CPQ software

Definition of CPQ:

Configure Price Quote software, commonly known as CPQ, is a type of software that B2B sellers use to help quote complex and highly configurable products.

How does CPQ work?

The back-end is tasked with the support of complex processes that come with B2B e-commerce. These processes can be the individual pricing agreements set for each customer, country-specific pricing laws, the management of each order, and the ability to keep the data up-to-date in the ERP system. CPQ comes into play when a company has a complex product. In these cases, the CPQ pulls all the available product variants and displays them in the e-commerce platform. There, the buyers can select the variant that best suits their needs and the CPQ will generate the customized product with s price based on the specifications. CPQ works together with ERP and CRM. This allows standardization across a company where CPQ acts as a link between departments.

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What are the benefits of CPQ?

By implementing CPQ software into their systems, B2B sellers can expect to see many improvements in their online store’s performance. Using CPQ software results in a faster sales cycle because pricing and workflow are streamlined.

Quicker quotes

In B2B e-commerce, customers fall within categories set by the sellers. They might have a remaining credit balance, agreements for different pricing compared to the average customers or any other kind of special arrangements. All that would require more time to generate a custom quote for them. The use of CPQ can fulfill the requirements for a faster response from the seller’s side when it comes to individual quotes.

Accurate pricing

B2B orders are primarily placed in bulk. B2B customers expect specific pricing based on their agreements with sellers. A CPQ gets the data stored in ERP and displays the right prices for each customer. This minimizes the danger of having mispriced items, ensuring customer satisfaction

Customized experience

A B2B e-commerce platform needs to cater to customers with individual needs, expectations, and demands. A standardized shopping experience in terms of pricing or delivery, would not be helping personalize a customer’s experience. But a CPQ can create product catalogs for each customer. With a CPQ you are also able to display custom pricing directly on the website, instead of having customers wait for a quote from a sales representative.



What are the challenges of CPQ?

While having a CPQ software can be a great addition to your e-commerce platform, it can also be challenging.

Integration problems

CPQ works alongside a company’s ERP and CRM. This means that if the three systems aren’t integrated, you’d need to bring a third-party partner in to connect them. Before choosing your CPQ software provider, make sure if it is possible to connect it to your other existing systems.

Migration planning

Making a migration plan is a must when getting a CPQ. Without a transition plan in place, unforeseen issues can come up. To avoid these issues, the migration plan should include a testing phase, to spot as many problems as possible.

Processes are not clear

When first installing new software there’s a learning period, where the users have to get to know how to use the system. Not knowing how to use a new system can lead to many mistakes due to unclear instructions. When a business buys a CPQ software, they should make sure that they provide extensive training to the employees who will use it.



Why is CPQ important?

A CPQ can help reduce the time needed to process an order, provide customers with accurate quotes in a short time span, and even change the customer-facing section of the website based on the visitor. Combining this with an ERP system can provide a company with exceptional results and customer satisfaction. In an age where e-commerce is as customer-centric as never before so far, B2B e-commerce needs to follow this trend to keep up with the current trends.

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