The future of Configure, Price, Quote (CPQ) solutions has sparked a lot of debate. While CPQ remains a cornerstone for many businesses, there’s a perception among some that it may be losing relevance in today’s rapidly changing sales landscape. But is Salesforce CPQ really dying? The short answer is no – it’s evolving to meet new business needs and technological advancements.
In this post, we’ll examine why some believe CPQ is on the decline and explore the reasons why CPQ is, in fact, far from being obsolete.
Why People Think Salesforce CPQ Is “Dying”
Salesforce CPQ offers a significant edge in the quoting process. According to a study by Valorx, Sales representatives who don’t use CPQ typically need 73% more time to prepare a quote compared to those who do, highlighting the efficiency CPQ brings to sales workflows.
CPQ solutions are widely utilized across various sectors, from manufacturing to healthcare. In industries like high-tech and manufacturing, the adoption of CPQ can reach up to 80%, underscoring its importance in managing complex configurations and dynamic pricing effectively.
1. The Proliferation of Salesforce Alternative Tools
Today’s businesses have access to an array of alternative sales automation tools capable of managing configurations and pricing. eCommerce platforms and self-service portals, for example, offer streamlined CPQ-like functionalities. For companies with simpler product offerings, these tools present an agile, less complex solution, reducing the need for a full-fledged CPQ system.
Although it is not yet commercially available, Salesforce’s Revenue Lifecycle Management (RLM) is another powerful in-house competitor. When fully launched, RLM could offer a seamless alternative within the Salesforce ecosystem for managing the entire revenue lifecycle.
In the meantime, CPQ alternatives like Logik.io and Nue.io are becoming popular as more flexible, lightweight options for businesses seeking simplified solutions over the traditional Salesforce CPQ.
2. The Shift Towards AI-Driven Solutions
Artificial intelligence has changed the sales automation landscape, offering predictive pricing, automated decision-making, and dynamic configuration capabilities.
Some believe that these AI-driven solutions could replace traditional CPQ systems, especially as they become more sophisticated in handling tasks that once required CPQ, such as real-time pricing adjustments based on customer data and market trends.
3. Integration with Comprehensive Revenue Management Platforms
Salesforce Revenue Cloud and similar platforms bundle CPQ as part of an integrated revenue management ecosystem. By embedding CPQ within a broader suite of tools that includes billing, invoicing, and contract management, the tool becomes one component of a larger revenue management process.
For some, this integration signals that CPQ may be losing its identity as a standalone tool, potentially diluting its perceived importance.
Why CPQ Is Here to Stay: The Core Strengths of CPQ
Despite these arguments, CPQ is not only surviving – it’s adapting and thriving. Here’s why CPQ remains a vital asset for companies with complex sales processes.
1. Handling Complex Product Configurations
CPQ’s original strength and most significant advantage is its ability to manage complex configurations accurately.
For industries like manufacturing, telecommunications, and technology, where products are customizable and often involve intricate specifications, CPQ ensures that configurations are precise and compliant with business rules. This precision is critical for avoiding costly errors and delivering a seamless customer experience.
CPQ is a unique solution that touches nearly every part of an organization; from pricing teams and go-to-market strategists to operations and both direct and indirect sellers. It’s a tool that involves everyone, and it’s essential that CPQ serves the needs of all these different roles.
2. Enabling Real-Time, Dynamic Pricing and AI Integrations
The need for dynamic and real-time pricing has never been greater, and CPQ is perfectly equipped to meet this demand. By integrating with CRM and ERP systems, CPQ solutions provide data-driven pricing that can adjust instantly based on variables like customer history, market conditions, and even competitor pricing. This capability allows businesses to stay competitive and responsive in fast-moving markets.
Today’s CPQ solutions increasingly integrate advanced capabilities like AI-powered pricing optimization and guided selling tools. With AI algorithms, businesses can leverage adaptive pricing strategies that respond to market shifts, helping to maximize profitability.
Guided selling enhances the buying experience by suggesting personalized solutions, while dynamic quoting speeds up sales with real-time quote adjustments. Additionally, emerging technologies such as VR and AR are being incorporated into CPQ systems, offering immersive product demos that significantly boost customer engagement.
Future trends point toward more intuitive systems with enhanced natural language processing and machine learning, further streamlining user interactions and minimizing errors.
Salesforce CPQ is not dying, but rather transforming to meet the increasing demand for more automated, scalable, and customer-centric sales processes. It is also integrated with other Salesforce Products like Sales Cloud, Service Cloud, and Revenue Cloud, creating a more holistic ecosystem for businesses to manage the entire customer lifecycle.
3. Streamlining the Sales Cycle
By automating the quoting process, CPQ shortens the sales cycle significantly. Sales teams can generate accurate quotes more quickly, without the need for lengthy back-and-forth approvals. This efficiency not only speeds up the sales process but also enhances the customer experience by delivering timely, accurate quotes – helping to close deals faster and with greater confidence.
In fact, The CPQ market is on a strong upward path, with a valuation of about $2.2 billion in 2022. According to the Global Strategic Business Report, this market will grow at a compound annual rate of 17-20%, potentially reaching or exceeding $7 billion by 2030. This rapid growth reflects a rising need for streamlined sales processes and the integration of advanced technologies like AI and cloud computing, which enhances CPQ functionality and flexibility.
Industries such as manufacturing, IT, and telecommunications are increasingly adopting CPQ solutions to handle complex sales configurations and improve pricing accuracy, further driving market expansion.
As businesses continue to seek more efficient sales operations, CPQ is becoming a vital tool for managing intricate product configurations and accelerating revenue generation.
Salesforce CPQ continues to evolve with new features that streamline complex sales processes, enabling faster and more accurate quoting, and improving overall sales efficiency.
4. Supporting Subscription and Recurring Revenue Models
The shift towards subscription and recurring revenue models has made CPQ more relevant than ever. CPQ systems now support subscription billing, renewals, and usage-based pricing, making them indispensable for companies operating within these models.
This flexibility is crucial for businesses that need to manage customer contracts over time, providing consistent service and revenue predictability. Moreover, the ongoing improvements and customization options in Salesforce CPQ allow businesses to tailor their sales processes to unique needs, addressing concerns that the tool might be rigid or outdated.
5. Leveraging AI and Advanced Analytics
Far from being replaced by AI, modern CPQ solutions are incorporating AI to become even more powerful. AI enhances CPQ by providing insights into optimal pricing, identifying cross-sell and upsell opportunities, and predicting customer needs.
This evolution turns CPQ into a strategic tool that helps sales teams make data-informed decisions, elevating its value beyond just configuration and pricing.
Final Thoughts: CPQ’s Future Is Strong
While CPQ may face competition from newer sales automation tools, it remains an essential part of the sales tech stack for businesses dealing with complexity. Its ability to streamline configurations, optimize pricing, and support modern revenue models ensures that it stays relevant. CPQ is not dying – it’s adapting and evolving, integrating AI and analytics to support complex sales environments in ways that new tools alone cannot replicate.
Indeed, implementing CPQ is a substantial endeavor that involves overcoming adoption hurdles. The platform represents a major transformation in how an organization handles revenue workflows and the associated tools. If businesses don’t tailor the CPQ experience to suit their users, they may face prolonged timelines – potentially years – before realizing any substantial return on their investment, if they achieve it at all.
Many organizations have yet to fully optimize their Salesforce CPQ experience. Those who focus on enhancing CPQ’s speed and usability for their teams are positioning themselves for a significant edge in the market, paving the way for competitive advantages and future growth.
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