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CPQ: Configure. Price. Quote.

In 2010, Gartner Group launched the term CPQ, which stands for Configure, Price, and Quote. It refers to a visual browser-based software tool helping companies with the sales of complicated and customizable product and service solutions. The terms ‘CPQ tool’ and ‘sales configurator’ often mean the same thing.

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Configure
Configure a product and service solution meeting the customers’ needs based on predefined sales selections. The tool will only allow making of sales selections that are actually possible.

Price
Price the configured product and service solution automatically and in real time. The tool allows use of different pricing methods and establishment of individual margins and discount rates by the sales person.

Quote
Based on the resulting configuration, generate the offers with the necessary illustrations and commercial and technical annex documents. The tool allows making of customer-specific changes to the offer.


The features of the CPQ tool can be made very customer-specific, depending on the customer’s needs, products offered, and extent of the use. As a quotation and pricing tool for sellers, it could include a comprehensive set of quotation documents and price information. While as a tool for presenting the product portfolio it does not necessarily need to include the configuration and offer functionality at all, serving merely to help the customer with finding the product best suitable for his or her needs. Similarly, if used by a worldwide sales network, the tool can be integrated into several external information systems, while no integration need be necessary if there are only a few users.

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CPQ tool applications:

  • A quoting and pricing tool for the sales rep
  • Visual tool for product configuration and design
  • Project configurator
  • Ordering tool for customers
  • A tool for presenting the product offering
  • Product selector tool and e-catalogue
  • A tool for managing global sales network
  • A tool for managing marketing and product launches