What is Configure Price Quote? – A beginner’s guide for Manufacturing

Posted by Sabine Kempe on May 5, 2017 11:32:40 AM
Sabine Kempe
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In manufacturing, CPQ stands for Configure, Price and Quote. In this article, we want to help you understand which problems this software solution tackles and how your manufacturing business could benefit.

CPQ or Configure Price Quote software is a sales tool designed to help businesses produce accurately configured quotes for their complex products given a constantly changing collection of variables. In CPQ solutions, pricing, costing and business rules are centralised and automated. They are available in the cloud in real-time giving sales teams world wide the opportunity to sell only viable configurations (or solutions), at the right costs for the right price for every single customer and even lot size one. CPQ promises to increase revenue for all channels by creating accurate and professional sales quotes and tenders swiftly, while eliminating errors and inefficiencies.

C stands for Configure

In a manufacturing business, putting together a quote or tender offer is a time-consuming task that usually requires vast knowledge and resources. It entails considering hundreds of constantly changing cost factors, complex customer requirements, engineering restrictions and any upselling or additional relevant products and services to churn out a complete solution. Usually only very experienced sales reps can fulfil this task. The contribution of multiple other departments and experts is often required: be it engineering teams, tooling, production, purchasing or finance. Knowledge is combined in comprehensive Excel sheets and/or product catalogues to determine how complex products or solutions need to be configured. This is not only time-consuming but an error-prone process.

An industry-tailored CPQ solution centralizes all knowledge enables your sales teams and other channels to select the right products, in the right combination at the right time. Additional features such as Visual Product Finder, CAD integration and Sales Guidance will boost these effects and help sales teams to maximise profit whilst ensuring customer satisfaction.

P stands for Price (and Costing)

Pricing describes the part of the sales process includes adding up prices for BOMs that could include thousands of items and applying discounts on multiple levels. Further important factors are regional price lists, promotions, account pricing and in industries such as contract manufacturing considering price changes over year long contracts.

In manufacturing industries pricing is the smaller part compared to costing. Calculating the exact costs of configurable or Engineer-to-Order products, projects or solutions under consideration of real time production costs is a massive challenge for manufacturers. Features such as interactive costing, costing and pricing simulations or mass attribute changes are essential to protect margins in these cases.

Additionally, pricing or discount requests that require higher management approval may lengthen the sales cycle. A CPQ software with elaborate costing and pricing features that connects to all backend costing factors is highly relevant for manufacturers to guarantee that every quote will protect your margins and deliver the best price for your customer.

Q stands for Quote (or Tender)

Quoting is your final step towards the finish line. It ensures that all quotations are professional, complete. Imagine all the hard work you have put into creating a quote only for the end product to have copy-paste errors or missing information thus requiring reworks and lengthening an already painfully long sales process.

An industry-specialised CPQ solution provides a comprehensive content library, editable modules and templates to choose from, like customer letter, technical offer, commercial offer and product detail or CAD attachments. Following that, it offers you different file formats to export your quote to varies file formats, like Word, PDF or Excel, so you can always meet your customer’s requirements at the click of a button.


Now that you have a good overview of what exactly CPQ means, I can tell you that there is more: The icing on the Configure-Price-Quote cake would be a seamless integration into your manufacturing processes, backend data, CRM and E-Commerce platforms.  If that sounds interesting to you, sign up for our free trial and see how our CPQ works embedded into one unified Digital Sales Platform built for manufacturing businesses.

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Sabine Kempe

Written by Sabine Kempe

Sabine - a digital enthusiast at heart, she is dedicated to matching the challenges of manufacturing businesses with the opportunities of a digitalized world.

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