CPQ configurator – what it is and what are its benefits
CPQ stands for Configure, Price and Quote, or “configure, price, and generate a quote.”
It’s a tool used to automate the process of quoting and selling products. The CPQ configurator calculates the product’s price in real-time and generates a detailed quote.
This tool ensures that the configuration is always valid and correct in all aspects, both technical and commercial.
The buying journey is thus more efficient and personalized, providing the customer with a clear view of costs and available options.
What it is and how it works?
It is a software that simplifies the sale and configuration of products with many customisation possibilities. The user can see the final price change in real time as they adjust the product’s features, such as color, material, or accessories. Each time the user changes something in the product to be configured, such as color, material, adding or removing accessories, the final price updates. The CPQ system automatically calculates the price and creates an accurate quote to show customers, as well as the related datasheet. In addition, the system makes sure that valid and saleable configurations are always generated.
The operation is made to be simple and intuitive so that it is possible to offer a personalized service by meeting the expectations of the end customer:
- the user chooses from the various options and customizations available;
- the CPQ system calculates the price of the product or service by generating the quote, taking into account any discounts, special conditions, business rules and regulations;
- the CPQ can also generate: technical specifications, images, and sales conditions, export a bill of materials file, and write the order into the company’s management system.
Specific features will depend on the specific implementation of the software. In any case, they are aimed at optimizing and simplifying the sale of the product and/or service.
Why use CPQ software and its benefits?
Configuring a product can be a challenge for vendors, as the final price depends on many factors, such as materials, colors, combinations, and promotions. In addition, it is necessary to ensure that the product is technically sound and conforms to the customer’s needs. To simplify this process, there is the CPQ system, which allows you to:
- keep track of prices and automate the calculation;
- obtain consistently correct and valid configurations;
- quickly propose an accurate quote;
- avoid both technical and pricing errors.
The advantages of CPQ software
Using a CPQ in the product configurator offers numerous advantages during the sales process, including:
- speed, the quote is processed quickly, thanks to the automatic calculation of prices based on the options chosen by the customer;
- accuracy, the quote is always:
- up-to-date and correct, as the system modifies prices when options or promotions change;
- accurate and following their choices of the configured product;
- efficiency, by eliminating repetitive operations, business productivity increases;
- sustainability, by reducing the use of paper, you help protect the environment.
Exploiting the potential of CPQ software
The software is an excellent ally for companies that want to improve the effectiveness and support the operation of the sales department.
Development can vary according to customer requirements, although today the most popular solution is web-based configuration. Such a solution allows the end user to access the software without installing it and to be able to keep the platform always updated and available thanks to the Cloud.
In cases where there are products:
- extremely variable, e.g., with many materials and colours or accessories and with continuous updates;
- where some accuracies and details require graphic representation, e.g., the correct positioning of strapping for pallet security;
- with great graphic appeal.
a dynamic 3D is chosen to be included in the CPQ that can fulfil these needs.
Technical product configurator and commercial configurator
There are different types of product configurator, depending on the needs of the company that uses it. The two most common types are divided into two macro-categories: technical and commercial.
Technical Configurator
It is designed for industrial or B2B companies that need to configure complex machinery or large batches of products. The main purpose of such tools is to manage selection processes and generate a correct bid.
Some examples of technical CPQ configurators:
Commercial configurator
It is suitable for those who sell to the end consumer, such as e-commerce. For a B2C company that has a large product catalogue with various customization options, the product configurator plays a key role. The main purpose is to manage the complexity of product configuration through an appealing tool that is easy to use for the end user aimed at sales.
Here are some examples of commercial CPQ Configurator:
