CPQ

CPQ software lets a sales team configure a complex product against engineering rules, price it and issue a quote. It is common in manufacturing and B2B, where the product may be a machine with hundreds of dependent options and the buyer rarely touches the tool.

It shares a word with the 3D configurator on a product page, and the two are sometimes connected, with the visual configurator feeding a choice into CPQ for the quote. CPQ is used by the sales team. The 3D configurator is used by the customer on the product page. They can be connected, and each works without the other.

A retailer looking for the product page tool should search for a 3D or visual configurator; searching for CPQ finds enterprise sales software.

What CPQ does, step by step

Configure. The sales representative picks the options of the product, and the software checks each choice against the rules: this motor needs that frame, this width is not available with that door. A rule set for an industrial product can run to thousands of lines, maintained by engineering.

Price. The software prices the configuration from price lists, discounts, the customer's contract and the currency, and produces a total the representative is allowed to offer.

Quote. It writes the quote document, routes it for approval if the discount needs one, and passes the accepted order to the order system with every option recorded.

The buyer in this picture is a company, the seller is a person, and the tool is on the seller's screen. There is usually no picture of the product at all, or a static drawing.

What 3D CPQ means

A 3D CPQ setup puts a 3D product configurator in front of the CPQ engine. The same arrangement, with any picture of the product in front of the quote, is also called visual CPQ. The buyer, or the representative sitting with them, builds the product on a model they can turn: the cabinet at its width, the machine with its options fitted, the sofa in its fabric. The configurator passes the chosen options to CPQ, which checks the rules, prices the combination and issues the quote. A picture of the configured model can go on the quote and on the order confirmation.

The gain is on the buyer's side. A buyer who has turned the model round knows what they are ordering, which a list of option codes does not show them, and fewer orders are returned because the product was not what the buyer had in mind. The rules stay in CPQ, where engineering maintains them, and the configurator asks CPQ rather than keeping a copy.

Our 3D CPQ page shows the whole of it on a parametric shed, with the quote as a PDF the buyer saves. Our demo page shows the front end of this: the dining chair and the garden set carry a live price that follows the options, and the shed shows delivery weeks as well as the price. In the car demo the configuration can be saved as a link that opens the same car, which is what a quote needs to carry.

Which one a shop needs

A shop selling to consumers from a product page needs a product configurator, and on most platforms the configurator writes the order straight into the shop. CPQ is for made-to-order and B2B products where a person quotes, the rules are many, and the price depends on the customer. A shop that does both, a kitchen maker selling to consumers and to builders, for instance, may run a 3D configurator on the site and connect it to CPQ for the trade side. Our article on pricing rules and lead times covers how the rules are set up in the configurator itself when there is no CPQ behind it. For a made-to-order furniture range, our article on CPQ for furniture brands covers the quotes and the costs.

Questions

What does CPQ stand for?

Configure, price, quote. It is sales software that lets a representative configure a complex product against its rules, price the combination and issue a quote.

What is 3D CPQ?

A CPQ setup with a 3D configurator in front of it. The buyer builds the product on a model they can turn, and the configurator passes the chosen options to CPQ for the rules, the price and the quote.

Is a 3D configurator the same as CPQ?

No. A 3D configurator is the shopper's tool on a product page. CPQ is the sales team's tool for quoting complex orders. They can be connected, with the configurator feeding CPQ, but each works without the other.

Does an online shop need CPQ?

Usually not. A shop selling from a product page needs a product configurator that writes the order into the shop. CPQ is for made-to-order and B2B products where a person quotes and the price depends on the customer.