What is CPQ and why is it so important also for the B2C market?
The world of technology and industrial software is fond of overusing acronyms, some of which are incomprehensible even to the experts. In this article we’d like to shed some light on the CPQ acronym – “Configure, Price and Quote” – which is now widely used in the manufacturing sector.
Designed to make it easier to sell configurable products, CPQ solutions are highly popular in the automotive industry and are now catching on with small and medium-sized manufacturers.
The market trend for requesting and promoting customisable products has led interest in CPQ software to spike in many sectors: according to the Gartner Magic Quadrant published in 2020, the CPQ applications market grew by 15.5% in 2019 alone, reaching an estimated value of 1.42 billion dollars.
Let's take a closer look at the meaning of “Configure, Price and Quote” and the core CPQ capabilities.
What do we mean by “configure”?
Configuration software presents each product and the various options available, enabling users to choose their preferred solution and the configuration that reflects their individual needs.
Product configuration might be as simple as a list of options, or it may be combined with visual CPQ technologies such as 2D imaging or 3D rendering [see the following article for further details: Innovation Insight for Visual Configuration].
Visual configuration makes it possible to display a product in real time, giving customers a clearer idea of the range of options, such as materials, colours and accessories.
This type of technology is extremely useful for manufacturers using ‘configuration to order’: it enables customers to see the product they are about to buy in digital form before it is ordered and then goes into production.
What do we mean by “price”?
“Price” refers to the ability to manage the prices of the product and individual options. Users can choose from the options available and get instant feedback on what the finished product will cost.
What do we mean by “quote”?
The Quote function enables users to confirm their chosen configuration and request a quote for the product they’ve chosen.
This stage is all about finalizing the purchasing process, and it takes place in different ways: a purchase may be finalized via an authorised retailer, based on the configuration the customer has saved and the price quoted. Or customers may buy the product directly from the manufacturer’s website via electronic payment. In this case CPQ software is integrated with an e-commerce solution.
Don’t hesitate to contact us with any queries on the guidelines for using CPQ software, or for further details on our product, Missoun 3D CPQ. We’d be only too happy to get in touch and answer your requests.