Simply put, CPQ is a solution that:
automates and optimizes the sales proposal process, and
is built on a product and pricing configuration engine, which
enables centralized control of pricing and discount structures, and also
includes detailed analytics on the progress of every quote.
The question many B2B sales people ask is, “Can I use CPQ with my existing CRM?”
Yes, CPQ solutions like iQuoteXpress (IQX) integrate with CRM,
AND
No, you can use CPQ (IQX, anyway) as a standalone solution — in some cases, it may be all a small business needs.
Automating the sales proposal process
Obviously, even with CPQ, there is a human interaction element in every sales quote: a sales rep has to determine if there’s an opportunity to create a quote, and then select a template and populate it with the right products and services.
But compare that to how quotes were built just a few years ago: a rep had to create a proposal in Word, review products and pricing in a database or spreadsheet, and manually insert them.
The different programs and manual processes created endless opportunities for things to go wrong and, unless the rep was also a professional graphic designer, resulted in a sales quote that looked shoddy. CPQ fixes that by providing professional quote templates and a drag-and-drop interface.
Centralized control of product and pricing configurations
CPQ means, literally, configure, price, quote, as every solution is built on a product and pricing configuration engine that delivers concrete benefits:
It keeps all products and pricing in the same place, and centrally administered. This means no more confusion with one rep using price sheet A and another using price sheet B.
It also enables you to ensure you’re only presenting your winners, as the CPQ administrator is able to optimize configurations based on past proposals: even first time reps will be presenting only proven winners — no more “winging it.”
It allows for centralized control of discount structures as well. Sometimes, in the “passion” to close a sale, a rep may offer a discount that bites too deeply into your margins: this is rendered impossible with CPQ.
Quote reporting: the devil is in the details
If you’re using a CRM system to create funnels and forecasts, you know the importance of tracking every step of your sales process. You may have also noticed that when it comes to tracking sales quotes, most CRM solutions don’t offer much: you can see a quote was sent… and you can see if it was signed… and… that’s it.
With CPQ, you can track every detail in the quote signing process. Oftentimes, the first edition of the quote sent is not the one that ends up being signed: you need to track every edit, every revision, every inquiry along the way. Knowing why a quote was or was not signed is perhaps the most important question a sales team has to answer: CPQ gives you the answers you need to take the action required.
CRM & CPQ: Together, or apart?
We’ll be blunt: if you’re part of a business that has more than a few sales reps and more than a few products and you’re NOT using a CRM system to forecast and funnel, you’re making a big mistake.
If you are using a CRM but not CPQ, you’re missing a big opportunity for some easy wins because, clearly, you know that the right tech makes a big difference. And just like you wouldn't use, say, Outlook for your customer relationship management (CRM) needs, you shouldn’t be using CRM for your configure, price, quote (CPQ) needs. Get the right tool for the job.
HOWEVER: if you’re a small business, bigger than a mom-and-pop, but maybe not quite having 7-figure quarters yet, and you’re debating whether a CRM is needed, you can start with CPQ.
With built-in contact management tools, and dashboards on the progress of your sales quotes (the most important part of the sales process, after all), a standalone CPQ system may have just enough tools to function as “CRM-lite.”
We’ll be blunt here, too: CPQ without CRM isn’t necessarily a long-term solution, but in most cases, it’s enough to help move a small business (lowercase “s”) to the SMB realm where a CRM becomes a must rather than a nice-to-have.
