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8 Most Frequently-Asked Questions About CPQ, Answered!

What is CPQ software? How is it supposed to speed up our sales cycle? Can it handle our increasingly complex, customizable products? We hear these same questions all the time, so we have brought you the answers. If you’d like to discuss any of them in increased detail, get in touch. We’d love to hear from you.

1. “What is CPQ software?”

Let’s start from the beginning, the very first question: ” What is CPQ software?” 

In short, CPQ (configure price quote) helps in the automation of product configuration, pricing, and quoting, so that you become able to sell more products, with fewer errors, faster.

Let’s go a little more into the CPQ process:

A customer comes at you with an issue they want to solve by purchasing one of your complex products. You have a huge product catalog with a multitude of options and dependencies, so getting the optimal product for that customer is difficult. 

It’s almost impossible for sales reps, especially the new ones, to optimize products for every single customer. Best case scenario – they keep working on what they know, leaving many customers only just satisfied. At worst – they make a very wrong configuration error or design a product that won’t be successful from an engineering point of view.

CPQ software has many product and pricing rules that control the configuration process. They ensure that a product is optimized for engineering efficiency, profitability, as well as customer satisfaction and that the right price is quoted every single time. Margins are protected and rogue discounting is eliminated.

Traditional CPQ software asks the team reps a series of questions about a customer and then picks out the right options as per their answers. A 3D product configurator software like KBMax enables visual product configuration where the sales reps or end-customers can interact with a visual representation of a product and then configure it in 3D (more on that below.)

Once the product gets configured, the online product configurator automatically generates a sales quote, usually in a PDF format, that is sent out to the customer. Sales reps don’t need to mess around with a lot of number processing in Excel. Instead, they can then get on with doing what they do best – selling.

2. “What is a visual CPQ platform? And do I require one?”

As we mentioned above, a visual CPQ tool allows users to configure products with an intuitive interface (a visual configurator) rather than just depending on the text. A visual product configurator might be in 2D with an Amazon-kind filtering system, or it could even be 3D with augmented and virtual reality abilities. 

If you operate in a very competitive industry that sells complex items, then providing a fully immersive purchasing experience is a huge differentiator. But more than that, it boosts buyer confidence and spending. 

As customers play around with different products on-screen, they wind up selling to themselves. They take their ownership, understand all possible configuration options, and feel really invested in all their purchasing decisions.

3. “How does CPQ work for the B2B eCommerce business?”

Today’s buyer expects to self-serve, which is why they want to do so from anywhere, any time, through any device. A few years ago, this wouldn’t have been possible. Because buyers are short on technical knowledge required to configure a product from beginning. 

Product and pricing rules built into your CPQ quote system mean that buyers no more need this knowledge. However, the complex and expensive your product, customers can now configure them independently, free from all the sales pressure and influence. 

With KBMax, you can embed your 3D visual product configurator right into your B2B eCommerce website. You can give your customers access to the same interactive configuration experience that the sales reps use behind the scenes. Once they  configure their product, they can instantly place their order.

4. “How will CPQ software speed up our sales cycle and improve our bottom line?”

Intelligent algorithms (product and pricing rules) built into your CPQ solution boost the profitability and customer satisfaction from a single transaction. Sub-optimal configurations as well as human errors get completely eliminated, which translates fewer delays, returns, chargebacks, and avail considerably happier and more loyal customers.

CPQ software simplifies and automates your sales process, giving space to your salespeople to spend more time closing new business and boosting profitable relationships. Reps have a comprehensive knowledge of your products on their fingertips and they  quickly become trusted for your customers.

5. “What impact CPQ has on engineering efficiency?”

CPQ software enables reps to configure the most sophisticated products without ever having to call on the expertise of the engineering department. Product rules coded into the backend make sure that every configuration is feasible from a technical perspective. 

With CPQ software, there’s no need for those rough sketches. All the required information gets captured up-front in a language that everybody understands. This gets rid of all the back-and-forths between the customers, managers, and engineering. Then there’s CAD and design automation too.

6. “What is CAD and design automation?”

KBMax differs from all other CPQ solutions on the market as it offers CAD and design automation for engineer-to-order products. This takes the engineering efficiency to all new level. 

Once the user – be it a sales rep or end-customer – has configured their product, KBMax automatically generates technical drawings through SolidWorks, AutoCAD, Autodesk Inventor, or PTC Creo, before sending them to engineering and then the shop floor. 

Finally, you can clear out the engineering bottlenecks and let the engineers focus on innovation rather than mundane, menial tasks.

7. “Can CPQ software handle complex products?”

That depends on the CPQ tool you are having at your disposal. KBMax is a CPQ vendor that can easily handle any complex product. It’s widely used throughout the biotech, high-tech, and vehicle manufacturing industries that are highly complex.

Fortunately, you don’t need to understand programming or technical terminology to benefit from the product and pricing rules in KBMax. Users build the rules by dragging the blocks around and putting them together to form logic statements with dropdowns, color-pickers, and buttons, making the job accessible to everyone.

Compex pricing strategies are similarly straightforward. You can layer the pricing rules and tools on your price lists. You can also copy and paste them from Excel straight into KBMax’s back-end. Sales reps can then override the automatic pricing calculations in line with user privileges with customized approval loops keep everything streamlined, manageable, and transparent.

8. “How would we go about implementing CPQ within our organization?”

These are the three CPQ implementation guidelines we advise our clients to take for widespread adoption and a smooth rollout:

  1. Assemble a strong, cross-functional team that has both technical and non-technical members. Have a sponsor who serves as the pivot. They should be responsible for managing the project, securing cross-departmental support, and also providing business context to the project manager and team.
  2. Your team needs to work together and identify your critical business driver.These will inform your choice of CPQ tool provider and your setup. Do you wish to reduce time-to-quote, increase deal size, promote market growth, improve the order accuracy, boost customer retention, or all of these above? Design for outcomes, not features.
  3. Post-implementation, you have to provide practical, role-specific training that can be broken down into easy parts. This gives your team the confidence they need to stick with the process as they come up against the inevitable challenges.

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Comment by ElenaGillbert on June 21, 2021 at 8:39am

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