The simple definition of CPQ is that it’s an acronym for configure price quote software, with the C, P, and Q defined thusly:
Configure: putting together specific products and services that best meet a customer’s needs in an arrangement of some kind… let’s call it, oh I don't’ know, a “configuration.”
Price: Find a sales organization in which every single rep is always using the same pricing for every product and we’ll show you a sales organization staffed entirely by robots. But CPQ can help as the P means the ability to centralize pricing: one administrator or manager can control all pricing in all quotes and ensure it’s optimal.
Quote: You have your products configured, the best pricing is set, and now… you call your customer and tell them about and ask them to write it all down. No. You send a quote, the Q in CPQ, which is the means by which the C and P are packaged, delivered, and tracked.
So that’s a simple definition. The best definition, however, is that CPQ is a key driver in the guided selling process.
A silver bullet for sales proposals
Every business is always looking for a silver bullet solution to all its challenges, and usually coming up short. The reason for this failure is that most business challenges have too many moving pieces for one solution to address.
CPQ is different because it’s a solution dedicated to fixing one part of your business: the sales proposal process.
Ever hear the maxim, “Do one thing and do it well?” That maxim was actually coined in reference to how configure, price, quote software does sales proposal automation (maybe not “actually,” but maybe “possibly”).
Using a CPQ solution instead of manual processes to build, send, and track sales proposals eliminates opportunities for manual error (by automating), improves the look and feel or every quote you send (by providing templates), and helps speed overall throughput (via robust sales proposal reporting and other tools).
Is it a silver bullet? No. It’s a silver bullet on steroids. And a critical part of the guided selling process.
Just a buzzword?
Is guided selling a buzzword? If you’re using CPQ integrated with CRM (be it Zoho CRM with CPQ, Dynamics 365 with CPQ, Salesforce, HubSpot, etc. etc. etc.) then most certainly not, and we’ll tell you why.
But first, “guided selling” itself. At the heart of guided selling is a preconfigured set of steps, questions, and processes, all designed to help a rep lead a customer to an optimal deal.
With an entire sales team using a CPQ solution, and sharing winning proposals and pricing/product configurations by default, each proposal you send over time gets better and better at leading a customer to an optimal deal. Which means your CPQ system is, in effect, “guiding” this part of the “selling.”
CPQ does not equal guided selling…
But… CPQ on its own does not equal guided selling as there are many steps in every sales process before a quote is sent. But CPQ + CRM is a whole different story as almost all of those “many steps” are taken within your CRM system: list building, prospecting emails and phone calls, webinars, etc.
So when you add CPQ to CRM you have all the tech you need for guided selling. And guided selling means a faster path to a win-win for you and your customers. Which means, currently, the best definition of CPQ is that it’s a critical part of the guided selling process, and central to success in getting more quotes signed.