Telecommunication companies (telcos) can have complex and customized products and services that can prolong their sales cycles. But in business, nobody wants to waste time. They need to deliver quick, accurate quotes to prospective enterprise clients. With highly configurable offerings, there may be inaccurate quotes, frustrated clients, stressed reps and, ultimately, lost revenue.
However, telcos can prevent this by integrating a tool that can help streamline their operations. This tool is known as Configure, Price, Quote (CPQ) software. But what does CPQ mean and how can this system help maximize your revenue? Discover how a single platform can simplify complex sales cycles—from pricing to quoting.
What Does CPQ Stand For?
CPQ is an acronym that stands for Configure, Price, Quote software, which forms three core components of the sales cycle. Here is a breakdown of each.
Configure
Configuring is the process of selecting and customizing products based on the consumer’s needs. The customization is based on the product’s features and capabilities. This step is all about matching the consumer’s goals with the products’ customization options. In telco, an example of this would be configuring a business communications package with specific service levels, user licenses and hardware.
Imagine having to manually enter these specifications and configuration details into a form or customer relationship management (CRM) system. It can be a time-consuming process. However, CPQ systems can help speed up the process—with accuracy—thanks to their integration abilities.
Price
Pricing is the process of calculating the total cost price based on the configured product specs. The pricing would include the base price and any markups or discounts added during the configuration stage. Markups and discounts will depend on the business’s rules and options. Other factors that further influence the price include taxes, delivery charges and any special promotions at the time.
A CPQ system can automatically calculate prices based on a company’s business model and other relevant pricing factors. There’s no need for spreadsheets and manual calculations. CPQ software automates price determinations for complex pricing models, factoring in changing parameters like discounts and markups.
Quote
Quoting is the process of generating a professional document that outlines the configured product with its pricing determinations. The quote will also include the sale’s terms and conditions, and the accepted payment methods. It serves as the exact record of the agreed-upon product and price negotiated between the buyer and seller.
CPQ systems can automatically build quotes that include all this important information. This automation allows negotiations, iterations and deal closing to happen much quicker than when done manually. All that sellers have to do is carefully review the document before sending it to the consumer.
What Is CPQ Software?
Configure, Price, Quote software enables businesses across various industries to automate and streamline their quote-to-cash processes. This sales tool helps businesses easily configure products, accurately price them and quickly generate quotes. The goal of CPQ software is to help reduce manual effort and errors, thereby accelerating the sales cycle while improving the consumer experience.
A few CPQ software capabilities can include:
- Guided selling
- Product and service configuration
- Price adjustment
- Automated pricing and discounting
- Quote generations and amendments
- Proposal generation
- Deal management
- Product bundling
- Subscription pricing
- Multi-currency support
- Workflows and approvals
How Does CPQ Work?
CPQ systems help automate and streamline the telco sales cycle. Here is a step-by-step guide on how it achieves this from the sales rep’s perspective:
1. Opportunity creation
The rep identifies a new lead in their CRM. With an integrated CPQ, the system automatically imports all relevant consumer and product data from the CRM and enterprise resource planning (ERP) systems. Here, reps no longer have to manually copy consumer details, saving valuable time.
2. Guided product configuration
The rep configures the consumer’s order through a guided interface. The CPQ uses built-in product logic and rules to ensure the configuration’s validity. Some systems may even utilize artificial intelligence (AI) to recommend configurations based on the consumer’s history or even industry trends. The rep doesn’t have to navigate complex catalogs or technical sheets, minimizing the risk of errors.
3. Dynamic pricing
With the configurations complete, the CPQ automatically calculates the total price by referencing live pricing tables in real time. It can also apply relevant discounts, taxes, fees and currency conversions. The CPQ will also account for the company’s policies to ensure compliance with its rules. The rep simply needs to view and adjust margins as needed.
4. Quote generation
The CPQ will automatically generate a professional, branded quote. The quote will contain all the pulled data about the deal—from the configuration summary to the payment terms. Each quote generated will fall under the company’s branding guidelines to ensure consistency. The CPQ may even generate multiple formats.
5. Automated approval
If required, the CPQ automatically triggers an approval request to management or other relevant parties. With one click, they can either approve or reject the quote. Reps can receive instant feedback without the need for time-consuming back-and-forth email chains.
6. Order fulfillment
Once the consumer approves the quote, the rep can convert the deal into an order through the CPQ. The CPQ seamlessly integrates the correct consumer and product data into CRM and ERP systems, minimizing the need for double entry.
7. Renewals
The CPQ process doesn’t end with the sale—it continues through post-sales support. CPQs play a role in contract or subscription renewals, upsells and cross-sells to aid in repeat business. The system can help send timely renewal quotes and track pricing changes so consumers stay informed of their status.
Benefits of CPQ
The CPQ software market may reach over $7 billion in 2030 from $2.5 billion in 2023—and it’s easy to see why. Here are several tangible benefits that telco businesses may experience from adopting CPQ software:
- Enhanced sales efficiency: CPQ software can automate many manual, time-consuming tasks associated with the sales cycle. It can accurately pull consumer data and quickly generate quotes.
- Improved quote accuracy: CPQ software considers all necessary data points to build the quote. It considers the consumer, product, configuration rules, pricing models and discounts.
- Accelerated sales cycles: CPQ software can make generating quotes and closing deals of complex sales processes easier and faster. Win more business with faster turnaround times.
- Increased deal size: CPQ software uses guided selling features that can help provide upsell and cross-sell suggestions. It provides the best possible value to consumers while increasing deal size.
Ensure Your CPQ Integration Is a Success
If you’re considering using a CPQ tool, a successful rollout starts with your business rules. Give the tool a foundation to work from. For telco providers, this includes managing highly variable product bundles, service plans, financing options and multitier pricing structures. You’ll need clear and consistent rules that ensure each quote is accurate and compliant.
Of course, you’ll also have to consider the different existing systems it will integrate with. It’s crucial for it to be able to sync consumer, product and business data to make full use of its features and capabilities. Look for a CPQ that has integration capabilities with your current platforms.
The next step is to migrate the data. Telco companies typically have large, complex product databases with frequent updates and variations. Ensure your data is up-to-date, clean and validated before the integration.
Before going live with the new CPQ tool, you must test it. Testing it will help verify your business rules and ensure that your data accurately pulls in from your other systems. Everything must work as intended before the tool goes live. Doing so will help prevent billing inconsistencies or misaligned provisioning, for example.
CPQ FAQs
Refer to the frequently asked questions (FAQs) below for further information about CPQs.
What is a CPQ system?
A CPQ system is a tool that transforms complex product configurations into easy-to-create, consumer-centric solutions.
What is the CPQ process?
The CPQ process is where salespeople configure products and services, calculate their price in real time and produce quotes based on these calculations. It’s a three-step process that simplifies the quoting of highly configurable products and services.
How do you deploy CPQ?
To successfully deploy a CPQ tool, you must first define your business’s pricing and quoting rules, then integrate it with existing systems and finally, migrate the data.
What is CPQ testing?
CPQ testing is the process in which users conduct rigorous testing standards to ensure the CPQ tool works as intended.
Choose CSG for CPQ
Configuring, pricing and quoting are just part of the broader challenge of revenue management. The real goal is to seamlessly convert quotes into long-term, profitable consumer relationships.
Allow CSG to be your expert partner in managing the entire revenue cycle. Our telecom-specific, AI-powered CPQ and order management platform is designed to be user-friendly. It allows users to configure without coding, tailor pricing agreements and quote complex products with ease.
