The business world has seen many technology trends that have influenced entire markets over the last few years. One of those is configure, price and quote (CPQ) technology. Gartner estimates the CPQ market at $570M in 2015, but the real growth is happening in cloud-based CPQ solutions where CPQ saw a 46% growth year-over-year. As companies replace on-premise and legacy quoting solutions with cloud-based solutions, the CPQ market will continue to be one of the hottest areas of business. The primary reason is simple – CPQ solutions make life easy and more efficient for buyers and sellers. Additionally, cloud CPQ systems scale with company growth and tend to have higher adoption rates than on-premise counterparts due to mobile-first solutions and integration with customer relationship management (CRM) systems. As CPQ will continue to be a critical focus for companies, we’ve highlighted 3 trends we expect to influence the CPQ market in 2017 and beyond.
In its inception, CPQ, or Product Configuration as it was known then, was geared towards the manufacturing industry but it has since grown to be used broadly in the technology, medical, telecom, and even insurance industries because product portfolios are constantly changing, but also because buyers have greater expectations. Regardless of industry, customers expect instant quotes for even for the most complex products, and CPQ enables that through easy to use configuration tools.
Also, while CPQ was traditionally viewed as a selling tool, other departments are quickly realizing its benefit. Legal departments appreciate the contract management features which allow altering and merging of contracts, highlighting differences in contract versions, and more. Financial departments benefit by seeing margins on quotes and orders grow due to accuracy and shorter sales cycles. A CPQ solution touches various silos within a business throughout the selling cycle, making for a unified and seamless experience that satisfies customers’ needs and expectations.
When cloud technology was first introduced, the idea of its mass consumption was disputed by many. As it turns out, however, ecommerce cloud platforms are growing at an exponential pace and are outperforming legacy, on-premise solutions. Why? Because ecommerce businesses are able to quickly build and deliver innovations that translate into results with the cloud. Additionally, ecommerce applications are seeing the benefits of offering a CPQ solution, especially in the business-to-business (B2B) space. Gartner predicts that by 2018, 40% of B2B ecommerce sites will use some form of CPQ to calculate and deliver product pricing dynamically. With the help of CPQ, manufacturers can provide a unified experience to partners and distributors while offering price variances depending on contracts. Also, wholesalers who were relying on outdated legacy platforms can leverage CPQ to deliver a unified buying experience, instead of competing on price and losing margins. As online purchases continue to grow, organizations that do not offer a seamless cross-channel buying experience will be negatively affected by those who do implement an omnichannel customer experience.
As technology continues to influence business, sales reps are expected to do more in less time. This has posed a problem for sales teams across the board. The ability to differentiate from the competition is the only way to survive without cutting price, which is why many organizations look to CPQ as a solution for their sales decay. B2B decision-makers are using mobile devices across all phases of the buy cycle, and they expect the same from the companies they do business with. Offering a mobile friendly way to build quotes, work proposals and configure products is essential to delivering quotes to leads in a timely and effective manner. The days of getting hard copy signatures and approval from individuals are truly gone. CPQ automates that process with a rules engine that understands when prices, guidelines, and contracts need to be checked by certain individuals and departments from anywhere on any device. Research shows that 49% of B2B researches who use their mobile devices for research do so while at work. This number is expected to grow as mobile searches exceed desktop searches. Make sure your business and sales teams are mobile-ready.
Technology continues to change how business is done and it influences what customers expect from organizations and sales reps alike. If you don’t see CPQ as a track for differentiation and success you may risk falling behind the competition.