Top 7 Questions to Ask When Selecting a CPQ Vendor
While there are many configure price quote (CPQ) tools in the market, not all are the same. So how do you differentiate? By gathering the best, most precise information at the qualification stage that will enable you to find the right fit for your business. But you can only do this by asking the right questions.
In this post, we’ll outline those questions you need to ask — and why.
What Is CPQ?
Essentially, Configure Price Quote (CPQ) software accelerates the quoting process by enabling sales teams to quickly configure, price and quote the perfect solution for any customer in minutes. CPQ is the key technology for profitable growth. Here’s what it looks like broken down:
- Configure: The C in CPQ allows for the configuration–customization–of your products to happen quickly and efficiently. It is especially important when products are complex or there are many SKUs to consider for a product bundle. The configure functionality helps to optimize and accelerate the configuration process and enables salespeople to create complex, zero-error configurations in minutes.
- Price: The P in CPQ refers to the activity of pricing individual items, packages, services and products. This ability is especially helpful for complex and tier-based pricing strategies. The pricing component of a CPQ tool can assure the best pricing is made available for every quote.
- Quote: The Q in CPQ helps your team deliver professional, organized, personalized quotes quickly. After all, it’s 50 percent more likely that the vendor who responds first wins the deal.
Does My Company Need a CPQ Solution?
Before we dive into the questions you should ask potential CPQ vendors, you might be asking yourself: Does my company even need CPQ?
The short answer is: yes.
Why? Every forward looking, growth-oriented company needs to move away from manual, error-prone process to an accelerated, consistent, personalized one. Because Smart Configure Price Quote (CPQ) software can empower sales organizations to deliver value from the moment the quoting process begins throughout the entirety of the customer relationship.
It does so by:
- Providing omnichannel, data-driven selling
- Driving sales intelligence and acceleration in your business
- Delivering personalization and value from quote-to-cash to renewal
In short, this means that B2B companies can offer the most relevant and personalized offers in real-time using AI-based insights to capture every available dollar.
Questions to Ask When Selecting a CPQ Vendor
Now that you know 1. What CPQ is and, 2. Why you need it, here are the questions you should ask potential vendors to see if they’re the right fit for your business.
1. Is your solution powered by AI?
Be sure to invest in an AI-powered CPQ solution that:
- Is easy to understand: This will ensure you can onboard your team quickly.
- Is automatic to update: That way, you don’t have to manually update the software or be privy to when changes are happening.
- Implements machine learning feedback: This ensures your recommendations don’t get stagnant and outdated over the long run.
The right vendor’s AI-powered CPQ solution should be able to:
- Learn to identify differences and changes in things like your customer's business and market conditions — and then adapt.
- Allow anyone on the sales team to create complex, error-free configurations for any product and for any customer.
- Provide price recommendations to accelerate close rates without leaking revenue or margin.
2. Do you offer hybrid CPQ architecture?
Whereas native architecture is purpose-built for a specific CRM — meaning it can’t be used with any other CRM — hybrid architecture can work with any CRM or ERP solution. Hybrid CPQ solutions mean you don’t have to sink costs and time into reinvesting and re-implementing different platforms in different regions.
3. Do you offer a flexible product catalog?
You’ll need a tool that provides a digital catalog with intuitive, guided-selling questionnaires. This will ensure salespeople can easily find the right products, even if your business handles tens of thousands of SKUs. Which brings us to our next question…
4. Can your solution support more than 1,000 line items?
With some CP Q tools, the more products and services you add to the overall quote, the more the tool’s performance suffers. Therefore, it’s important you ask potential vendors if their solution can create and manage quotes, bids, and RFPs efficiently — even those with thousands of line items. When testing the tool yourself, check the responsiveness of the quote as you add more and more products. Notice a slowdown? Then it’s onto the next vendor; you want to make sure the CPQ vendor you choose doesn’t hinder your sales team in any way.
5. Do you support cross-channel collaboration?
Here are some additional questions you can ask to ensure the CPQ solution in question provides the level of integration your business needs to support cross-channel harmonization and collaboration:
- Can you integrate into eCommerce solutions to enable end buyers with the same capabilities as sales teams?
- Does the CPQ tool limit the provision of certain capabilities to the eCommerce channel?
- Can salespeople see which products their buyers are configuring?
- Can reps modify the price of the items in the buyer’s basket and finish placing the order on behalf of the customer?
6. Do you have a constraints-based configuration engine?
If you have products which require some level of configuration — or if you’re planning on offering products in the future that will — a CPQ solution that has a constraints-based configuration engine will make the administration of your configuration rules so much simpler.
7. Do you offer advanced visualization capabilities?
Multiple visualization and configuration techniques (2D, 3D) make it easy to configure the most complex products. It also provides an immersive way for customers to engage with your products and services.
The Right CPQ Vendor Should Also Be Your Partner
Seeing as success in the digital economy hinges on a sales experience that is quick, easy and personalized, a CPQ solutions’ ability to increase sales productivity while accelerating sales velocity is essential.
Make sure the CPQ vendor you choose can keep up with the scale, speed, and flexibility your sales teams need to put together and manage large quotes and RFPs. Also it is worth asking the vendor about their product development. How has the solution changed? What innovations have been introduced? You want to work with a partner that is demonstrably invested in the segment long-term.
Consider your potential vendors very carefully, ensuring that they have all the critical features your business requires. Also make sure that they won’t simply customize their solution to your business needs and turn it over, but that they’ll serve as your partner as your organization grows and changes. One way you can do this is by engaging fully in any RFP process so you know you're making the best choice.
PROS is a leading Profit Optimization Software with an industry-leading CPQ component. The PROS Smart Configure Price Quote Platform:
- Is powered by AI and machine learning algorithms
- Offers an omnichannel selling experience backed by meaningful insights
- Fuels stronger sales execution and growth
Ready to learn more? Contact PROS today to learn how our CPQ solution can supercharge your sales efforts.
About PROS: (NYSE:PRO) PROS is one of the best kept secrets for profitable growth. For over 35 years, we have been uniquely positioned in the tech industry offering the world’s only AI based platform that helps businesses grow their margins and revenues. With more than 20 patented AI algorithms and 30+ million AI models, the PROS Platform is powered by advanced AI science that continuously delivers actionable insights based on the unique conditions of every buying engagement. These insights give companies more visibility into market volatility and allow them to rapidly adjust prices and quotes in response to real-time market shifts, feeding daily decision making and supporting longer-term business strategy and profitability. PROS AI is the driving force in updating more than 400 million prices and 1.7 billion forecasts daily in more than 30 industries around the globe.