Quick definition
CPQ acronym stands for Configure, Price, Quote. The term is used in business to describe software systems that help sales reps quote complex and configurable products.[1] Although CPQ is not a new concept, the today’s highly competitive business environment along with the current wave of digital transformation and the ever growing needs of customers for personalization, made CPQ software the newest trend in sales optimization tools. CPQ is the link between departments, since it lies between the front office and the back office, helping companies to generate professional proposals and quotes tailored to prospects’ expectations.
Instead of having to use detached tools, like emails and Microsoft Word, or dig through various spreadsheets looking for information related to the customer, sales reps can communicate with prospects and send proposals and quotes in record time with a CPQ. The overall purpose of a CPQ system is to automate and streamline the sales process, reduce administrative tasks, and ensure the quick delivery of accurate proposals and quotes. This way, the sales cycle becomes seamless and without bottlenecks. Moreover, by accelerating the proposal and quote configuration process, sales reps are able to offer a better customer experience and thus have a better chance at establishing a more positive relationship with the customer and finally a higher likelihood for a successful deal.
How does a CPQ work?
Businesses implement a CPQ solution to enhance their sales efficiency and velocity. In order to get a better understanding of how a CPQ works, we briefly describe the three core steps it follows, i.e. Configure, Price, and Quote.
1. Configure
Configure refers to the configuration of products to meet the individual needs of a customer from the beginning. Tailor-made services that deliver a personal experience make the customers feel unique and leave them with a sense of satisfaction. This way they feel more connected to the company fostering brand loyalty.
2. Price
Price management allows sales people to choose between service options and packages, as well as offer discounts. Modern CPQ solutions incorporate Artificial Intelligence (AI) and Machine Learning (ML) to understand market patterns and determine customers’ willingness to pay ensuring that your margin targets are being achieved.
3. Quote
Quote generation guarantees everything comes together in a way that is branded, legally compliant, and contains all necessary information to help sales reps close the deal.
So, a CPQ provides a standardized sales process where each step is carried out with precision. This automation makes you look like a true sales professional with solid processes, allowing you to gain customer trust and loyalty.
The sales funnel with CPQ in the middle
CPQ usually works in conjunction with other enterprise systems, such as CRM or/and ERP, in order to help businesses become more efficient and productive in sales management within an integrated environment. Nevertheless, it can also be implemented as a standalone system incorporating some of their basic functionalities.
The typical sales process starts in the front office with leads, prospects, and opportunities entering a CRM system. Then, the qualified opportunity may result in a Request For Proposal (RFP) or a Request For Quote (RFQ). As a response to such a request, the sales team uses a CPQ software to create proposals and quotes tailored to the customer expectations.
After initially providing a CPQ document (RFP or RFQ) to the customer, any negotiations that take place before the customer accepts an offer can be managed either within a CRM, or within a CPQ to track changes. Finally, the CPQ document can be converted to order and then sent to ERP for order fulfillment and invoicing. This way, the CPQ document will have an established link to the back office ERP order, just like it did with front office CRM opportunity.
Essentially, CPQ software allows communication and configurations to take place seamlessly in one place. This way, implementing a CPQ solution will make the workflows between sales and operations smoother, allowing to provide a positive customer experience.
Why travel industry needs a CPQ?
The ever-increasing competition in travel sales has demanded highly specialized and customized services. In the past, travel pros used to sell the same exact package or service to every traveler, but one-size-fits-all in no longer a reality. For travelers, this is great news, since they end up receiving a personalized proposal or quote crafted specifically for them. For travel pros though, this new environment allocates overheads and creates a lot of complications in their daily workflow. Let’s break down a few reasons why travel industry needs its own CPQ solution.
Travel and hospitality are fast-paced markets. Travel businesses offer nowadays a much wider range of services than they used to, making the sales process quite challenging. Furthermore, preparing proposals and quotes involves bringing information from multiple sources together, ensuring that they are up-to-date and compliant with the current business goals and financial targets. As a result, RFP and RFQ processes can be highly time-consuming. In addition, prospective travelers often request quotes from more than one vendor, while their decision is heavily influenced by the fastest response according to research. So, fast response times is a valuable asset for every travel business and a CPQ software can assist you to quickly prepare and send accurate proposals and quotes, even if you have complex package configurations and pricing models.
Beyond that, travelers are a demanding audience. In order to convert, the travel proposal needs to be visually attractive, commercially competitive, and it needs to reflect the cost of the undertaking work. Furthermore, personalized and media-rich travel proposals and quotes with engaging destination content are regarded as a catalyst for today’s travel sales. Towards this direction, CPQ aims to configure service offerings that will fit exactly with the traveler expectations. On top of that, a CPQ software can also detect cross-sell and upsell opportunities that some travel pros might not be able to recognize and thus help to configure services in the most optimal way for boosting profitability (e.g. bundling).
Information plays a big role in the tourism industry and in the era of digital transformation, Big Data are assumed to be a source of a competitive advantage and differentiation. Nevertheless, travel businesses conventional tools are not able to handle, let alone leverage by uncovering hidden patterns. A modern travel CPQ can assist users with meaningful analytics and reporting to empower your business intelligence (data-driven decision-making), or even provide suggestions to improve the entire process. Moreover, previous proposals and quotes remain always available in order to assure that experience is retained in the travel business. As a result, proposals and quotes can take advantage of the accumulated practical knowledge and thus have a lower opportunity for omissions and a higher probability to convert.
A travel newsletter or a direct marketing campaign are effective ways to engage your leads and promote your services, while providing useful, updated, and relevant information. A travel CPQ allows you to quickly and efficiently send out attractive proposals to hundreds of travelers around the world. What’s more, you will be able to monitor and track your proposals (e.g. check if recipient has seen it), meaning that you will be able to understand better your leads in order to perform more productive follow-up actions in the future.
The obvious overall benefit of implementing a travel CPQ solution is the automation within the travel sales process. This way, it removes the risk of human error and opens up more time for travel pros to focus on creating connections and establishing a mutually beneficial relationship with the prospective traveler. Now there’s a fast, easy way to streamline travel configuration, pricing, and quote generation. Luckily, Travel2Fit exists.
Benefits of a travel CPQ
Studies show that companies using CPQ solutions enjoy speed, accuracy, and efficiency in the sales cycle, since reps can respond rapidly to proposal requests, generate complex quotes promptly, and avoid “indecision” sales losses. Your business can count on experiencing tremendous advantages if you choose to optimize your travel sales cycle with a travel CPQ solution like Travel2Fit. Here are a few:
- Increase lead conversion rate
- Send more proposals and quotes to potential customers (increase capacity)
- Enjoy a smooth, seamless, and shorter sales cycle
- Improve sales process inefficiencies and eliminate errors
- Send proposal & quotes with approvals (integrated approval workflows)
- Shorten response times to customers’ requests
- Gain upsell and cross-sell opportunities
- Provide better customer experience and higher satisfaction
- Reduce administrative tasks
- Ensure team members are aligned
- Gain a higher ROI (profit on any given direct sale)
The beauty of CPQ software is that it takes care of the entire Configure, Price, Quote process with potential customers, giving sales teams more time to focus on building and establishing a good relationship, and offering a positive customer experience. Overall, a travel CPQ solution can act as a time saver for travel businesses and their sales department. And time for sales quite literally means money.
Conclusion
Travel2Fit’s cloud-based CPQ can help travel companies sell more, faster, and smarter. With Travel2Fit, there’s little to no learning curve, while the CPQ process becomes part of the sales pipeline. Our tool has an intuitive user-interface (UI), which allows to enhance operation efficiencies by cutting down sales cycles, simplifying approvals, and eliminating errors. Even junior travel professionals with little experience can easily learn how to CPQ properly and enjoy its benefits. Furthermore, Travel2Fit provides the possibility to cross-sell and up-sell your services, while it protects your profit margins with a flexible subscription model (commission-free). On top of that, proposal templates are customizable, ensuring that they meet your company’s branding standards. All these features impress the travel prospects, and make it more likely that you will get an emphatic “yes” as an answer for your proposal or quote. Do yourself a favor, automate where you can and accelerate from opportunity to revenue with the power of Travel2Fit software!
If you have any questions about implementing our CPQ solution, just contact our Support team or book a demo and see for yourself.
