Configure, Price, Quote (CPQ) has its own unique glossary of terms

Today, products are more diverse, pricing is more complex, and customer expectations are higher than ever. To keep up with the rising demands of doing business, you may be considering a configure, price, quote (CPQ) solution.

CPQ software helps businesses create ideal product and service configurations and build quotes that are accurate and personalized to the buyer’s needs—while maximizing profit, too. Not only can CPQ help your sales team be more efficient and effective, but it can also lead to a better customer experience (CX). A happy customer is more likely to be a repeat customer, and we all know a repeat customer is likely to spend more money and promote your business.

To effectively navigate the world of CPQ, you’ll need to know a few common terms that you’ll come across and how they relate to each component.

Customize your CPQ configuration

Gone are the days of a one-size-fits-all approach to your product offerings. Customers like to tailor products to their liking.

A CPQ solution makes it easier for both customers and sellers to choose from many variables and develop a custom product configuration. The terms you’ll need to know include:

• Guided selling: an automated, rules-based shopping experience that identifies the best product configuration or solution for your customer. Guided selling experiences pose questions that prompt users to narrow their search so you can suggest products tailored to their needs.
• Product: an item or service sold to a customer and is identified as an individual line item on the quote.
• Product bundle: individual products or services sold together at a lower price than if they were sold individually.  

Price products appropriately

Pricing customized products can get very complex very quickly. CPQ ensures you’re offering a reasonable, personalized price while still serving your bottom line. Relevant terms include:

• Batch quantity: allows you to price products by groups, for example, $20 for 55 units.
• Block price: allows you to assign a fixed price to a product based on quantity.
• Contract price: the price negotiated with a specific customer and is automatically applied to a quote for that customer.
• Customer price: the price of the product after applying any discretionary discounts.
• Markup price: how much more a product or service costs a company than the selling price. 
• Price rule: adjusts order pricing only if certain conditions are met.
• Prorated list price: the adjusted price for the total contract value considering the duration of the subscription.

Deliver accurate quotes

You’ve configured the product to meet your customers’ needs, or in some businesses, the customer has performed the configuration online themselves and is waiting for your next steps. You’ve determined the right price for that product. Now it’s time to send a detailed quote to your customer.

Since CPQ software automates much of the process, you can generate more quotes faster. And when your sales teams generate quotes more quickly, they can focus on closing the deal—potentially in just a few clicks.

As your business grows, it can become increasingly difficult to manage product configuration, complex pricing, and time-consuming quotes. CPQ automates and streamlines those processes to benefit your business and customers alike.

To learn more about CPQ, download Oracle’s Essential Strategies for Configure, Price, Quote.

To see Oracle Configure, Price, Quote (CPQ) in action, take the brief self-guided tour below.