CPQ Requirements and Advanced Features

The CPQ abbreviation stands for Configure-Price-Quote. CPQ software enables businesses to create and share custom quotes with their customers quickly. The main goal of using CPQ software is to automate quoting processes to enhance the performance of sales managers.

Statistics say that roughly 83% of sales managers already utilize CPQ software, and the rate is expected to grow. On average, the usage of Configure-Price-Quote software helps reduce the number of errors by 40% and increase productivity by 33%. 

Let's dive deeper to discover how CPQ software works, what features it should have, and how to define a perfect feature set for your business in the post below.

BASIC FACTS ON CONFIGURE-PRICE-QUOTE SOFTWARE

The basic functionality of CPQ software enables sales managers to quickly generate new quotes, apply discounts, and update existing offers.

The quoting process is represented by three crucial stages that are:

• Configuration. A user configures a product variation by selecting all its features using a drag-and-drop interface. Inbuilt product validation features check if the chosen product variation is in stock.
• Price. A CPQ system automatically calculates the final price, including applied add-ons and discounts. 
• Quoting. A quote is created automatically and shared with a client. A quotation can have the form of a payment link or a document.

Indeed, creating and generating quotes is the primary functionality of a CPQ system. However, a large assortment of CPQ features may foresee the opportunity for sales managers to: 

• validate entered data
• check and apply personal discounts
• suggest products to upsell or cross-sell
• update offers sent to clients
• generate a visual representation of custom products
• create detailed reports

The two foremost types of CPQ systems are:

• Out-of-the-box. A system with a predefined set of features is provided by a vendor. Users cannot customize and upgrade out-of-the-box solutions.
• Custom-built. A well-tailored Configure-Price-Quote solution built by a software development company. Users can upgrade it and implement advanced CPQ features.

The most popular out-of-the-box CPQ solutions already presented on the market are as follows.

BASIC CPQ REQUIREMENTS AND COMPONENTS

Both custom-made and out-of-the-box solutions need businesses to provide their corporate identity. A brand book may imply a logo, defined brand colors, and rule corporate content composition rules. The information is used to make the interface of CPQ software and generated documents match corporate design rules.

A Configure-Price-Quote system should have a minimum required set of CPQ product features to streamline the workflows of sales managers, which is specified below.

Product Catalog

A database of products or services, along with their variations, enables sales managers to quickly select items using a drop-down list or a search bar. Also, the catalog should imply a list of add-ons for products/services.

Quote Configuration and Generation

Users enter information about an order manually or import it from a CRM. A CPQ system analyzes entered information and validates it to ensure that all the items are in-stock and can be delivered to a customer. It arranges all the information and generates a quotation as a payment link or a document.

User-Friendly Interface

Creating a visual interface with drag-and-drop functionality is advisable to enable users to quickly compose new quotes by adding new elements to a worksheet. Besides, a user-friendly interface should imply drop-downs, search bars, and pre-made templates.

Discount Management

Many types of discounts can be applied to engage clients to purchase. One of the basic CPQ requirements needs developers to enable the opportunity to apply promotional, custom, personal, or other types of discounts. In some cases, responsible managers should review and approve the application of discounts to offers.

Quote Management

Sales managers should be capable of managing created and shared quotes. Basic CPQ features should deliver the opportunity to review created documents. Also, users should be capable of updating existing quotes upon a need.

CRM Integration

It's not an obligatory CPQ feature, as a Configure-Price-Quote system can work as a standalone solution. However, the integration with a CRM eliminates the need for users to specify all the details about clients manually, which helps significantly improve productivity.

Being connected to a CRM, a price quoting system can fetch data about a customer and services/products requested to form new quotes automatically.

ADVANCED CPQ FEATURES

Advanced CPQ features help turn software with basic features into a top-tier solution for creating and sharing quotes to improve performance and customer satisfaction. 

Mobile Access

According to statistics, more than 60% of web traffic comes from mobile devices. Therefore, advanced CPQ product features should enable quotes to be displayed on mobile devices of different screen sizes, including tablets and smartphones.

Guided Selling

Guided selling is a set of step-by-step guides and suggestions that help managers quickly compose quotes. It eliminates the need for managers to explore user guides, seeking answers to their questions.

AI-Driven Recommendations

A Configure-Price-Quote system can help increase sales by using artificial intelligence (AI) algorithms to analyze real-time data and suggest items to upsell or cross-sell. AI can analyze large amounts of data and define hidden patterns to make data-baked decisions.

E-Signature Support

The e-Signature support is a CPQ feature that helps increase the offer acceptance time. Customers can rapidly review and sign new documents electronically to close deals fast.

Analytics and Reporting

A dashboard that collects crucial data and displays it in a user-friendly way can help executive managers to track any changes in monitored metrics, like sales volume or an average discount.

Advanced CPQ requirements need developers to enable the opportunity to analyze clients' activity to track different metrics, like the opening, churn, or quote approval rate.

Recurring Payments

A top-tier CPQ system can provide the opportunity for businesses to enable recurring payments to charge clients on a regular basis. Configure-Price-Quote systems integrated into sales pipelines can automatically configure different charges, create, and send quotes to customers regularly. Also, they need to be capable of updating and canceling the existing subscriptions.

Security and Data Protection

Many businesses have to comply with security requirements to keep their customers' personal information. User authentication management can be enabled by adopting the single sign-on (SSO).

Progressive CPQ features can foresee the opportunity to limit access to shared quotes. For instance, only verified customers can access received quotes to make personal offers inaccessible to the public. Alternatively, users can check received documents only when they sign the terms and conditions.

Visual Representation

Visuals help better present products and engage customers to make a purchase. CPQ systems with top-notch functionality can automatically pick images of configured products from a database and add them to composed documents.

Internationalization

Businesses that sell their products and services worldwide must ensure that customers from any country can interpret shared documents with quotes. Internationalization enables the automatic translation of documents, depending on the client's country.

CODEIT'S CPQ SOFTWARE DEVELOPMENT EXPERIENCE

CodeIT has broad experience in developing custom-made Configure-Price-Quote systems with many industry-leading CPQ features.

Project Description

Our team was provided with CPQ requirements to develop an innovative Configure-Price-Quote system. We were requested to develop a one-of-a-kind system because none of the available out-of-the-box solutions met the client's requirements. 

CPQ Features Developed

Our team of software engineers has analyzed CPQ requirements and developed all the requested features, including the following.

• Dashboard. It collects all the metrics about quotes in one place. All the data is collected and updated in live time without the need to refresh the application.
• Quote generator. Using the drag-and-drop interface, users can rapidly compose new quotes. The system automatically calculates options selected by users and forms custom quotes.
• Guided selling. Sales managers can compose documents in bulk and use pre-made templates to make new quotes fast and error-free.
• Approvals. Executive managers receive notifications about new documents they need to review and approve before sending them to clients. 
• Quote analytics. The system monitors crucial metrics and notifies users if it detects unforeseen or suspicious changes.
• Forecasting and planning. All the information about available resources is displayed to sales managers. Besides, the system can forecast the demand for certain resources by analyzing gathered data.
• CRM integration. The CPQ system can be connected with SalesForce and Microsoft 365 CRMs to fetch data about clients and establish automatic quote creation processes.

HOW TO DEFINE THE RIGHT SET OF FEATURES

Conducting a thorough analysis to understand what features should be developed to achieve maximum efficiency is advisable. We recommend taking the following actions:

• Access your company's needs to clearly understand what business goals you want to achieve by developing new CPQ software.
• Analyze existing processes to define how they can be improved and what manual activities can be automated to increase efficiency. 
• Define bottlenecks in sales pipelines to fix problems that prevent sales managers from achieving high-performing results.
• Check sales metrics to understand to define points of growth that can be accelerated by developing new software with advanced CPQ features. 
• Interview sales managers to collect feedback from experts who directly communicate with customers. Also, sales managers can share useful information on internal processes that should be improved.
• Define customers' needs to understand reasons that convince customers to choose one company over many competitors.

Create a list of the top features that will help you fix the most emerging problems and achieve the foremost business goals. Prioritize CPQ product features in your list to begin the development process by implementing the most crucial ones.

Also, it's advisable to develop the prototypes of CPQ features first and test them to ensure they help achieve positive results in a real-world environment. Features that successfully pass the testing stage can be polished and enriched to deliver an outstanding experience to users and clients.

WRAPPING UP

CPQ or Configure-Price-Quote is a digital system that helps companies automate sales pipelines by creating custom quotes fast and error-free. The main advantage of CPQ solutions is that they enable sales managers to rapidly compose personalized proposals or automatically generate usage-based quotes. 

There are many Configure-Price-Quote systems with different feature sets. The basic CPQ features are the following:

• product catalog
• quote configuration and generation
• user-friendly interface
• discount management
• CRM integration

A custom-made Configure-Price-Quote system can be enriched with a wide variety of high-end features, including the following:

• mobile access 
• guided selling
• AI-driven recommendations
• e-Signature support
• analytics and reporting
• recurring payments 
• security and data protection
• visual representation
• internationalization