What is Salesforce CPQ? Features and benefits.

Let's imagine that a sales representative has to make a quote for the sale of 20 smartphones which, depending on their colour and capacity, have different prices. In addition, if the customers adds five more smartphones, they can get a volume discount and the offer becomes even more advantageous. In addition, the quote should offer insurance at a monthly rate for a total duration of two years. On the other hand, this specific customer has negotiated discounts on the base rate. How do you make this quote without making mistakes?

What is Salesforce CPQ?

Salesforce CPQ is the tool to make these kinds of complex quotes and turn them into a sale. Quotes generated by Salesforce CPQ are automated according to a pre-programmed set of rules, ensuring error-free pricing that takes into account quantities, discounts, customisations, optional product features, multiple revenue types, and incompatibilities.

CPQ stands for the three main functionalities of the software:

• Configure: the configuration of products and services depending on their characteristics
• Price: the calculation of prices based on their respective discounts
• Quote: the generation of quotes from the data obtained from the previous stages

Salesforce CPQ, a leader in the Gartner Magic Quadrant

For the third consecutive year, Salesforce was named as a leader in the Gartner Magic Quadrant for CPQ applications. This Gartner report highlights Salesforce CPQ's market leadership, as it is the product most frequently selected by customers and has the largest number of customers in production. It also stands out for its automatic updates. Last year, the Salesforce CPQ application team moved from managed package status to an integrated platform application. This has enabled a standardised upgrade process, with all Salesforce CPQ customers upgrading to each new version at the same time. Updates are now aligned with the same cadence as Sales Cloud.

Features and benefits

Product configuration

Salesforce CPQ allows different product types to be configured. For example, product bundles, which are a series of products that are usually sold together. Or multidimensional products, which allow you to create order lines for blocks of time (months, years...) with quantities and discounts separated from each other.

In addition, product rules can be used to prevent sales representatives from including incompatible products in the quote. These rules can also facilitate the inclusion of cross-border and Up-selling proposals.

Pricing

Salesforce CPQ offers different advanced options for pricing. It allows you to handle pricing in different scenarios such as block pricing, cost and margin based pricing, pre-agreed prices individually for each customer, volume discounts... By configuring these automations you can achieve accurate and optimised pricing.

Budget generation

Salesforce CPQ features an integrated document generator that allows you to create quote templates and pre-define different sections, headers, footers and terms and conditions. At the product line level, it also allows you to hide or show different fields such as the discount per line or the list price. This enables the automatic creation of highly professional documents that are in line with the company's brand strategy.

The following image shows an example of a quote generated from a template. This document contains a list of budgeted products and services [1] and the prices and discounts applied to these items [2]. If prices and discounts include totals and subtotals, they are displayed in a summary below the product lines [3]. On the second page, the quote shows the terms and conditions [4]. Finally, the corresponding block for the client signature is included [5].

Other features

Guided sale

Another feature that improves the productivity of sales reps is guided selling. This functionality allows you to configure rules so that by means of a series of questions, depending on the sales representative's answers, a series of products or others are shown.

Automatic generation of renewals

For subscription products, renewal opportunities and quotes can be automatically generated before the end of the contract with the customer. This drives future sales and provides an accurate projection for the sales team to follow up. The renewal opportunity contains all subscription items with existing contract quantities and allows new products to be added.

Salesforce Billing

Salesforce billing is an add-on package for Salesforce CPQ. After a sales rep finalises a quote and places the order, Salesforce Billing allows you to extract billing, payment and revenue accounting data using CPQ-generated order entry.

It allows you to automate customer payments and process them manually or via an external payment system. You can also record all your transactional data in financial ledgers and financial periods, then map that data to an external accounting system or ERP. Additionally, through revenue recognition reports, it allows you to account for the revenue of a product you provide to a customer.

What CPQ license do I need? How much does CPQ cost?

Salesforce CPQ is available in four editions:

• CPQ: This is the basic plan. It costs €75 a month per user, and includes all the basic features for product configuration, price setting, budget creation, product catalogue and improved price list.
• CPQ+: This is the next most advanced plan. It costs €150 per month per user and its extra features include advanced management of orders and approvals and prices based on use.
• CPQ & Billing Growth: This edition combines CPQ functionality with the Salesforce billing solution, allowing you to unify sales and finance. It includes billing and revenue software to automate post-quote processes and create a unified invoice. The price of this edition depends on the needs of the company.
• CPQ+ with Billing: This edition contains additional functionalities such as the handling of complex revenue transactions and automated payments and allocations, which reduce manual processing time by streamlining electronic credit card payments. The price of this edition depends on the company's needs.

Trailhead Training and Certification

Salesforce's learning platform, Trailhead offers several modules where you can learn more about CPQ's functionalities with practical exercises. A good starting point can be to complete the "Salesforce CPQ Fundamentals" module and the "Learn Salesforce CPQ Admin Fundamentals" path, which includes the most important functionality modules.

On the other hand, Salesforce has a specific certification for CPQ Specialists, where knowledge and skills are measured in relation to the following areas: CPQ platform, package configuration, pricing configuration (block pricing, scheduled discounts, subscription pricing...), quote templates, product selection, orders, contracts, amendments, renewals and advanced approvals.

Success stories

There are many examples of companies that have adopted the Salesforce CPQ solution. One such example is software company Cloudera, which has harnessed the power of Salesforce CPQ to automate its pre-sales processes to create quotes faster and with fewer errors. Before using Salesforce CPQ all their operations were manual and budget management was complex and non-standardised.

Cloudera also highlights the fact that it is built directly on the Salesforce platform, so adoption among sales reps has been very easy.

Conclusion: Are the standard Sales Cloud opportunities enough?

In simple scenarios where there are not many options in the configuration of products and price combinations, creating quotes with the standard Sales Cloud opportunities or using tools such as Word or Excel can be enough.

But when more minute combinations of product and service features are involved, there is a high risk of making mistakes if the right tools are not in place to meet these needs.

Salesforce CPQ helps companies sell products and services of a complex nature which require a certain amount of customisation. Once the product is configured, it provides accurate pricing instantly taking into account pricing rules and discounts for each customer, helping to drive sales.