So what is CPQ anyway? Those “in the know” would reply with “Configure Price Quote”, while those with no idea are likely to think “Confused, Posing Questions.” (See what I did there?)
Lets break it down: CPQ = Configure Price Quote
Configure: Businesses exist to provide either products or services (or both) to their customers. Some transactions are very simple and straightforward – go to Amazon, search for the book you want, and with a couple of clicks, the book is on it’s way to you. However, businesses that sell their products and services to other businesses generally have a somewhat more complex product to sell with some sort of customization to the products or services. The ability to customize those products and services is the “C” in CPQ – that’s configure.
Price: Once a company has received an interest in purchasing goods or services from a potential customer, they need to price out the request. In the SaaS world, this typically involves a complex combination of a usage-based measurement, a flat-rate (per company or per user) licensing fee, and when service-level agreements are also involved, there is likely a time-based measurement as well.
Quote: This is the manner in which a business presents the pricing of goods or services to potential customers. The quote should be presented in a manner that not only gives the customer all the details they need to understand the pricing but also the terms and conditions involved with the offer. For example, if it’s a customized product, how soon can it be ready for delivery? If it’s implementation of a customized software application, what are the detailed steps in the implementation process, who is responsible for which parts of the process, and what is the anticipated timeline for going live with the new application?
Now that you understand what CPQ is, you can simply install it and get moving, right?
Uh, sorry. No.
There’s a lot of configuring you need to do to CPQ before you can price and quote. (See what I did there?) Before you go too far, make sure you are working in the sandbox as much as possible before going live in production, so that you don’t cause any unexpected results. And certainly before you roll CPQ out to your end users, make sure you’ve tested everything and are seeing what you anticipated and that you are getting the results you expected.
Testing: This serves the purpose of validating all the behind-the-scenes work that goes into generating a quote for your customer. Are your pricing tables correct? Are all the correct products being added to the quote? Wait a sec…back that bus up. Before you even get to the point of creating a quote, you need to know who the customer is! Let’s take a detailed look at how to test CPQ.
Creating an Account and adding Contacts
|On the Account Object select New.||A new account layout should display containing fields for a the necessary account information.|
|Enter the required information and save.||Fields with * next to them are “required fields” and must be completed before continuing, such as [ * |
Account Name] – when all fields are completed, click save.
|New Account Created||After saving, your new account should be displayed on the Account page.|
|Create Contacts for the Account – From the Account Page layout, select Contacts on the related list, then select New.||After saving the new account, you should assign contacts to the newly created account’s related list. This is a critical step leading up to quote generation.|
|Enter the required information and save.||Fields with * next to them are “required fields” which must be completed before continuing, such as [ *First Name] and [*Last Name] – when all fields are completed, click Save.|
Creating an Opportunity for an Account
|From an existing or new account select Related List, then Opportunity, then New.||Creates a New Opportunity by displaying the fields to fill out for this specific opportunity.|
|Enter the required information and save.||Fields with * next to them are “required fields” which must be completed before continuing, such as [ * Opportunity Name], [* Close Date] and [* Stage] – when all fields are completed, click Save.|
|Go to your newly created Opportunity||You can find it by clicking the Opportunity Tab to go to the Opportunity page. Then start typing the name of your newly created opportunity in the Search Box on the right side of the page. You can also access it from the Account Page under the Related Tab in the Opportunities Section.|
Creating Quotes for an Opportunity
|When you’re ready to generate a quote, click the “New Quote” button on the top right side of the screen .||Before creating a “New Quote” be sure to enter information for: Primary – if the Quote you are creating is the primary quote for this opportunity be sure to check this box at the end of this process; Subscription Term; Start Date & End Date. Each field with have an “(i) bubble next to it, these will provide more information for each specific field.|
|Enter the required information and save.||Fields with * next to them are “required fields” which must be completed before continuing – when all fields are completed, click Save. Since this quote is made from the opportunity, it is now in relation with that specific opportunity for that specific account.|
Adding Products to a Quote
|Within the newly created Quote at the top of the page to the Right Side of the screen, click “Edit Lines”.||A pop-up screen will have you choose the Price Book you wish to use. If you haven’t created any, choose “Standard Price Book” then click save. You will then be directed to a new page called Edit Quote.|
|Once on the Edit Quote page click “Add Products” located in the middle/right side of the screen.||Select the desired products & Save.|
It’s important to note that if your products are not active or not assigned to a pricebook, they will not display as options.
|Update the Pricing if needed and click Save.||After saving you will be redirected back to the Quote.|
Preview Quote Templates
|On the top right side of the screen, Click “Generate Document” Button. If there are multiple templates, select your desired template from the dropdown.||Once directed to the new page for “Generate Document” click “Preview” on the top right of the screen.|
|Review the template for accuracy.||If correct click, “Save” It will then be saved under “Quote Documents” in the related tab.|
|DocuSign can be used for these templates to obtain signatures.|
|On the Quote, Details Tab, check the box for Primary and then On the Opportunity, check the box for Contracted||A contract should generate – you may need to refresh the page in order to see the new contract.|
|From the Contracts screen, Related List Quick Links, click on Subscriptions.||You should now see the subscription lines on this contract. Review the subscription lines for accuracy against subscription products from the opportunity.|
|From the Contracts screen, Details section, verify that the Contract Start Date matches the Quote Start Date, and that the End Date is calculated based upon Contract Start Date and Quote Subscription Term.|
|From the Contract, Check the box for Renewal Forecast.||This will create a renewal Opportunity, with a Quote. This is helpful for renewing the actual renewal amount which reflects all the subsequent changes & amendments that have happened to the contract.|
|From the Contract, check the “amend” quick action located on the top right corner.||This will populate you to the subscription lines that you want to amend. Check if those are the correct products to amend.|
|Review the details for accuracy and when satisfied, select Save.||On the ‘Quote’, under the ‘Opportunity’ field, it should show, ‘Amendment for contract #(unique number)’|
We hope that this post has given you a new appreciation for CPQ, and how involved it can be to configure and implement. Please reach out to us at email@example.com to discuss how we can help your business move forward.