Time is money. And in the world of sales, doing things efficiently and saving time can be enough to give you a much-needed edge over your competition. In fact, research shows 50% of prospective buyers choose the vendor with the quickest response time.

So, how can you jump the proverbial queue? Two words — CPQ software. Read on to see which CPQ features and requirements you should consider and how they can help ace your sales activities.

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Aberdeen Group’s fascinating study showed CPQ users outperformed non-users in sales quotas achieved, lead conversion rate, deal size and sales cycle times. It’s clear CPQ implementation has a lot of upsides. But like any technology, only if used correctly.

This piece will share insights into what CPQ does, the CPQ features you need and how you can get the most out of your solution. Let’s get started!

Table of Contents

• What Is CPQ?
• Needs Analysis
• CPQ and CRM Integration
• Key Features and Requirements
• Conclusion

What Is CPQ?

CPQ stands for Configure, Price and Quote. CPQ software is a sales-focused technology that allows you to speed up and automate workflows, approvals and product configurations to get quotes to clients faster.

Let’s break it down a little further.

Configure has to do with the product itself. When you have a complex product with many moving parts and potential customizations, you’ll want to show your customers you can meet their requirements. Visualizations, configuration rules and product catalogs are common features that support this.

Changes in products often translate to changes in prices. Pricing rules, discount approvals, margin indicators, real-time price calculations and price lists all help maximize profits and eliminate errors.

The final step in the sales funnel is the quote. Automated quote renewals, AI-powered upselling and cross-selling, templates, auto-fill and favorited quotes save time and help you seal the deal.

Now that you know what CPQ can do, let’s move on to how it can help you and your business!

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Needs Analysis

To paraphrase Tolstoy, all companies unhappy with their sales process are not unhappy in the same way. It’s important to understand the gaps you need to fill and the direction you’ll take in the future.

A clear understanding of what you’re looking for will streamline your search for the right CPQ software. Here are a few things to remember when thumbing through the extensive list of CPQ requirements and features solutions can offer.

What goals are you trying to achieve with this software?

Realistic expectations will help provide you with a clear benchmark to weigh products against. This will further help you understand your needs. Here are a few questions to ask yourself:

1. Do you already have CRM in place, or are you looking for CPQ solutions to solve this problem via a native system or integration?
2. How complex is your product? Will a rules-based configuration work for you, or do you need something constraints-based? Is your product catalog expanding?
3. Will you need to add multiple products and services to your quote? Some software starts to slow down with quotes of more than 1,000 line items, so test this feature during the demo.
4. Do you need AI-based capabilities for upselling and cross-selling or pricing recommendations?
5. Are you looking for software with integrated e-commerce channels?

Following this process and knowing what you’re looking for will help you get better insights from vendors during demos.

How easy will it be to train and upskill your workforce?

With any new software or process comes a certain level of training, and with that comes a learning curve. And like most things, practice makes perfect. The best way to practice with new software is via training.

Ask vendors what training they offer. Do they provide on-site training, webinars and educational material? If so, are there additional training packages you’ll need to purchase?

What are the minimum technical requirements you have access to?

Many CPQ solutions are cloud-based, but that’s not the only technical requirement you’ll need to consider. Identify the technical framework already in place at your business. Do you have the hardware and software to implement a new system?

Certain software also requires IT expertise, depending on the complexity. Check to see if you’ll need implementation support from the vendor and if they will assist with updates.

Is there software that specifically caters to your industry? Have your competitors invested in CPQ software?

Although it can be flexible, CPQ software isn’t one-size-fits-all. Doing a little sleuthing into the software your competitors use can go a long way towards finding a solution that meets your industry-specific CPQ requirements. For example, you may need more powerful visual configuration and flexibility with quotes if you supply complex luxury products like small aircraft.

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CPQ and CRM Integration

According to Nucleus Research, $1 of investment in CRM translates into $8.71 as returns. While the exact ROI may be different now, the fact remains: done right, it’s a solid investment. So, it’s no surprise plenty of companies are getting in on the action with CPQ and CRM integration.

Like peanut butter and jelly, CRM and CPQ integration just makes sense. It makes life much easier for your sales team to boot! Here are a few benefits of marrying your CRM and CPQ software:

• Centralized Storage Catalog
• Shorter Sales Cycles
• Larger Deal Sizes and More Deals Closed
• Streamlined Processes
• Brand Consistency
• Improved Visibility Into the Sales Pipeline
• Fewer Errors
• Reporting Insights
• Higher Customer Satisfaction

Key Features and Requirements

The right CPQ software can make a world of difference to your business. However, it’s easy to get caught up in the jargon and fancy features. It’s important to clearly understand the CPQ features and requirements you’ll need to stay ahead of the curve.

1. Price Management

Starship might have built this city on rock and roll, but CPQ has built its success on price management. McKinsey’s revolutionary study on the pricing waterfall and the effects of a one percent increase in price leading to an 8 percent increase in profits further drills home the importance of pricing.

An example of a pricing engine. Source

Most CPQ systems will be able to set pricing rules, apply discounts automatically, view price margins and calculate prices with the help of a pricing engine. You can also access insights into how potential clients will react to price changes and how demand differs based on analysis of historical data.

In addition, you’ll be able to set multiple prices based on customizations, saving time and eliminating errors.

• Apply Discounts on Products
• Contracted Pricing from the Previous Quote
• Create Multiple Price Lists of Products
• Create Pricing of Products
• Price Margin Indication
• Price Products in Bulk or Batch
• Pricing Engine
• Pricing Waterfall Chart
• Real-time Price Calculations
• Rule-based Price Calculations
• Tax Calculations
• Unit of Measurement (UOM) Conversion

2. Contract Management

Everyone loves a repeat customer. If your business runs on subscriptions, licenses or recurring agreements, contract management is here to make your life much much easier.

Create new subscriptions to easily renew contracts. Source

Also referred to as subscription management, this module helps sales representatives renew contracts based on existing services and contract status. Adding comments, viewing past terms and amendments, and obtaining eSignatures and approvals in a centralized location speeds up the renewal process.

• Add Comments in the Contract
• Clause Library
• Contract Amendments
• Contract Creation
• Contract Preview
• Contract Renewal
• Contract Repository
• Contract Status
• Dynamic Terms and Conditions
• eSignatures
• Unit of Measurement (UOM) Conversion
• Track Contract Changes

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3. Dashboard and Reporting

The key to making more intelligent business decisions is seeing what is working (and what’s not working) for you. Custom reports and dashboards help identify the changes needed in the ordering process, what discounts and prices are working, what customizations are popular and how to make improvements.

View KPIs and metrics in one location.

This information is easy to view with the help of graphs and reports and translated into actionable steps.

• Custom Reports
• Dashboard
• Pre-built Reports
• Report Scheduling
• Visualizations

4. Product Configurator and Catalog Management

Product configurators make the phrase “what you see is what you get” much more literal, especially when multiple customizations are involved. Pre-defined rules make it easier and quicker to create product visualizations, catalogs and bundles. This means customers cannot select options instead of being limited to set conditions.

Build 3D visualizations of products with multiple configurations. Source

Additionally, customers can customize bundles and add related products to create the best possible quote using guided selling and recommendations.

• Bulk Selection of Products from the Catalog
• Compare Products in the Catalog
• Configuration Template for Guided Selling
• Create and Customize Product Configuration
• Create Product Attributes
• Create Product Bundle
• E-commerce and Shopping Cart
• Grid and List View of Products
• Guided Selling
• Product Catalog
• Product Recommendations for Upsell and Cross-sell
• Product Visualization Tools
• Search a Product in the Catalog

5. Quote Management

The final aspect of the CPQ trinity, quote management, enables shorter lead times and minimizes errors with the help of templates and automation. Generate deal information and customer configured orders into quotes and implement pricing updates system-wide.

An example of a customizable quote template. Source

Collaboration between different users during the quote process helps keep everyone on the same page and avoid miscommunication. You can also save time by using customizable templates to insert company logos and pre-written text.

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6. AI-based Capabilities

AI has changed the game. With the help of historical data, AI-based capabilities can increase deal size with cross-selling and upselling recommendations. Insights sourced from data sets can provide discount guidance and performance analysis parameters.

However, it’s important to note that not all CPQ systems will have these capabilities. Many may have only one or two AI-based features. It’s best to double-check with the vendor on the specifics of their abilities if AI is key to your business model.

• AI-based Cross-selling
• AI-based Discount Guidance
• AI-based Pricing Recommendations
• AI-based Product Configurations
• AI-based Quote Performance Analysis
• AI-based Selling Recommendations

7. Mobile Capabilities

Imagine being able to create quotes, view pricing information and configure products on the go. That’s exactly what you’ll get with the mobile suite. Reduce lead times and get back to clients quicker.

Approve and view quotes using the mobile suite.

• Access to Pricing Information
• Product Configurator
• Quote Creation
• Responsive Web Design

8. Platform Capabilities and Security

This final requirement covers odds and ends and some additional CPQ features. Custom branding and fields make quote creation and processing quicker. Companies with international customers will appreciate multi-language support and the ability to convert prices into multiple currencies.

Convert prices into multiple currencies. Source

User-based permissions ensure exceptions in pricing rules, quote approvals and discounts are only green-lighted by select individuals.

• Audit Trail
• Custom Branding
• Custom Fields
• GDPR Compliance
• Multi-language Support
• Multiple Currencies
• Notifications
• Search Text in the Document Repository
• Self-service Portal
• Single Sign-on (SSO)
• User-based Permissions
• Workflow Automation

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Conclusion

Psychology 101 tells us that we need to be clear about our needs. A proper understanding of the CPQ features needed at your business is key. We’ve got a cheat code to help you. Connect with one of our experts using this no-obligation guided requirements solution to set you on the right track.

Still want more information? Check out our free comparison report to discover how well the top CPQ solutions stack up against each other. You’ll see how our analysts have scored each vendor based on CPQ requirements, features, reviews and more. Combine that with your needs, and you’ve got a recipe for successful software selection!

What CPQ features and requirements do you think are absolutely essential to your business? Let us know if we missed a few or hit the brief in the comments below.