The CPQ process is more extensive than most people realize, meaning it goes beyond “configure, price, quote.”
Let’s look at the ten aspects of the CPQ sales process!
Configuration
The first step is for users to configure their product.
In this article, I’ve used cars, skateboards, and computers as examples of products consumers can customize.
In reality, there are numerous customizable products!
The CPQ process begins with this customization so production and sales teams understand how to move forward.
Price
The second step is to determine pricing or cost.
Figuring out pricing could mean figuring out how much a customer will pay for a product or how much it costs to produce it.
Pricing and costing are essential aspects of CPQ processes since they heavily influence each other.
For instance, a company must follow pricing rules to ensure they’re making a profit.
Quote
The next step is sending the consumer the quote for the product.
In some instances, quotes are negotiable.
However, for other products, the price is the price!
CPQ software ensures customers receive their quotes quickly.
Proposal
The proposal step is similar to the quote stage but more detailed.
A proposal includes the following aspects:
- Information about the product
- Terms and conditions
- Payment plans (if applicable)
- Details about warranties and services
Companies usually send proposals to customers if they’re making big purchases or for long-term agreements with a company.
Negotiation
For some products, customers can negotiate quotes and proposals.
Negotiating happens when customers have room to ask for discounts or other incentives.
Typically, a company is more willing to offer discounts and incentives to long-term customers or bulk orders.
CPQ software can help with negotiations since sales reps have access to the product configuration during their conversations with a customer.
Approval
An integral step in the CPQ process is getting the customer to agree on a quote or proposal!
The customer’s decision must go up for approval from an authority within the company.
For instance, approving a large order could require approval from upper management.
CPQ solutions also help here since they can provide visibility into contracts and approvals.
Order
If the customer agrees to a quote or proposal, the next step is for them to place an order.
The order should include all of the details about the product and payment.
For instance, if you’re purchasing a car, your order would include the following information:
- Color
- Model number
- Types of wheels
- Interior material
- Technological additions
- Any customizations
Production
The process continues with the production stage.
At this stage, a company delegates manufacturing to a third party or handles it themselves.
Either way, a customer’s product is finally made at this stage!
Delivery
Once the product is manufactured, it’s ready to be shipped.
Delivery is a crucial step since customers expect to receive their products promptly.
A CPQ tool can help the delivery stage by providing visibility into order statuses and tracking information.
Installation
The final step in the CPQ process is only applicable to some products.
Installing products for the customer is more critical than some businesses realize.
Proper and timely installation can differentiate between loyal and dissatisfied customers.
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