Industry & Innovation Insights on CPQ for 2019

6 min readJun 10, 2019

Technology & Mobility has recently impacted every industry in the recent past and has created a ripple effect across all verticals. This phenomenon has improved sales on all possible angles resulting in innovative ways of selling with next-generation Configure, Price, Quote (CPQ) products. The need for CPQ software products has evolved from a “nice-to-have” to a “need-to-have” for businesses to be successful.

Additionally, with the explosion of personalization in configurations available, there is a constant rise in the number and complexity of variables involved in any product configuration and sale. The end-products are not a single product, but an ensemble of component products whose costs depend entirely on customer segmentation and product choice. This leads to separate charges for each component product in a package and an unsatisfactory customer experience.

These issues with customer experience created an increase in the adoption of CPQ. CPQ market quotes $878 Million approximately and is expected to grow at 20% through 2020. CPQ delivers a superior customer experience because,

  • Companies with CPQ had a 300% increase in ROI in less than three years and a 17% higher lead conversion rate.
  • There is an $8.8 Million reduction in the legacy system and support costs.
  • There is a 4% increase in revenue within three years and experiences a 105% increase in average deal size.
  • With CPQ, there is a 70% reduction in overall sales cycles and number of quote revisions are reduced by 13%.

With the CPQ market looking so bright, here are our 19 thoughts on the CPQ Industry for the year 2019:

Creative Configuration

We do not live in a one-size-fits-all world. From the playlists for our music to our clothes to building our cars on dealer websites, we expect everything customized to our wants. In consumer purchases, the desire to configure is driven by ‘want’ but when it comes to business purchases, the configuration is driven by the ‘need/requirement’. This is where CPQ enables sales teams to configure or provide the customer with unique personalized combinations of products and services that deliver exactly what buyers need.

1. Customers seek instant gratification all the time and CPQ is no exception. Future, CPQ platforms need to adapt fast and be creative enough to personalize their configuration of products.

2. With personalization comes predictive/proactive analytics playing a larger role in product configurations. Though it might get complex using CPQ, user errors will be minimized during the configuration process at CPQ.

3. With millennials reliance on mobility, we will soon get to see more of cloud-based CPQ platforms and responsive designs.

4. The collaborative ecosystem is fast evolving and companies are starting to have collective products across various platforms, distributed servers, and databases. The CPQ platforms of the near future will need to be open enough for data integration from diverse data sources of structured and unstructured data.

5. With personalization in products and configurations — futuristic technologies like AI and ML have started penetrating CPQ platforms and solutions.

Predictive & Prescriptive Pricing

In the past, it was always about knowing the customer well and offering a seamless experience. Now, Configure-Price-Quote (CPQ) moved a notch higher by providing optimal pricing rather than just the simple assemble-to-order pricing. Today’s CPQ has evolved more into predictive pricing technology which can also shift dynamically with the market to provide real-time, up-to-the-minute pricing information.

6. The next big game changer for CPQ will be the transition to a subscription economy. This will make CPQ more of a post-sale activity with support reps/bots helping the customer with self-service in B2B commerce. It will not be ‘buy and get done’, anymore but ‘land, adopt and expand’ economy.

7. Pricing behaviors are changing and they are changing fast. “Cost plus” or “Listless” pricing is no longer the norm for companies and customers. These old school approaches are soon going to be very dynamic, alive and an ‘at the moment’ thing.

8. Though there many exciting opportunities with AI and advanced pricing capabilities there are some potential pitfalls as well. Security and pricing lapses will happen, and the industry needs to prepare itself to be able to adapt effectively.

9. Pricing models will start to become much more dynamic based on personalized cues like location, time, surge pricing and product availability. Automated predictive and prescriptive pricing will start to evolve the platforms of the future.

10.In the near future, AI and ML-based models will start to redefine pricing and consumption. The CPQ platforms will start to get integrated with AI, ML, and Analytics models for effective consumption.

Quality Quoting

There was a time when sales reps had to understand the customer landscape, have various internal discussions, and seek approvals. The time between the first interaction to furnishing a quote typically used to take a week. However, today’s digital age demands much and faster cycles with various permutations/combinations of offerings configured intelligently for the customer. Essentially, CPQ automatically pulls in the configured products and pricing, tying the whole process together and ensuring consistency.

11. With online and cloud-based CPQ platforms the time to quote will be reduced significantly providing sales organizations a much better handle to sales.

12. Instant Gratification for sales teams is happening too with an efficient and effective quoting process. Sales teams will start to see an upsurge in sales with the adoption of CPQ.

13. The quoting process of the past was sometimes rigged with favoritism and persona-based specialized quoting. Sometimes companies wouldn’t even know if they were making net profits based on revenues. With automation in platforms, the chance of user errors will be reduced in a big way.

14. Cloud-based CPQ platforms will start to redefine the quoting process and will also help sales teams with any time, anywhere access to quote generation.

15. Though the approval process of quotes is important, the platforms of the future will be able to make intelligent and automatic decisions for the approval of the quote process. This will help improve the efficiency in the quoting process using rules-based engines or data-driven decisions.

Innovation in Industry — Insights

Technology continues to change and influence what customers expect. CPQ is emerging as a compelling example of how AI and machine learning can redefine the way products and services are designed and executed. Technologies like AI and IOT are turning CPQ into a self-learning machine that can deliver better and actionable insights and quickly mine huge volumes of data aggregated from varied sources.

16. With Next Generation Technologies like AI, Machine Learning and NLP — Hyper Individualization will improve sales.

17. With so many services, innovations, changing technologies, security is going to be the next hot trend in the CPQ arena.

18. Automatic renewals, integration of quotes and contracts with deal management are currently untapped areas. Though there are not many customers seeking intelligent and smart solutions, we will have many by the end of this year.

19. Voice, image, and video-based technologies will be integrated into the CPQ platforms of the near future. This will help in reducing sales cycles and improve revenues.

Final Thoughts

Right now, CPQ is experiencing a golden age. All basics are in place; Desired product mixes, the need for margin protection, and the need to deliver accurate quotes quickly along with cross-selling and upsell opportunities. However, the current solutions are trying to absorb the demand rather than adding power to the products. As the market becomes more tech needy and lucrative, vendors will begin to look for features that set them apart which will change the way CPQ used to look like and deepen its role.

Moreover, with personalization leading the way in all industries, the CPQ market is navigating in the right direction. Some of the top players who have really upped their CPQ game in terms of personalization are Oracle, Salesforce, Apptus, and SAP. Oracle is leading the market in terms of better UI, ease of use, integration, and customization.

Technologies like AI and IOT are playing harder and the future is not far off when we get to experience a new level of service and customer satisfaction where things are fixed even before they break and refills and resupplies happen automatically before we run out.

This post was written by Balaji Ramachandran, Founder & CEO of SoftClouds.His mission is helping clients understand Digital Transformation, CRM, Cloud, IoT, and AI, to stay ahead and ready for future trends. Bala has over 20 years of entrepreneurial and innovation leadership experience that has helped shape today’s CX software industry.

SoftClouds is a recognized leader in CRM/CX transformation with experience in numerous Service Cloud Implementations with pre-configured best practice business processes for multiple verticals/domains.

If you have any questions or would like to find out more about SoftClouds and our extensive experience, you can reach us at “marketing-at-softclouds-dot-com”.




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