people are unclear about what CPQ actually does. I typically earn blank stares when I say what I do without providing some examples. Therefore let’s start with some examples that show where CPQ Software is used.
- Building a computer online e.g. Apple, Dell, Hewlett-Packard
- Building a car online e.g. Mercedes-Benz, Nissan, Porsche
- Buying furniture online e.g. Hammel Furniture, Palmberg
Basically every time a user can change a product in many different ways there is a good possibility to use CPQ Software.
My objective for this blog post is to provide some Key CPQ information in three categories (Basic Information, Helpful Websites, Common Misunderstandings) that can be read in less than 10 minutes.
First Category: Basic Information
- CPQ Definition
- CPQ or Configure/Price/Quote is Software that helps Sales Teams and Resellers to prepare a quote for a customer. Website users can use it to create orders. It does contain three major components
- Product Configuration: Helps the user to build a (complex) product
- Price: Helps the user to determine the correct price for that product
- Quote: Helps to create and distribute a quote to a customer
In addition to this it also includes workflow capabilities. This helps for example with getting required approvals before a quote is send to a customer
- What are the benefits of using a CPQ tool?
- Efficiently share best practices of your best Sales Reps and Channel Partners
- Increase deal sizes with cross-sell and up-sell guidance
- Eliminate quote/opportunity/contract errors
- Quickly create accurate quotes and proposals
- Close more deals
- What types of CPQ tools are available?
- SaaS – The CPQ application is available to users over the internet
- On Premise Software – The CPQ application is available to authorized users
- How many CPQ Vendors offer solutions? There are over 80 CPQ Solution Providers. They specialize in different functionalities, Industries, CRM Systems, ERP Systems, customer sizes etc.
- Who uses a CPQ tool?
- Sales Teams – meaning your Sales Reps use the tool
- Channel Partners – meaning your Channel Partners use the tool
- Website users use the tool as well
- Who maintains the CPQ tool?
- If you want to add new products yourself: While many vendors state that business people can do the maintenance it usually doesn’t hurt if you have someone with a good grasp of technology to do the maintenance
- If you want to outsource the product setup (e.g. because you don’t have many changes in your product line): Then you need to identify who does the maintenance (CPQ Vendor or Consulting Company) for you
- How to measure CPQ Return on Investment (ROI)?
- See this link
- What does a CPQ tool cost?
- That varies widely depending on many different parameters and hence a short answer is not helpful.
Second Category: Helpful websites to learn more about CPQ
- Don Cochran’s website provides good information about CPQ. His company (eSpline) also offers services to convert SAP Product Models so that they can be used in other CPQ tools
- Lou Washington from Cincom contributes to the CPQ Daily . This provides CPQ News from many different sources in a Newspaper Format.
- Lars Hoegsted from Hoegeye has an interesting approach regarding configuration strategies that you may want to check before you start setting up product models in your CPQ tool.
- Software User Review Sites like G2Crowd, Trustradius and Capterra are helpful in looking at User Reviews of CPQ Software
- Aberdeen provides lots of helpful CPQ Research, Gartner (Magic Quadrant) and Forrester (Wave) also provide CPQ information
- We also provide lots of resources at NovusCPQ.com (check our Resources Menu Option)
Third Category: Common Misunderstandings
I can do all CPQ tasks myself OR I ask the consulting company I always work with for CPQ advise
- While CPQ is not Rocket Science it is usually a good idea to engage a company with deep CPQ experience. This may or may not be the consulting company you currently work with! CPQ Projects typically touch many different business areas and if it is done incorrectly it can be a very costly mistake! I have seen numerous clients that needed to install a CPQ system for a second time since the first implementation didn’t give them what they needed!
I can search Google or LinkedIn and find potential CPQ Solutions online
- Yes you can find lots of information and lots of potential CPQ Solutions online. The challenge is to find which one may be the right one for your company. I have worked with numerous companies who had gathered data from different CPQ Solution Providers and then got stuck when they tried to compare the data. This was actually the trigger for our CPQ Provider Series. My recommendation is to do online research but don’t spend more than a day or two on this (to determine 8-10 potential CPQ Solutions) and don’t ask for a CPQ Demo right away! Make sure that you really know what you need because that allows you to ask better questions during a CPQ Demo.
It doesn’t matter which tool you have they are all the same anyway
- This is simply not true. There are considerable differences between CPQ Solutions. Too many to get started here.
- Note that I generally agree that the “change willingness” of users is more important than any tool!