Table of Content

Salesforce CPQ (Configure, Price Quote): How Does It Work?

Salesforce CPQ

Sales teams deal with a host of arduous quotation-related tasks, particularly if we're talking of companies offering complex, highly customizable products/services or big firms with tremendous catalogs. Firstly, selecting the right products or configuring compatible bundles. Secondly, taking into account various markdowns and special partnership terms when calculating the price. Thirdly, compiling clear and error-free quotes. And all of that as fast as possible because prospects don't wait for long.

Let's also imagine the workflow itself. Often, sales reps deal with numerous spreadsheets, price lists, and auxiliary tools literally scattered around. Then, even the most meticulous sales managers make or overlook mistakes that inevitably tarnish the business's image.

Salesforce CPQ is the solution to greatly automate the configure-price-quote part of the sales process, leading to improved team performance and faster sales cycles. Let's discuss the Salesforce CPQ definition and the benefits the Configure Price Quote Salesforce tool gives sales departments, businesses, and customers. We’ll talk about boosting sales productivity with CPQ cloud, among other things. Also, we'll cover the features it provides and the implementation peculiarities.

1. What Is Salesforce CPQ?

Configure Price Quote software is a feature-rich tool designed to streamline these core yet laborious sales processes: configuring, pricing, quoting, approvals, contract renewals, and more.There are other CPQ products for high tech on the market, but if your org handles customer relationship management tasks in Salesforce, its CPQ might be the best-fitting option. Here's why:

  • As a Sales Cloud product, it's part of the Salesforce ecosystem. This means that much of the needed product and customer data is already here and in standardized formats. Another plus is the learning curve, which is less steep in a familiar environment. Besides, there's no need to constantly switch between apps since all is in one place.
  • CPQ expands Salesforce's capabilities beyond standard objects like Product, Pricebook, and Opportunity. Thanks to several dozen custom objects and complex logic, CPQ Salesforce makes it possible to accelerate and enhance the creation of highly sophisticated quotes.
  • It's a cloud-hosted solution, making CPQ SFDC easily accessible from any place and device, be it a laptop or smartphone.
  • Salesforce CPQ can be quite easily integrated with ERPs, accounting tools, and other systems since it's a world-renowned product.
  • The Configure Price Quote application is reinforced by . For instance, it aids with personalized pricing and product recommendations for up- and cross-selling. By analyzing historical data (customer profiles, purchasing history, and other interactions), CPQ makes more accurate discount, item, and product bundle suggestions. AI enhances CPQs' forecasting and analytics capabilities, pointing at trends, buying patterns, and sales opportunities.
  • CPQ software has a convenient graphical interface that can be customized according to one's preferences.

Some Sales Cloud editions have CPQ in a basic package. But if yours isn't, CPQ Salesforce will cost either $75 or $150 per user per month for the CPQ/CPQ+ solution, respectively.

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2. Salesforce CPQ Benefits

As several studies state, sales representatives spend just about on selling if employers don't give enough attention to automatization. A great deal of the time, salespeople are swamped with studying catalogs, generating documents, sending them for approval, and so forth.

At the same time, according to CPQ statistics by the management consulting firm McKinsey & Company, as much as are "highly automatable with today's technologies".

The data is quite eloquent. But take a closer look at the companies', employees', and clients' gains when a CPQ product is in place.

  • Expedited quote generation
    Without a doubt, a highly automated CPQ system creates documents far quicker than even the most seasoned sales manager could through manual processes. Actually, users report up to 10-fold faster quote generation after adopting the CPQ app for Salesforce.
  • Efficiently redistributed time
    With Salesforce CPQ, a sales team spends less time on grueling assignments like exploring product catalogs and price lists, searching for info in emails, checking with management on markdowns and special offers, and formatting quotation files. Therefore, staff can dedicate their freed-up time to direct work with leads, ultimately leading to increased sales.
  • Minimized quote errors
    When manual work with heaps of products and numbers is involved, no one is infallible. And even if your prospects believe the price or product configuration mistakes were inadvertent, it's still a technical hitch requiring extra moves and prolonging the sales cycle. In the CPQ process, if all the data and price/product rules are updated in a timely manner, you'll get accurate quotations each and every time.
  • Reduced sales cycles
    Since Salesforce CPQ facilitates not only quote configuring and compiling but also the approval process (accelerating it up to 20 times), the full cycle from the start to the closed deal can be .
  • Enhanced customer experience
    Prospects appreciate when they don't need to wait for days to get a proposition and start contemplating it. Salesforce CPQ allows a sales team to deliver correct, clear, and personalized quotes faster, including complex aftermarket configure-price-quote scenarios. This increases the loyalty of current and future customers.
  • Improved sales team's expertise
    Whether a person is a rookie in the org or a sales team member in a firm producing complex stuff, they still need to act like an expert when offering products/services and drafting proposals. Salesforce CPQ Software, with its Guided Selling feature and smart cross/upselling recommendations, helps neutralize the lack of tech knowledge.
  • Increased revenue
    Firstly, more leads convert into customers if sales reps manage to deliver and negotiate quotes faster than competitors. Secondly, CPQ facilitates upselling and cross-selling, resulting in more hefty deals.

3. How Does Salesforce CPQ Work? 

Now, let's explore the Configure, Price, and Quote components of Salesforce CPQ. Let's say you're a B2B seller of IoT hardware and software with an impressive assortment of customizable solutions. Here is what your configure-price-quote (CPQ) workflow may look like with CPQ in Salesforce.

3.1 Configure

Salesforce Configure

This part of CPQ assists in selecting the right products or services and compatible spare parts or consumables to be offered to a particular prospect. Salesforce CPQ specialists program the system to guide a sales rep through the whole inventory to items exactly matching customers' demands.

With CPQ solutions, the likelihood of wrong pics and potentially faulty bundles is minimized because of well-thought-out product rules imposed by experts. As a result, the configuring part is possible without constant consultations with technical departments. This standardized workflow saves the whole staff's time and allows them to concentrate on their direct tasks.

3.2 Price

Salesforce CPQ Price

The next core step in building the quote is pricing. The costs and discounts may depend on the batch size, current promotions, and terms for concrete partners (new customers, long-time partners, distributors, etc.). Besides, there are often several layers of markdowns applicable to the quote. Given all this, salespeople may easily overlook something and wind up having the wrong order summaries.

Apart from price books, sales teams can rely on CPQ's robust discounting logic. With flexible price rules, the whole calculation process for different cases (retail/wholesale sales, one-off/recurrent purchases, lease/subscription orders, and so on) becomes largely automated and super swift. Plus, right at the pricing stage, sales pres can send special discount offers for approval.

3.3 Quote

Salesforce CPQ Quote

Finally, the Salesforce CPQ solution greatly streamlines the creation of sales proposal documents. It turns quotes from the system into PDFs with exhaustive info on the products a prospect or customer would like to buy, the prices and applied discounts, contact details, terms and conditions, product specs, and other data, if needed.

CPQ contains various customizable templates so that one can modify quotation looks, content, and file format. Once the quote is ready, a sales representative can send it to a customer right from the Salesforce CPQ. It can be signed electronically.

4. Must-have Salesforce CPQ Features 

The Configure-Price-Quote Salesforce tool has numerous features to make effective CPQ task optimization possible. Below, we'll review five of them: Product and Price Rules, Guided Selling, Contract Amendments/Renewals, and CPQ Favorites.

4.1 Product Rules

Product Rules

Product and Price rules together are the crux of Salesforce CPQ. Product rules control, automate, and simplify item selection from the product catalog, eliminating incompatible combinations and prompting cross- and upselling opportunities. Usually, technical experts help to design product rules so that sales teams are prevented from/warned about wrong configurations and have the best options at hand.

4.2 Price Rules

Rules-based logic is a great helper when it comes to pricing methods, especially discounts. Applying values (static value/field value/summary variable) is automated; sales reps can easily set new rules on discounts with the required conditions or/and actions. As price rules (pertinent to a certain customer segment, order size, product configuration, time period, etc.) are triggered, CPQ dynamically updates quotes.

4.3 Guided Selling

Guided Selling

It's a sort of questionnaire: a set of preprogrammed questions to understand the customer needs, weed out irrelevant products, and leave only suitable ones. Surely, it takes some time to prepare questions and determine fitting options, but it's pretty much a one-off task for company experts and Salesforce admins, with minor updates as the catalog changes.

4.4 Contract Amendments

This feature allows amending contracts (adding or removing items, prolonging the contract duration, and so on) as per agreement with a customer in a more streamlined manner. Instead of making new contract records each time, sales reps can create amendment opportunities linked to the current contract. This way, all the amendments and updates are kept under one contract that hugely declutters the CRM.

4.5 CPQ Favorites

This small yet very helpful feature allows sales reps to save the most sought-after products and have instant access to them when compiling a new quote. The thing is that it works not only for individual items but for product bundles and quote line groups, so there's no need to search popular articles and add them one by one over and over again.

5. Do You Need a Salesforce CPQ?

Having listed multiple features and benefits of Salesforce CPQ, we also need to discuss whether this tool is the name of the game for each and every sales team. Well, of course not. There are cases when CPQ software is rather a redundant sales tool:

  • Small businesses. Since the product/service selection is quite narrow and the customer base isn't large, there's no need for such an advanced level of sales cycle optimization.
  • No complex products. If what you sell isn't customizable, then there's no point in opting for such a sophisticated tool.
  • A straightforward sales process. If your brand doesn't have a multi-tier pricing and discounting strategy, most of the Salesforce CPQ features will remain unused.
  • A limited budget. Salesforce CPQ is already quite an investment for smaller businesses, but you'll also need to allocate some money to system implementation and maintenance.
  • Not Salesforce CRM clients. If you don't use it, mull over either switching to it to unify and standardize sales workflows or give another CPQ tool a go.

In other situations, do consider Salesforce CPQ. It's widely applicable across industries, from manufacturing to software development, from logistics to marketing, from finance to healthcare. Whether you need dynamic adjustments or the ability to customize your Salesforce tiered pricing, Salesforce CPQ is the versatile solution you need. Here are issues signifying an acute need to introduce a powerful sales automation tool.

  • It takes too much time to compile quotes. For instance, you promise to get back with a quote within 24/48 hours after a lead leaves a request. Or you run an enticing promo campaign that provokes a ton of quote requests. If sales people frequently miss quote deadlines or can't process the messages they receive fast enough, you risk losing prospective customers.
  • Errors in quotes are common. Incorrect models, incompatible parts, or the absence of promised discounts at least create unpleasant setbacks in the sales process and quote reworks and, at most, break deals.
  • Sales reps lack product expertise. They may still draft passable proposals but often overlook cross/upselling opportunities and can't be convincing enough for leads during negotiations. It results in a subpar customer experience, smaller order value, and frustration in the sales team itself.

6. Salesforce CPQ Implementation Guide & Challenges

At this point, you may feel that Salesforce CPQ software solutions are worthwhile for your business, so let's talk about deployment peculiarities and possible complications. It's sort of a scheme conveying core parts of the CPQ implementation process.

6.1 Five-step Salesforce CPQ Deployment

Here, we'll briefly outline the process of implementing Salesforce Configure Price Quote (CPQ) so that you can plan switching to this software with more certainty.

  • Step 1: determine your KPIs
    Before moving a sales team to new CPQ software, analyze the current sales performance and think of the goals. Ideally, set measurable ones like "The sales cycle reduction by X%", "AOV growth by $X", or "Sales win rate increase by X%" by the end of the year, in 6 months, etc. Take the implementation and staff learning stages into account since it will take months, and there will most likely be dips in sales productivity during this period.
  • Step 2: gather a dream team
    If you don't have Salesforce pros on board, turn to a specialized agency like Onilab . We'll lead the process and ensure it's plain sailing from the requirements analysis to the data transfer, configuration, final tests, and deployment.
  • Step 3: take care of the data
    Think of external and internal systems it would be beneficial to connect to CPQ apart from your CRM and ERP. Then, Salesforce developers will take care of any technical tasks, including various integrations, safe data transmission, and manual data entry.
  • Step 4: configure CPQ
    Together with CPQ software developers, you can customize the tool to suit unique business needs and expand the feature set. This stage may include integrating third-party functionality (electronic sign, email services, etc.), setting complex product/price rules and the guided selling feature, as well as custom coding.
  • Step 5: educate employees
    The efficiency of your sales department correlates with how the onboarding stage is handled. Apart from educational materials provided by Salesforce, there can be a couple more options. For instance, it can be training organized by a Salesforce dev agency or using tools for interactive learning directly in CPQ as sales reps do their tasks.

6.2 Salesforce CPQ Challenges

Salesforce CPQ Challenges

Finally, we should touch upon what it's like to be in the middle of a migration to Salesforce CPQ. To facilitate sales quote-making, improve your sales pipeline, and provoke revenue growth with CPQ, you'll need patience and professional support.

  • Time and money
    CPQ is deemed a low-code tool, meaning that a basic setup and day-to-day usage are possible without software engineering skills. Nevertheless, business objectives often require configuring, integrating, and customizing CPQ on an advanced level, which is achievable only by hiring Salesforce experts. In this case, add the development costs to the Salesforce CPQ subscription price. When it comes to the time frame, it may take up to several months, depending on the work scope and the size of the team involved. Contact our team to get an assessment.
  • Data processing
    Data is the lifeblood of all business processes, including sales. During such epic changes as a new CPQ adoption, data itself and intricate object dependencies are particularly vulnerable. Utilizing a data loader without extensive experience in data migration might be risky. The safest option is to have a dev team manage the task and simultaneously prevent data loss and preserve interconnections between data bits.
  • Learning curve
    Finally, staff training is also a kind of challenge because you need to allocate time and devise a strategy for effective learning. It's undesirable to skip the onboarding part: Salesforce CPQ is feature-rich, so it's not as intuitive as an average sales rep would like it to be.

CPQ in Salesforce: Wrapping Up

Sales optimization and automation with Salesforce CPQ aren't simple tasks, and sure enough, they won't boost sales effectiveness within a fortnight or so. It'll happen over time with monotonous workflows streamlined, the error amount dropped, and sales professionals spending more time communicating with leads and customers. That's how Salesforce CPQ works if installed right. Contact the Onilab dev team to implement Salesforce CPQ properly.

Frequently Asked Questions about CPQ Salesforce

What does CPQ stand for in Salesforce?

CPQ stands for "Configure Price Quote", and it's one of the must-have tools in Salesforce's Sales Cloud platform for automating the entire process of creating quotes. CPQ tools help free up salesperson's time and produce accurate quotes.

With CPQ commerce, salespeople don't confuse product features when assembling a product bundle; they can rely on preprogrammed bulk pricing, subscription pricing, and discounting rules; they're sure each quote line is correct and matches what customers ask for; gaining approvals is accelerated, too. For sales leaders, utilizing Salesforce CPQ means fewer one-off sales and more regular customers.

What are the key features of Salesforce CPQ?

A full Salesforce CPQ overview may take ages because each Salesforce CPQ feature is somewhat useful. But among the top 10 features, we'd name Product and Pricing Rules as well as Guided Selling.

They contribute the most to a streamlined quoting process. First, it's guaranteed quote accuracy when it comes to picking items from a product catalog of any size. Second, accurate pricing in every complex quote: rules prompt where there has to be a regular price and where there are any discounts.

Is Salesforce CPQ worth it?

Accurate quotes made quickly are a desire of any firm, aren't they? For sales organizations or companies producing customized products, it's often a problem because of complex configurations and multitiered pricing.

If one quote line has an error, the entire quote may be wrong, to the customers' discontent. It hinders the selling process, disrupting the final stages of a sales cycle and preventing your org from closing more deals. An automated, standardized process for delivering quotes helps meet client requirements and do so faster, leading to higher customer satisfaction.

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