Salesforce CPQ

What is Salesforce CPQ?

Salesforce CPQ is a native Salesforce app that helps you close complex deals, fast. What is CPQ? The acronym stands for Configure, Price, Quote, and its functionality can be boiled down as follows:

• Configure: You choose which products your customer will buy
• Price: It calculates how much you charge
• Quote: It produces a PDF for you to send to your customer

It’s a faster, more controlled way to supply quotes with fewer errors and greater accuracy. It gets more deals moving through your sales pipeline and helps build stronger customer relationships.

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What Does “Configure” Mean in Salesforce CPQ?

“Configure” means helping sales reps quickly and easily select the products that your customers will buy. Salesforce CPQ asks sales reps a series of questions about each customer and, depending on the answers given, narrows down a potentially vast, complicated product catalog into the optimal customer-specific selection.

If you have products that are incompatible with one another, then Salesforce CPQ will be particularly useful in minimizing quoting errors and subsequent costly returns. The software can be configured to restrict reps from selling technically non-viable bundles and nudge them towards more functional combinations, giving reps the ability to look forward and concentrate on the next sale rather than wasting time messing about with the last.

For reps lacking the technical knowledge required to offer customers expert advice, especially new hires, Salesforce CPQ can be invaluable. It carefully guides reps through the sales process triggering follow-up questions, suggestions, and additional pieces of information along the way, transforming reps from ordinary salespeople into trusted advisors, providing real value to customers.

But, it’s not just customers that benefit from Salesforce CPQ, you’ll see a direct impact on your company’s bottom line. The software works to intelligently increase order values and margins over time by suggesting upgrades, upsells, and add-ons at every stage of the customer relationship.

What Does “Price” Mean in Salesforce CPQ?

When it comes to “Price,” the starting point within Salesforce CPQ is the Salesforce Price Book (or Price Books plural, depending on your exact configuration), which contains all of the list prices for your company’s products. Any changes that sales operations make to the prices in the Price Book filter downstream instantly to sales reps, so no more missed emails and endless back-and-forths over every price adjustment.

Salesforce CPQ has several pricing tools that can be layered on top of price books to adjust prices as per your specific pricing strategy and methodology.  Whatever tool or tools you go for, you can rest assured that quotes are always technically and commercially viable. The pricing tools within the CPQ include:

1. Block Pricing: Where a price is quoted for a range of quantities rather than per unit, e.g., a cell phone contract might cost $10/mo for 200-300 mins of calls, or $15/mo for 300-500 mins.
2. Percent of Total Pricing: Where a price is charged as a percentage of the sum of all the other products in the bundle, e.g., a 10% admin fee might be added to the quote.
3. Option Pricing Override: Where the price of a product is different when it’s sold as part of a specific bundle, e.g., a set of ink cartridges might cost $30 by themselves, or $10 when a customer buys a printer too.
4. Cost-Plus Markup Pricing: Where a price is calculated by applying a standard margin to the cost price, e.g, if a printer costs $100 to manufacture and you use a 20% margin, then the retail price will be $125.
5. Contracted Pricing: Where the price of a product or category is applied to a specific customer account, e.g., “The Artist Formerly Known as Prints” (a favored customer) might pay $100 for a printer, while all other customers are charged $125.

Salesforce CPQ speeds up approvals by 95% on average by streamlining the entire process. When a sales rep enters a discount on a quote, the CPQ informs them of the approval level required (no nasty surprises) – a 10% discount might need approval from a line manager, while a 20% discount might need approval from a VP, for example. Once the rep has confirmed the quote, the approval requests are sent out simultaneously, and the approvers can make approvals with the touch of a button.

This standard approval process works fine in the majority of cases, but there are additional functionalities baked in, such as:

1. Smart Approvals: Once an approver has approved a quote, they won’t be asked to do so again if it’s rejected by a higher tier and subsequently resubmitted.
2. Delegated Approvers: One approver can assign another person to cover them when out of the office or on annual leave.
3. Replacing Approvers: If one approver is replaced by another, the new approver is automatically subbed into every outstanding approval process.

What Does “Quote” Mean in Salesforce CPQ?

For the customer, the “Quote” is a PDF document containing information about the products or services they want to buy, plus contact information, a table of prices with a grand total, and a few places for dates and signatures (or e-signatures). So, no surprises there.

Sales reps can choose from a number of great-looking branded templates, each of which is highly configurable. Reps can add or hide columns, pages, sections, and terms for each customer with their configuration automatically saved for next time. Additional documents like product specifications can be added to the PDF, so everything is kept together in one place, and of course, all quotes are stored in the system for everyone to see.

But, quotes within Salesforce CPQ have a secondary dimension too: They serve as internal electronic records with expiry dates. Sales reps can create multiple quotes for each opportunity to play around with figures, be strategic, and share with others, before choosing a Primary Quote to fire off to the customer.

How to Supercharge Salesforce CPQ with the “Super C”

KBMax is an ISV partner in the Salesforce ecosystem in order to help supercharge CPQ to handle complex products. Our “Super C” (as we refer to it) is an enhanced product configurator that takes the “C” in Salesforce CPQ to a whole other level. It handles the most complex product rules – ones that lie beyond the scope of Salesforce CPQ – and has been designed with manufacturers of highly customizable products in mind.

Advanced CPQ product rules are created simply with Snap: a visual programming language that’s so straightforward even non-technical people can use it, but robust enough to handle the most complicated mathematical functions and complex manufacturing data.

Interactive visualization allows sales reps to configure products in 2D and 3D, changing colors, dimensions, and other product-specific attributes. This functionality can be embedded on your website, so end-buyers too can experiment with visual configurations, bringing products to life, changing prices dynamically, and boosting conversion rates as a result.

For configured products that require engineering drawings before sales can quote or manufacturing can build, KBMax has CAD automation with Solidworks, Autodesk Inventor, PTC Creo 3D models, and drawings. So, no more bottlenecks while reps wait weeks for manual processes to be carried out, with customers lost in the interim.