Making deals when selling an off-the-shelf product is relatively straightforward since you have a set price the customer can see for themselves. However, the process is more complicated when you sell complex or customizable products and services.
Tools like customer relationship management (CRM) and configure, price, quote (CPQ) software can streamline your deal-making.
In this article, you’ll learn the roles of CPQ and CRM systems and how they differ. You’ll also understand the benefits of integrating these systems and get practical steps to connect your CRM and CPQ for maximum efficiency.
CRM refers to the business strategies used to manage customer interactions and data. The goal is to build stronger business relationships and increase sales.
Learn more about what is CRM in our dedicated article.
What is CPQ?
The meaning of CPQ involves three key steps: configuring the product to meet customer needs, pricing it accurately based on various factors and generating a formal quote.
This CPQ meaning is especially relevant in industries with complex products, ensuring customers receive precise and timely quotes for their specific requirements.
CPQ systems make it easier to configure product offerings, determine accurate pricing and generate professional quotes. They streamline the process, ensuring every quote meets the customer’s needs while aligning with your pricing rules and approval processes.
Pipedrive research reveals only 54% of respondents spend most of their day selling. CPQ software helps your reps reclaim that time and hit sales targets.
Here’s how each element works.
Configuration
CPQ software allows your sales team to configure products or services based on customer needs.
The configuration element includes a guided selling interface. You input product details, pricing rules, dependencies and other relevant information. The interface leads your sales team through questions and choices to help them select the right product options and combinations.
By automating the configuration process, CPQ software reduces the risk of errors, ensuring the final product meets both customer expectations and business standards.
Pricing
CPQ software simplifies pricing by applying the relevant rules, discounts and margin calculations to the configured product or service.
Pricing can be challenging for sales teams, especially if they balance closing sales with maximizing revenue. If a salesperson offers a significant discount to close the deal, they may cost the company revenue and set a risky precedent for future deals. On the other hand, if the rep is too cautious about discounts, they could lose valuable sales.
CPQ software allows you to implement strategies like tiered pricing, volume discounts and customer-specific pricing. Different CPQ systems can also factor in market conditions and competitor pricing to ensure you offer the best value.
Quoting
At the end of the process, CPQ software compiles the configured products and their corresponding prices into a professional, branded quote.
Automated quotes save time and keep the sales process moving. Sales teams can also tailor their quotes with personalized messages or updated terms and conditions.
CPQ systems often include built-in approval workflows, so quotes requiring special pricing or discounts receive internal approvals before going to the customer.
The quoting feature also typically includes version control, which allows sales reps to manage revisions and track changes made during the quoting process so all stakeholders have access to the latest information.
The benefits of CPQ include:
| Benefit | Description |
| Reduced quoting errors | CPQ software minimizes the risk of errors by following your company’s guidelines to ensure every quote is accurate and compliant. |
| Increased sales productivity | CPQ systems automate the time-consuming tasks involved in providing a quote. By eliminating repetition, the software frees up your sales team for higher-value activities. |
| Accelerated sales cycle | CPQ software enables sales teams to generate accurate quotes quickly. With fewer manual steps and faster approvals, your team can close deals faster, reducing the time from initial contact to final sale. |
| Enhanced customer satisfaction | CPQ systems enable sales teams to deliver tailored quotes in less time, leading to higher customer satisfaction and improved loyalty. |
| Improved compliance | CPQ software helps businesses maintain control over pricing and discounting. The system prevents unauthorized discounts and ensures all quotes align with the company’s profitability goals. |
What’s the difference between CPQ and CRM?
While both CPQ and CRM systems are sales tools, they serve distinct roles within the sales process. By understanding the differences between the two systems, you can use these tools more effectively to optimize your sales strategy.
Relationships are essential at every stage of the customer journey, making CRM software valuable throughout the sales process.
However, when you reach the bottom of the sales funnel, CPQ software gives you the tools to close the deal.
Download our customer journey map template
Here are some of the differences between these two sales tools:
| CRM | CPQ |
| Designed to nurture customer relationships. | Designed to streamline product configuration, pricing and quoting. |
| Used throughout the sales process. | Used in the middle to late stages of the sales process. |
| Used by sales, marketing and other customer-facing teams. | Used by sales reps and sales engineers. |
| Core features include contact management, pipeline management, sales automation and reporting or forecasting. | Core features include product configuration, automated pricing, quote generation and approval workflows. |
| Integrates with marketing automation, customer support, business intelligence and sales tools. | Integrates with CRM, ERP (enterprise resource planning) and order management systems. |
| Improves lead management, customer segmentation and communication. | Improves quote accuracy, speeds up deal closure and ensures pricing compliance. |
| Centralizes customer data for better decision-making. | Centralizes product and pricing data for accurate quotes. |
Although CRM and CPQ systems have different focuses and functionalities, they play similar roles in sales.
Combining CRM and CPQ systems allows you to create strong relationships from first engagement to final sale.
Choosing the right CRM and CPQ software
Given the many CRM and CPQ solutions on the market, you must consider your options carefully. Evaluate each system based on business needs, industry requirements and CRM integration capabilities.
Evaluating CRM systems
When choosing a sales CRM, consider the features that best support your sales, marketing and customer service operations. We've already covered contact and pipeline management, as well as reporting–features found in most CRMs. In addition, look out for these factors:
Scalability and pricing. Some CRMs limit features on the cheaper plans. For example, you’ll only be able to use one pipeline or a basic integration unless you purchase an add-on. Others don’t have plans suitable for smaller organizations, so you pay for features you don’t use. Review the CRM pricing to ensure you get what you need and avoid unexpected costs.
Customization. Every business is unique, so tailor your CRM to your workflow. Look for a customizable CRM that can modify pipelines, fields and stages while supporting multiple products, currencies and languages.
Integration. Your CRM will work best when connected with your other sales tools and software. Ensure any potential solution offers integrations for your favorite apps so you can share information between different platforms (including your CPQ system).
Intuitive interface. Look for a user-friendly CRM. A CRM with many advanced features may seem ideal, but if it’s too complex, your sales team will take longer to onboard or may even avoid using the system.
Good reviews and a free trial. Check out independent reviews on platforms like G2 and Capterra to see how other sales teams fared. Sign up for a free trial to experience the CRM in action.
Evaluating CPQ systems
Choosing the right CPQ system requires careful evaluation to see how it integrates with your CRM and other tools.
If you’re new to CPQ software, understanding how it handles each core function is the first step.
Here’s what to look for when it comes to configuration, pricing, quotes and integration:
Configuration. Any CPQ system you consider should offer robust configuration features that allow your sales teams to prepare complex products or services easily based on customer requirements. Look for guided selling tools that help reps navigate product options and rules.
Pricing. A quality CPQ system supports volume discounts, subscription models and tiered or customer-specific pricing. It should also automate calculations for accuracy and consistency.
Quotes. Look for systems with customizable templates, version control and an electronic approval process.
Integration. Confirm the CPQ software integrates with your CRM and any other relevant systems. A good integration will maintain a seamless flow of information from sales to production and fulfillment. For example, Pipedrive has out-of-the-box integrations for CPQ solutions like GleanQuote, Mobileforce, Qwoty and Quoter.
5 benefits of integrating your CPQ and CRM systems
CPQ and CRM software are powerful tools individually, but integrating them makes the sales process smoother for your reps and customers.
Here are some reasons to connect your CPQ and CRM software:
1. Unified customer and sales data
Integrating your CRM and CPQ technology means all customer information, product configurations, pricing and quotes are in one centralized system. Integration eliminates data silos, reducing the risk of discrepancies between the information stored in the CRM and the data used in the CPQ system.
With all relevant data in one place, your sales teams get better visibility into customer history, preferences and previous interactions. As a result, they can tailor their sales strategies more effectively. Reps can identify appropriate cross-sell and upsell options, creating more revenue-generating opportunities.
2. A more streamlined sales workflow
Any obstacles or sources of friction in the sales process can frustrate prospective customers and stall the deal. On the other hand, a fine-tuned workflow simplifies things for your sales reps while improving the customer journey.
Combining systems creates a smooth transition from the CRM’s lead management to the CPQ’s configuration and quoting stages. With no lost or duplicated information, there’s less need for manual data entry. Your reps can then focus on the customer, not the pricing.
3. Increased quoting accuracy and speed
Creating a quote traditionally involves many steps, from checking prices to getting approval for discounts. Integrating CPQ tools with your CRM minimizes the manual steps in generating quotes.
Automated workflows ensure every quote is accurate and adheres to the company’s pricing policies. With integrated systems, your sales force can pull customer and product data directly from the CRM into the CPQ application, speeding up the quote generation process and increasing the odds you’ll close the deal.
4. Enhanced sales forecasting and reporting
Integrated systems combine data from CRM and CPQ systems to provide a more complete picture of the sales pipeline. You and your team have more insight into sales performance, allowing you to spot potential bottlenecks and make smart decisions based on real-time data.
You can forecast future sales more precisely with detailed reports on product configurations, pricing trends and customer behaviors. Reliable sales data allows for better resource management and strategic planning, aligning your sales efforts with high-level business goals.
5. Better compliance and control
Integrated systems reduce the risk of errors or unauthorized changes that could lead to non-compliance with internal or external regulations. Keeping both systems connected helps maintain your sales operations and integrity, ensuring all transactions are compliant and well-documented.
Integrating CPQ with CRM also lets you maintain consistent pricing and discounting that meets company policies. Approval workflows within the CPQ system trigger automatically based on CRM data, allowing you to control pricing decisions.
How to connect your CPQ and CRM
The process to connect your CPQ and CRM software depends on the specific software used. Here are a few options for getting your systems to work together:
Native integrations
Many CPQ and CRM systems offer native integrations that work out of the box. They are typically easier to set up and require less technical expertise.
Since the vendor develops and supports them, native integrations often have built-in support and documentation. There’s less risk of compatibility issues since the integration updates regularly, which keeps things running smoothly.
Third-party integrations
Third-party integration platforms like Zapier provide a flexible way to connect your CPQ and CRM systems.
These platforms usually offer a high degree of customization, allowing you to tailor the integration with different triggers and workflows. They also support applications beyond CPQ and CRM, enabling broader integrations across your sales stack.
As your business grows, third-party platforms can adapt to new requirements. For example, you can adjust the integration to support additional applications or more complex workflows.
Many platforms require a subscription fee depending on the number of applications connected and the volume of data processed. Keep those costs in mind when considering the best integration for your needs.
API integrations
Custom API (application programming interface) integrations offer flexibility for businesses that use customized systems. APIs provided by your CPQ and CRM vendors allow you to connect the two systems however you want.
For example, most APIs are flexible enough to handle CPQ or CRM systems with specialized features or complex data transformations. You have full control over the process, including when and how data transfers between systems.
Note: API integrations demand a higher level of technical skill. They often require your development team or an external consultant to configure them, resulting in a longer setup process. Custom API integrations need regular monitoring and maintenance, especially as your systems evolve.
What does CPQ mean in business?
CPQ stands for "Configure, Price, Quote," a business process primarily used by companies offering complex products or services.
CPQ software helps sales teams streamline the process of configuring products or services to meet specific customer needs, accurately pricing those configurations based on different factors such as discounts or special promotions, and quickly generating professional quotes to present to the customer.
By automating and simplifying these steps, CPQ tools enhance sales efficiency, reduce errors and improve the overall customer experience. CPQ systems are particularly valuable in industries where customized solutions are the standard, such as manufacturing, technology and telecommunications.
Final thoughts
Developing accurate pricing and sending custom quotes can be complicated. Integrating CPQ and CRM systems brings together the best of both worlds – enhancing sales efficiency, accuracy and customer satisfaction.
By connecting data, nurturing leads and streamlining the sales process, you can accelerate the sales cycle and increase revenue while building meaningful relationships with customers.
