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  • Writer's pictureIryna Yamborska

What is Salesforce CPQ? Detailed overview of features and benefits

For each business, it’s essential to quickly and accurately deliver quotes to the leads. But companies that sell highly configurable products or simply practice special conditions of cooperation with partners and customers often face a big challenge in delivering quotes fast and without mistakes. Salesforce CPQ application helps facilitate customized orders, save sales reps time, reduce costly errors and improve customer experiences.

Today we will get acquainted with one of the most popular Salesforce applications - CPQ. We will discuss what tasks a business can solve using this application, why it is more convenient than the standard Salesforce functionality, discuss its basic functionality, and take a closer look at CPQ discounting tools and CPQ pricing methods.

What is Salesforce CPQ?

What is Salesforce CPQ | Sparkybit Blog

CPQ stands for Configure, Price, and Quote. CPQ software is an extension of Salesforce CRM, created for configuring the prices of products or services. CPQ is a perfect tool for sales optimization, while complex quotes for customers take into account even the smallest details of your deals and client's requests. The CPQ tool automatically generates quotes much faster than any sales rep would ever do manually. Have you agreed with your customer that they buy 89 vacuum cleaners and get one extra? It's already in your quote. Does your customer need a faster delivery and is ready to pay extra for that? Done!

For example, you have different customers: there are those who purchase apiece, those who buy 10 pcs and 100 pcs. Hence you charge them different prices: 100, 90, and 80 dollars let's say. In the standard behaviour of Salesforce, you need to make three price lists to charge three customers differently.

When you set up Salesforce, you add their products you sell and their prices. And then, when the sales team member forms a quote and adds these products there, Salesforce automatically pulls up the prices from the price list, multiplies them by the quantity, and then the sales team member sees the amount of money the client is supposed to pay. It seems like you don't need some extra automation for that, right?

Salesforce customization | Sparkybit Blog

Of course, you're right. But CPQ allows dealing with quotes automatically: more flexible and less time-consuming. And what if you have three different types of customers, then quote creation requires more movements and steps because then the sales team must create three price lists, then the manager, when forming an offer to the customer, must remember that this customer should pay the exact price list.

Of course, the human factor - errors can occur. CPQ allows you to configure that.

Yes, you also need to spend time on that, but you do it once, get one price list, and various automation tools are configured on it, which generate the correct price depending on the number of purchasing goods, for example, or any other factors. Sometimes the partnership/ customer agreement implies special conditions of cooperation, and such companies/ buyers should be removed from the general list. In this case, you configure the automation tools in a way to let Salesforce understand that this exact account has a special price there. Imagine any of your quote-related desires and dreams come true.

Benefits of Salesforce CPQ

According to McKinsey research, more than 30% of sales-related activities can be automated. Getting closer to our topic, a McKinsey study says that 43% of configuration, pricing, and quoting tasks (such as quota setting, the configuration of technical solutions, negotiation, and contracting) can be highly automatable with today's technologies.

Sales process automation frees up valuable time of your employees, who can now devote more time to sell, closing deals, and managing leads.

Configure Price Quote (CPQ) is an excellent sales tool that helps companies to create configured error-free sales quotes for customers. CPQ software speeds up dealing even with the most complex quote. Also, CPQ helps you to:

1. Avoid price-related errors

Salesforce CPQ keeps track of all the information about policy and price changes and improves accuracy.

2. Speed up quote creation

Integrate CPQ with various business applications to operate with the most information about your customers, and don't lose valuable details.

3. Sell more: up-sell and cross-sell

With Salesforce CPQ product bundle, the sales reps always know what else would be useful for your customer. CPQ tracks customer preferences and gives matching recommendations.

4. Simplify the selling process

The guided selling feature allows to collect customers' data from prospects and then preparing more accurate quotes with improved order accuracy.

CPQ Discounting Tools

Discounting Tools allow automatically apply discounts to the price of products in a quote based on the terms of the agreement. First of all, to understand how CPQ works, you should know that CPQ operates the following price types (means a set of fields on the Quote Line object that determine the price of the product for the consumer; just in case: Quote Line is a Junction object between Quote and Product).

CPQ Discounting tools fields and values | Sparkybit Blog

At this point you should be familiar with one more term - "the price waterfall". This means that these prices work like a waterfall: from top to bottom. For example, if Special Price is calculated, then the Regular Price will be calculated as a Special Price minus the volume-based discount.

And here comes one more term - "product bundle". Let's look at this question practically. For example, you are selling printers. As you sell printers, you may also like selling cartridges, which are not included in the kit. In order for the manager not to forget to offer client cartridges, a product bundle exists. The Bundle has the main product (which is a printer in our case). With the use of Salesforce CPQ, you can link to the printer some extra products. So, when a manager creates a quote, they see that when choosing a printer, they immediately get a pop-up window where they can choose a cartridge, an additional paper tray, paper, or whatever within that product bundle may exist.

There are the following Discount methods in Salesforce CPQ

Optional Discount is a discount on a product if it is sold within a bundle. Let's get back to the printer story. Of course, you can also sell this cartridge separately as a stand-alone product. But when you sell it separately, it costs, let's say, $50. And if you sell it as part of a printer product bundle, it will cost $40, for example.

Volume-Based Discount Schedule is a discount that depends on the purchase volume in percent or a fixed one.

Manual Discount. The result of the Manual Discount calculation is recorded in the Customer Price, while the base price from which the discount is calculated is the Regular Price (remember price waterfall?). The Manual Discount setting can be blocked. To do this, check the Non-Discountable field on the corresponding Product. Manual Discount can be set in % or money amount.

Partner and Distributor Discount. As the name implies, this method is used to give an additional partner discount to the client. The values of these discounts are in the Distributor Discount and Net Unit Price fields on the Quote Line object. They are calculated according to the formulas:

Partner Price = Customer Price - Partner Discount

Net Price = Partner Price - Distributor Discount

CPQ pricing methods

Pricing Methods are the ways to set prices in CPQ. It is the key to understanding the pricing methods before implementing the CPQ solution. If you and the customer have agreed on different prices or not typical terms of service, the sales reps don't have to remember all the details. Salesforce CPQ can do all the work by itself automatically, changing the prices it gets from the price book while the sales reps do the tasks, which really require the full engagement of a human. There are the following pricing methods in CPQ that differ by way of price modification:

  1. Block Pricing. The method is used if we sell a product in different volumes. For example, pencils in boxes: small (10 pencils), medium (11-50 pencils), large (51-150 pencils), and want the cost of the pencil boxes to increase in direct or not in direct proportion to pencils number.

  2. Percent of total. This Pricing method is used to set the cost of a product in a Quote as a % of the total cost of the rest of the products in the quote. For example, we sell expensive equipment and include insurance in the quote, the cost of which is % of the cost of the equipment.

  3. Cost plus markup pricing gives sales reps some manual control over prices but is calculated as the Original Price + % or a fixed value that sales managers set. For example, the standard delivery time is three months, and the price is 1000 dollars. But the person wants you to deliver it in a month. This method allows you to automatically create a quota taking into account the delivery urgency.

  4. Option Pricing is used when you need the price of the product included in the Bundle to differ from the standard price of this product in the Price List.

  5. Contracted Pricing. A typical example of this method usage is when a company needs to set a price for a product supplied under a long-term contract, and is different from the price in the price list. Let's say the price of a product in the price list is $100, and you want to sell it to a client who has signed a contract for the supply of this product for three years at a price of $80.

  6. Manual Override. Enables manual price editing.


Salesforce CPQ is a perfect app for sales optimization. CPQ allows your sales reps to create quotes for each partnership/ customer agreement. Now the sales team won’t spend hours to ensure they didn’t miss any valuable detail while creating a quote.

Sparkybit provides customers with Salesforce CPQ consulting. Contact us, and we will help you fill the gaps, solve complex issues, build out sophisticated solutions, and expand your team’s technical Salesforce knowledge and platform adoption.


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