What is CPQ, and when does it pay off?

You sell products that are different almost every time: another size, another material, another option. Every quote takes time, and a wrong price or a combination that can't be built often only shows up in production. That is what CPQ is for.

CPQ in one sentence

CPQ stands for Configure, Price, Quote: software in which someone builds a product from options, rules check what is and isn't possible, the price is calculated automatically and a quote comes out straight away.

A good CPQ solution goes one step further. Once the customer agrees, it creates the order with the right bill of materials, routing and article codes, so nobody has to type the order into the ERP system again.

What goes wrong without CPQ

In the companies we talk to, we keep seeing the same patterns:

The knowledge sits in a few heads. Only two people know exactly which options go together. When they are on holiday, quoting stops.
Spreadsheets with old prices. Every salesperson has their own spreadsheet, and not everyone uses the latest version.
Errors only surface in the workshop. A combination that can't be built is sold anyway, and that later costs time, money and an unhappy customer.
Slow quotes lose orders. If you answer after a week you are often too late; the customer has already signed elsewhere.
Everything is entered twice. First in the quote, then again in the ERP, each time with a chance of a typo.

When does CPQ pay off?

If two or more of these sound familiar, CPQ is worth looking into:

Your product has many variants, sizes or options.
Making a quote takes more than an hour, or depends on one or two people.
You regularly find errors only in production.
Dealers, agents or representatives need to quote on their own.
You want customers to configure your product online, in your web shop or on your website.

To be fair: if you mainly sell standard catalogue products with few options, you probably don't need CPQ. A good price list or web shop is enough.

Where do you start?

Start small. Pick one product family that generates many quotes, and write down which questions you ask the customer and which rules apply: what goes with what, and what determines the price. That is the basis of the model. The link to your ERP and the roll-out to dealers or your website come afterwards.

With Qmaze, a first model like this is usually live within a few weeks. You can build it yourself after a short training, or we do it for you.