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CONFIGURE,

PRICE, QUOTE
Solution Study

Insights, Landscape, & Vendor Analysis


CONFIGURE, PRICE, QUOTE
Solution Study

Table of Contents
1 Executive Summary 03

2 What is Configure, Price, Quote? 05

3 Benefits of CPQ 09

4 CPQ Deployment Lifecycle 12

5 Vendor Selection Criteria 17

6 CPQ Solutions Landscape 20

7 Analyst Bottom Line 24

Action Plan 25

Our Solution Study Methodology 36


About 37
CONFIGURE, PRICE, QUOTE
Solution Study

Executive Summary
CONFIGURE, PRICE, QUOTE (CPQ) SOLUTION STUDY 4

Executive Summary
Effective Sales Enablement is a multi-stage process.
This Solution Study covers:
In our Sales Enablement Solutions Study Series, we examine each key
stage of Sales Enablement, from initial marketing and sales alignment to
the final deal close and revenue capture. What is Configure, Price, Quote?
In this report, we focus on the critical sales function of Configure, Price,
Quote (CPQ) to provide marketers with a comprehensive understanding
of the CPQ landscape. Benefits of Configure, Price, Quote
If your organization is considering CPQ software, currently using a
CPQ system, or providing a CPQ product or service, this report will
provide you with fresh insights on the technology, strategies, and CPQ Deployment Lifecycle
vendor solutions.

Vendor Selection Criteria

CPQ Solutions Landscape

Action Plan
THE EVOLUTION OF SHOPPER MARKETING CONFIGURE, PRICE, QUOTE (CPQ) SOLUTION STUDY 5

CONFIGURE, PRICE, QUOTE


Solution Study

What is Configure, Price, Quote?


THE EVOLUTION OF SHOPPER MARKETING CONFIGURE, PRICE, QUOTE (CPQ) SOLUTION STUDY 6

What is Configure, Price, Quote?


Demand Metric defines Configure, Price and Quote (CPQ) as: FIGURE 1
Classic CPQ Solutions

Comprising the strategies, processes, technol-


Approval
ogies, and tools that support the organization’s Product
Pricing Engine Workflow
ability to effectively configure products/services Configurator
Management
from a set of options, price a customized solution
based on relevant internal and external factors, and
provide a digitally generated quote for customer Proposal
signature and payment. Classic CPQ
Management Quoting System
System Solutions

As the name implies, Configure, Price, Quote (CPQ) solutions provide


functionality to support complex sales transactions.

CPQ systems enable sales teams to custom design or configure a solu-


tion for a customer from different product sets, options, or piece parts;
price the solution appropriately; and prepare a quote for the customer in
a negotiated sales situation.

A typical CPQ system includes a design/configuration engine, pricing


engine, and quoting system driven by business rules or constraints,
supported by a proposal management system, and augmented by
approval workflow systems.
WHAT IS CONFIGURE, PRICE, QUOTE? CONFIGURE, PRICE, QUOTE (CPQ) SOLUTION STUDY 7

Primary industries that have heavily relied on CPQ systems include FIGURE 2
Manufacturing, Transportation, Telecom, High Tech, Healthcare, Retail, Modern CPQ Solutions
Insurance, and Financial Services.

Today, new solutions and cloud technology have enabled CPQ Product Contract, Order,
eSignature
systems to be used by small and mid-size companies in various Configurator, Pricing Proposal & Workflow
Compatibility
industries, including general Business Services, Real Estate, and System & Quoting Management
Media/Publishing.

Modern CPQ systems have moved way beyond the classic model of Product Modeling,
“Configure, Price, Quote” to offer an array of advances, including:
Quote-to-Cash Modern CPQ
Design &
Functionality Solutions Catalogues
Product design & modeling tools to extend configuration choices
Value pricing, modeling, & communication tools to enhance pricing
ROI and TOC calculators to optimize quoting Guided Selling & ROI/TCO
Value Pricing Tools
Contract management and guided selling to improve operations and
Sales Playbooks Calculators
sales performance

In short, these are not your father’s CPQ systems! We will detail the
range of standard, advanced, and specialized functions and features in
the Vendor Selection Criteria section of this report.
SALES ENABLEMENT
Roles Matrix

ROLES RESPONSIBILITIES PROCESSES TECHNOLOGY CONTENT METRICS

Revenue Accountability Budgeting & Planning CRM Thought Leadership Blog Revenue by Channel
Senior
Staffing & Channel Management Performance Reviews & QA Business Intelligence Webinar Presentations Customer Lifetime Value, NPS
Management
Reporting to CEO/Board Recruitment & Retention MRM Conference Keynotes Return on Customer (ROC)

New Product Development Product Launch Product Mgmt. System Data Sheets, Whitepapers Market Share, Profitability
Product
Create Sales Tools/Guides Win/Loss Analysis Enterprise Feedback/Survey Case Studies/Testimonials Brand Equity
Management
Messaging & Positioning Competitive Analysis Content Management Competitive Analysis Content Usage

Build Reports & Dashboards Sales Forecasting CRM Compensation Model % Quota Achieved
Sales Operations Monitor Sales Productivity Territory Management Proposal/CPQ TCO/ROI Calculators Sales Cost/Revenue Ratio
Data Management Sales Compensation Sales Content Portal Sales Playbooks Incentive vs. Quota Ratio

Build Reports & Dashboards Marketing Budget CRM & Marketing Automation Buyer Personas Sales Qualified Leads
Marketing
Marketing Systems Admin Campaign Analysis Analytics & B.I. Customer Journey Map Cost Per Lead (CPL)
Operations Proposals, Presentations
Data Management Lead Scoring & Nurturing Asset Mgmt. & MRM Cost of Acquisition (CAC)

Lead Generation & Events Advertising/Sponsorship Marketing Automation/Email How-To Guides Campaign ROI, Email Metrics
Demand
Branding & Social Media Lead Generation & Appointments Digital Asset Management Research Reports Marketing Qualified Leads
Generation
Content Marketing Tradeshows & Webinars Event/Survey Management Webinars Contribution to Pipeline

Customer Acquisition Sales Process CRM New Features/Ideas for R&D % Quota Achieved
Sales/Account
Customer Retention Opportunity Management Proposal/CPQ Objection Responses Renewal Rate, Revenue
Mgmt. Opportunity Metrics
Up-sell/Cross Sell Contact Management Sales Content Portal Sales Scripts

Staffing for Sales Enablement Recruiting & Hiring HRIS Job Descriptions Avg. Time to Achieve Quota
Human
Sales Training New Rep Onboarding Learning Management System Quality Assurance/Coaching % Unsuccessful Hires
Resources Performance Management Performance & Firing LinkedIn & Job Websites Sales Training Manual # CV/Resume Submissions

Customer Service/Support Helpdesk (phone support) Customer Support, Twitter New Features/Ideas for R&D Avg. Time to Resolution
Customer
Identify Sales Opportunities Email Support (case/ticket) CRM, Order Management Support Scripts % Escalations to Tier 2
Support Accounting/Billing/ERP
Customer Insight/Feedback Online Community Requests FAQs, SLA Net Promoter Score (NPS)
THE EVOLUTION OF SHOPPER MARKETING CONFIGURE, PRICE, QUOTE (CPQ) SOLUTION STUDY 9

CONFIGURE, PRICE, QUOTE


Solution Study

Benefits of CPQ
CONFIGURE, PRICE, QUOTE (CPQ) SOLUTION STUDY 10

Benefits of CPQ
CPQ systems provide significant benefits to the organizations that employ them.

Benefits for Sales Benefits for Marketing

On the frontlines, CPQ systems have multiple benefits CPQ systems enable marketing teams to better enable
for the sales organization, including: sales with more accurate marketing materials and value-
based sales tools. Key benefits of CPQ solutions for
Faster sales cycles from lead to close
marketing include:
Reduced sales complexity by giving reps
Providing branded proposal documents and contracts
pre-optimized solutions
Ensuring all marketing documents have accurate
Reduced prospect decision time
up-to-date pricing and product configuration
More opportunities to upsell products/services information
Faster responses to market & competitive pricing Developing customer-facing product catalogs
pressures
Providing sales playbooks that increase win rates
Increased sales time by spending less time on
Providing value-based sales tools like value
proposal development
propositions, white papers, ROI/TOC calculators, and
benefit estimators
BENEFITS OF CPQ CONFIGURE, PRICE, QUOTE (CPQ) SOLUTION STUDY 11

Benefits to Channel Partners Benefits for Marketing and


Sales Operations
CPQ systems allow companies to support, promote,
and control the configuration and pricing through their CPQ systems enable operations to reduce errors, protect
distribution channels. This benefits the channel network by: margins, and effectively manage standardized contracts
Improving cross-channel visibility and management for profitability by:

Enabling quick roll-outs of new products and pricing Reducing pricing and quoting errors through
configurations locally and globally managing constraints and rules

Streamlining channel order flow from lead to close Formalizing change control processes

Reducing errors by allowing users to centrally access, Viewing and managing commissions in real-time
manage, and control offer and document content Reducing risk and ensuring compliance
Tracking and measuring channel activity by product Standardizing proposal management
and price
Building process efficiencies with workflow
Protecting channel margins and preventing authorization and approval process
unauthorized discounting
Maintaining approved contract repository
THE EVOLUTION OF SHOPPER MARKETING CONFIGURE, PRICE, QUOTE (CPQ) SOLUTION STUDY 12

CONFIGURE, PRICE, QUOTE


Solution Study

CPQ Deployment Lifecycle


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