What is Salesforce CPQ – Why Every Business Needs it?

What is Salesforce CPQ?

Salesforce CPQ is one of Salesforce’s most groundbreaking solutions and was first established in the market. The constant operational upgrades in the sales cycle have driven businesses globally to optimize their sales operations with Salesforce CPQ implementation. From being a nice-to-have solution to becoming an imperative part of your operational model, CPQ is now the go-to solution for any business that demands an improvement in sales efficiency.

Imagine your business is on the verge of closing deals, but your schedules are dependent on manual activities, which hinder your quote creation. Doesn’t this bother your sales team? Don’t worry; you’re not alone here.

A research found that only 34% of sales reps’ time is spent efficiently on selling, while most of their time is occupied with manual quote creation, approvals, and proposals. This is where Salesforce CPQ could help your sales team automate your critical tasks and streamline your sales operations.

Salesforce CPQ (Configure, Price, and Quote) has always been the solution for sales reps to overcome their common challenges in the quote-to-cash cycle. If your business uses legacy quote configuration and faces issues with inaccurate quotes, then Salesforce CPQ is the ultimate software your business requires, and it uses the simplest order form for most businesses with a complex selling process.

Configure, price, and all things nice

Configure:

To be precise, it’s about how you Configure your order. It is the first and simplest step you take once your brand-new CPQ is out of its box. Fill out essential details about your customer, product/service, and then proceed with your sales process. Align your product/service to map with the unique business requirements of your customer. Here, the service/product features are customized and structured to offer them as a package. The important parameters to be considered here are the quantity, service or product units offered, and configuration rules.

Price:

Immediately after the product configuration is configured, you set the pricing accurately. Set the pricing in accordance with the different price lists. Apply discretionary discounts for customers, and let Salesforce do all the math. Dynamic pricing or generating accurate quotes in brand-aligned PDF documents has never been more accessible. Sales representatives can calculate unit, block, subscription pricing, and discounts with just a few clicks.

Quote:

Once the pricing is set, next comes the generation of quotes. As the final step of your sales process, you need to get the quotes signed and approved. It’s also called the Quote-to-cash process, where it covers all the parts from the opportunity to cash collection. Users can set up perfectly customized on-brand quotes with Salesforce CPQ. Quotes can be generated lightning quick by feeding in the basic information. Quotes refer to both electronic records of quotes and PDF documents. 

Product Bundle

A product bundle is a combination of a different set of services and products that are sold explicitly to customers as a single package. The product bundle contains multiple records, such as product options, product features, option constraints, and configuration attributes. The following are three types:

• Static Bundle – The static bundle—otherwise known as the traditional bundle—is fixed, where the products are predefined during the bundle creation and offer no scope for changes after configuration.
• Nested bundle – As the name implies, the nested bundle consists of groups of previously combined elements to form a single bundle. This allows users to select from a subset of options available in a single product, which can add to the convenience.
• Configurable bundle – These bundles can be customized to meet the customers’ unique needs. They offer scope to add configurable products to your bundle—with some restrictions to prevent unrealistic configurations.

Configuring a product bundle in CPQ requires the following records: products, product options, product features, option constraints, and configuration attributes.

CPQ Product pricing

Salesforce CPQ offers several ways to price products. For CPQ users, it’s essential to understand the various pricing methods to determine the best one that aligns with their operational model. This helps to leverage the full features of Salesforce CPQ.

Types of product pricing methods:

• List price
• Cost price
• Block price
• Batch price
• Percent of Total
• Contracted price

List price – List price is used when the user has fixed pricing for the product or service. The list prices can easily be retrieved from the editable price book entries, but only if the editable checkbox is set to true. We can also add discounts on the list price.

Cost-and-Markup Pricing – This type of pricing allows your sales reps to set a price based on the cost and add a markup amount. Unlike the list price and discount model, this allows the sales reps to gain complete control over the price quote with dynamic changes.

Block pricing – Allow your sales reps to price products according to the different quantity ranges, referred to as block prices. This pricing model can be leveraged when you need to price your products as groups or packs.

Batch pricing – The batch price can be used only with product options inside a bundle. The batch pricing doesn’t work with standalone products. This pricing model prices accessory product options and components based on quantity ranges.

Percent of total pricing – Also known as the dynamic pricing model, this pricing technique lets you configure products and price them based on the sum percent of other quote line items. In this model, the product’s price completely depends on the other products in the quote.

Contracted Pricing – This pricing model is beneficial when your sales reps want to continue with the negotiated prices even after the contract is finalized. Contracted pricing allows your sales reps to quote the prices initially agreed upon.

Why should your business invest in Salesforce CPQ?

• CPQ doesn’t empower sales teams alone. It supports customer service and finance teams, who will benefit from decreased handling time and fewer mistakes.
• It provides customers with a self-service experience and reduces sales touches.
• It vastly improves price positioning and quotation quality.
• With Salesforce CPQ, the first and foremost potential is that you can free up the precious time of your sales reps.
• It reduces the time spent on sorting out complex contracts or billing processes.
• Automating the sales process with CPQ ensures a precise quote with swift processes.
• Integrating CPQ with other platforms, such as your ERP, helps streamline the overall business operations.
• It is a powerful platform for sales professionals and businesses to manage complex configurations, specialized pricing rules, and the closure of bigger deals.
• CPQ’s ability to offer personalized quotes helps improve the overall customer experience.

The right time to implement CPQ is NOW.

LevelShift understands that any technology is only as good as the data it runs on. Over the years, we’ve managed agile implementations for complex CPQ projects and helped companies pivot to new business models. Our custom Salesforce CPQ implementation will help address your specific industry needs. Our CPQ expert team understands your business model and will guide your sales team in configuring product bundles and setting up different price rules based on varying discounts on quotes.

LevelShift offers Accelerator packages such as Salesforce CPQ Quickstart and SaaS accelerator to hasten your CPQ implementation and maximize the Salesforce ROI. 

FAQs

1. What does CPQ mean in Salesforce? 

CPQ stands for Configure, Price, Quote. It’s a Salesforce tool that helps sales reps create accurate quotes quickly. 

2. What is the difference between Salesforce CRM and Salesforce CPQ? 

Salesforce CRM tracks customer interactions, while CPQ focuses on the sales quote, product configuration, and pricing. 

3. Who uses Salesforce CPQ? 

Sales teams use Salesforce CPQ to generate accurate quotes.