What is CPQ and why should B2B companies use it

What is CPQ and why should B2B companies use it

Ida Hallmén, Content Manager
Ida Hallmén, Content Manager

A tool that both speeds up and streamlines the sales process, increases the competitiveness of companies, provides more satisfied customers and increases sales. Does it really exist? Yes, unbelievably it does. It may sound too good to be true, but the fact is that more and more companies use CPQ systems today. It has been shown that companies that invest in a CPQ system quickly gain a competitive advantage. Companies in all industries that want to increase their competitiveness should therefore memorize the three letters: CPQ.

What does CPQ mean?

CPQ stands for Configure Price Quote and is a collective name for solutions that enable companies to quickly generate quotes when selling complex and configurable products. CPQ can also be used by companies that offer tools where the customer can customize their product, through so called configuration, where the price and quote varies depending on what options and adjustments the customer makes.

Using a CPQ tool has many benefits. It facilitates the whole sales process and saves companies a huge amount of time and resources. In addition, it minimizes incorrect orders that can otherwise easily occur, resulting in fewer returns. By handing over a large part of the work to the customers, commitment and shopping experience also increases, which leads to both more satisfied customers and increased orders.

Before CPQ tools existed, a process like buying a house could be a very cumbersome project, not least for the seller. When all the choices had been made and the offer was ready, the customer could suddenly request a different type of wood in the living room. The sales representative then had to update the quote manually. If the seller had a hundred customers who all wanted to make small changes all the time, the salesperson had to sit all day with a job that could easily have been done by an application. The streamlining is one of the biggest reasons why a CPQ tool is worth its weight in gold for many companies. In short: A CPQ tool improves and streamlines the entire buying process.

How can B2B companies benefit from CPQ?

When it comes to B2B companies, their customers usually want to make informed decisions and discuss with each other internally before making a purchase. For such companies, a CPQ tool is therefore invaluable, not least when it comes to moving knowledge closer to the buyer and to automate the sales process.

In many cases, it can also be a matter of wanting to reduce a bottleneck. A company has a certain number of salespeople and must constantly increase their sales goals. Instead of hiring more salespeople, a large part of that work can be transferred to the customer. The customers can then do the pre-work themselves and the seller doesn’t have to get involved until later in the process.

Investing in a CPQ tool benefits both the company and the customers. When the customer can configure their product on their own, the understanding of the product increases and the chance that the purchase will be right is more likely. This leads to fewer returns and more satisfied customers. In addition, the CPQ tool generates a quote directly, which means that the customer does not have to wait for the price information and the seller can spend time on other things. Investing in a CPQ tool is beneficial for your company in many ways:

With a CPQ tool, companies can streamline sales by letting customers do more of the sales work themselves. This means that a salesperson can handle more customers, which in turn means more business. Since CPQ automates the quotation flow, the company avoids the resource- and time-consuming process of making advanced calculations, which simplifies and speeds up the entire sales cycle. In addition, the risk of faulty orders decreases and the returns will be fewer.

It is also very much about creating a competitive advantage. When a competitor has a CPQ solution, you have to get one yourself. The customers want to do more themselves and a CPQ solution helps with that. Today, you may not meet your customers in the same way as before. There is a greater need for digital tools to handle sales. The pandemic has also increased the demand for online shopping.

Another important reason why companies should use CPQ tools is about customer satisfaction. If a company offers a CPQ tool where the customer can configure their product themselves, the customer becomes more involved and also comes much closer to the purchase, compared to if the customer has to contact a salesperson who will try to interpret what the customer wants and then putting together a product that may not be optimal for the customer. Since dissatisfied customers make more “noise” than satisfied customers, it is good from a marketing perspective to be able to eliminate the dissatisfied ones. If you succeed in doing so, you are in a very good position to get a fantastic reputation.

If the customer can configure, click around and compare different choices until the product is perfect, the customer satisfaction increases enormously. This in turn can lead to the customer buying something that is more expensive and better than what was intended from the beginning. The chance that the customer buys a more expensive product increases if the customer feels satisfied. The company can then sell at a higher order value, it becomes a win-win situations. In addition, the company does not have to spend money on a salesperson to administer everything, the CPQ tool takes care of that.

Who can benefit from CPQ?

CPQ has previously been used by larger companies in the manufacturing industry, but is now becoming more common even in smaller companies. There is no industry that won’t benefit from a CPQ. If you go outside and look around, pretty much everything around you is configurable.Your house is configurable, your carport is configurable, your car, your bike. Even your garden is configurable. What is not configurable then? All static products such as a liter of milk or a piece of meat.

How much you can benefit from a CPQ system is more about the type of product you sell than the industry you operate in. There needs to be some kind of complexity. The complexity can either be that the product itself is complex or that the combination of several products forms a whole that is complex. If you buy a bed, you may not say that it is configurable, but the purchase still means that you need to make some choices, such as choosing a headboard, bed mattress and bed legs.These are fairly simple configurations that you may not need to have a configurator for but if it’s about an entire room and the placement of the bed in the room, everything suddenly becomes more complex. Does it look good to place the bed along that wall? And what if we add a table next to the bed and hang a lamp above? It can be difficult to imagine the whole of a room when it comes to the placement of multiple objects.

Say you are going to buy a liquid chromatography system. Then there are a lot of different choices depending on what it is to be used for. Do you need a flow meter? And a pH meter? It can quickly become complex.

It can also be about other products such as doors, shelves and drawers which are quite simple products in themselves but which should form a whole that becomes complex. If you are going to build a storage system with rails and shelves, it can be difficult to get an overview of what it will look like, and how do you know that the right number of screws will be included in the order? A classic scenario can be that you’re standing in a hardware store, counting in your head and wondering if you have received all the gadgets or if something is missing. Once home, you will discover that one third is missing.This is where the CPQ system enters the picture. It also keeps track of all the boring but important details that are related to the purchase.

Vehicles and transportation

When it comes to vehicles, the customer may need to make different types of choices. Choosing rims for example. There may be a complexity like “If you choose this package then you can not choose these rims” and so on. Here, a CPQ system can be very helpful.

Life sciences (or MedTech)

In life sciences, it may be more about what your needs are. If you are going to produce a certain amount of something every year and have certain parameters to consider, what kind of product do you need then? A CPQ system and configuration can solve this problem based on the existing needs.


Manufacturing companies may have a need to make accurate drawings based on special dimensions in order to be able to manufacture a product. This is where the configurator comes into the picture. It calculates everything so that the seller doesn’t have to do it. There are slightly different approaches depending on which industry you belong to and what kind of needs exists in each industry.

Benefits of Animech CPQ

There are a couple of different reasons why Animech stands out in the market. When it comes to building 3D configurators with real-time 3D support, Animech belongs to the absolute front line globally. A few of the great benefits that Animech’s solution provides are listed below:

Another big advantage of Animech’s solution is that it can be used both by the salespeople at customer meetings and by the customers themselves. Another advantage is that it does not depend on any large server-side system. If a customer changes a parameter in for example a greenhouse, it does not need to be calculated and sent back through a server. Everything is done directly in the browser. We also have the opportunity to package it so that it can either be run on the web or as a stand-alone application. Some customers need both. We are really passionate about what we do and we want to show the industry that visual configuration is the goal. Everyone who works at Animech is so convinced about this and that makes us want to make everyone understand that if you don’t choose this then you have made the wrong choice. The commitment of the employees at Animech is very valuable for our customers.

Support for multiple currencies

If you do e-commerce, you can get a huge global exchange, because you post something online that customers all over the world can buy. Animech’s CPQ tool handles everything from languages to currencies and also keeps track of IP numbers and where the visitor comes from. If the visitor comes from England, the system shows the price in pounds and if the visitor comes from Germany the prices are shown in euros and the system generates a quote in German from a German retailer.

Integrate with existing systems

Many of the problems that Animech solves and much of what makes it attractive to invest in a CPQ system is that you can automate processes from quotation to order, perhaps all the way out to production. If you don’t integrate the CPQ system with a business or CRM system, you will be sitting with manual processes. If you have a quote from the configurator that you need to put into a separate order system, the quote must be manually transcribed. It is simply a huge time saver to have the entire flow automated and digitized.

So what is the conclusion of this?
A CPQ system can do wonders for different kinds of businesses and is increasingly used by both large and small companies. The benefits are far too many to not invest in a CPQ system. Aren’t they?