What is the difference between CRM and CPQ?

CRM is customer relationship management, while CPQ stands for configure price quote. CRM solutions manage all aspects of customer interactions, from landing new leads to converting them into paying customers. CPQ solutions handle the process of configuring and generating price quotes for products and services.

Why should you use CPQ?

CPQ eliminates the need to generate price quotes for every transaction manually. With the help of automation, you can generate contracts and quotes to boost your chances of closing deals faster. CPQ solutions also ensure that every quote you send has a consistent, professional layout.

Why combine CPQ and contract management?

Combining CPQ and contract management helps you maintain a seamless sales cycle between acquiring leads and converting them into customers. After generating the quote for the customer, they can review it and make changes. If everyone is on the same page, you can now draft and sign a legally binding agreement using a contract management solution.

CPQ Features, What are Essential CPQ Features

CPQ software makes it possible to deliver price quotes instantly for clients to choose your products or services.

With the help of features such as quote managers and advanced reporting, you can configure your bid faster and tailor your pricing to beat competitors.

But what CPQ features does your business need for better quoting? How do they improve your bid and standardize your pricing?

This article will discuss all the must-have CPQ features for businesses. We’ll also cover how to integrate them with your ERP/CRM solution.

Key takeaways

CPQ software makes it possible to tailor your quotes and pricing to meet the specific needs of potential customers.
You can use guided selling to customize product options and recommendations to customer’s needs.
Contracted pricing and multi-dimensional quotes help you estimate the value of deals for returning customers and bulk renewals.
Feature-laden CPQ solutions automates your quoting process and increases the accuracy of generated quotes.

How can CPQ software help you?

CPQ solutions come with features that make it possible to automate processes like manual pricing, product configurations, and quote generation.

As a result, business owners and sales reps can send out price quotes and close deals faster.

Automated pricing solutions assist in standardizing pricing, which could be the deciding factor for maximizing the value and profitability of deals.

For recurring deals, CPQ software can also handle subscriptions, approvals, and renewals.

This guarantees that customers will receive renewal notifications at the end of every cycle.

In addition, you can store your standardized quotes on the sales cloud for faster retrieval with the help of advanced search filters.

Also, using CPQ software provides you with a dashboard containing all the key metrics that will provide insights into customizing quotes.

You can also integrate CPQ software with other CRM solutions to gain a centralized view of quote performance and user metrics.

This also helps you connect with solutions like Salesforce CPQ and PandaDoc.

CPQ solutions can also improve customer experience by using accurate quotes and complex product recommendations through guided selling, upselling, and targeted cross-selling.

What are essential CPQ features?

Every CPQ solution has myriad functionalities, but we’ve narrowed down the list to the most important ones to guarantee faster negotiations and higher close rates. Let’s discuss them.

1. Favorites

This is one of the default Salesforce CPQ features that allow users to add products as “Favorites.”

For instance, you can configure a quote line group once and add it to your favorites section in order to retrieve and reuse it for future projects.

2. Guided selling

Guided selling involves the use of recommendations to improve quotes based on the customers’ needs.

As the potential customer responds to a questionnaire, the info will help the sales rep display relevant product options from the catalog.

Sometimes, the guided selling feature pops up automatically once the customer opens the product catalog. This increases the chances of the lead converting to a paying client.

Retail and e-commerce companies with large product catalogs can use product search filters to improve discoverability and reduce the time needed to retrieve products.

The search filter either uses a single name or provides multiple fields for specifying key search parameters.

The more available search variables, the faster the sales process.

4. Quote line groups

With quote line groups, you can add multiple products to a single category and apply a universal parameter to them.

For instance, if you want to give a quote to a customer looking to have cups delivered to multiple locations, you can add all the items into a single quote line group.

5. Twin fields

Twin fields are custom field pairs with the same name and value.

Changes to one field reflect on the other as long as the person making the changes has all the necessary permissions.

Admins and sales reps can apply twin fields to map data from quote line records to subscription records and other fields.

6. Contracted pricing

Contracted pricing refers to the agreed-upon monetary value of every deal or contract.

This serves as a marker for recurring sales and subscription renewals.

Let’s say you have a product with an original price of $100, but the sales rep reaches an agreement with the customer for $110 (the contracted price). When creating future quotes, the CPQ solution will retrieve the contracted price ($110, not $100) instead of the original price in the updated catalog.

7. Contract and price management

The terms of contracts and the prices of goods change constantly, depending on the deal size.

So, your quotes need to reflect up-to-date terms and amendments.

You need automated contract renewals to change the terms of deals throughout the catalog.

This solution will also notify existing customers about price changes in the quote line as well as handle renewals.

8. MDQ (multi-dimensional quoting)

MDQ refers to the process of factoring several variables and dimensions to generate a quote.

No need to do the math because the API will give you the precise cost instantly.

One common use case for MDQ is available in the “pay per user per month” subscription model.

Let’s say the price of one subscriber is $5 per month. Adding more users for a yearly subscription will automatically multiply the quote pricing by a factor of the users and the number of months. So, 10 users will be $600 ($10*5*12) annually without special discounts.

9. Quote manager and generator

You need a feature that lets you generate quotes automatically using the values in the input fields.

This means that the quote generator will extract vital information such as names, addresses, unit pricing, fixed costs, and contract terms to generate a personalized quote.

You can use the generated quote template to create customizable quotes that require minimal editing.

10. Summary variables

CPQ solutions can summarize all the inputs of number fields into one object called the summary variable — which you can add to price actions, quote terms, and other fields.

For instance, you can create a summary variable for the number of charges to add to a quote for smartphones.

The CPQ software will extract the number of phones and calculate the corresponding number of chargers needed.

11. Dashboard and reporting

Analytics is the lifeblood of every CPQ software due to the unprecedented data volumes that can be collected and synthesized.

That’s why CPQ solutions contain centralized dashboards with multiple views for analysis and reporting.

These analytical tools will help you measure churn and conversion, customer satisfaction, and other valuable metrics.

From these insights, you can improve your quote generation process and buyer experience to close more deals.

12. CRM/ERP integration

Salespeople and marketers work with numerous ERP/CRM solutions, which scatter data across multiple platforms.

To unify all information into a single source of truth, CPQ solutions support integration with tools such as HubSpot and Salesforce, as well as payment solutions such as PayPal and Stripe.

13. Product and price rules

Sales reps can use product rules to configure quotes to ensure the automated values are accurate.

The four main rules are validation, selection, alert, and filter.

This feature also comes with filters for searching through the catalog instantly.

And it comes with an error detection mechanism to prevent bundling and ensure calculations are on point.

Price rules are similar to product rules, with the key difference being that you can configure the pricing rules to apply to a catalog of products.

For instance, you can apply a 5% discount for all quotes containing a specific product offering.

This rule will override all existing discounts for that same product at the single product level.

14. Artificial intelligence and virtual assistants

AI-powered CPQ software can help businesses generate and analyze quotes faster by scouring through mountains of historical data in seconds.

This improves the accuracy of product recommendations, as well as guided selling and cross-selling efforts.

With the help of AI algorithms, you can implement dynamic pricing and get guidance on implementing competitive discounts.

15. Security protocols

Sensitive business data flows between the sales team and customers.

That’s why you need to ensure airtight security around your CPQ system.

The ground-level feature to ensure security is user permissions; this specifies who can read or edit fields.

You can also add audit trails, multi-factor authentication, and single sign-on on the user level.

16. Mobile compatibility

This is not a feature in the standard sense, but cloud-based CPQ solutions allow users to make changes from any device, including tablets and smartphones.

This makes it easier for sales reps to close deals on the go.

How businesses use CPQ solutions to close deals faster

PandaDoc’s CPQ software speeds up sales cycles by providing custom quoting and invoicing.

You can also access and edit other templates for personalized sales quotes.

The embeddable payment systems will also motivate potential clients to renew or close deals faster.

To find out more about PandaDoc’s CPQ software, visit the learning academy or book a demo.

Frequently asked questions

The CPQ process is a three-step process that involves configuring a product, calculating its price, and generating a quote for the customer. This quoting process also covers price management, MDQ (multi-dimensional quoting), and bundling.
CRM is customer relationship management, while CPQ stands for configure price quote. CRM solutions manage all aspects of customer interactions, from landing new leads to converting them into paying customers. CPQ solutions handle the process of configuring and generating price quotes for products and services.
CPQ eliminates the need to generate price quotes for every transaction manually. With the help of automation, you can generate contracts and quotes to boost your chances of closing deals faster. CPQ solutions also ensure that every quote you send has a consistent, professional layout.
Combining CPQ and contract management helps you maintain a seamless sales cycle between acquiring leads and converting them into customers. After generating the quote for the customer, they can review it and make changes. If everyone is on the same page, you can now draft and sign a legally binding agreement using a contract management solution.

Disclaimer

PandDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDocs services are governed by our Terms of Use and Privacy Policy.