Last Updated On June 09, 2023

Salesforce CPQ: What is It?

Salesforce CPQ: What is It?
By Team TIS

What is Salesforce CPQ:

One of Salesforce’s most unique and revolutionary solutions is Salesforce CPQ

At its inception it was not more than a nice-to-have solution, but with time as more and more businesses have come to implement it into their use, Salesforce CPQ has become a must-have solution, bringing tremendous value and improvement in the sales environment of any business that implements it. 

CPQ in Salesforce stands for: Configure, Price, Quote

Operational upgrades happen constantly in any given sales cycle, Salesforce CPQ optimizes the sales operations in an efficient and effective way, driving optimization and growth in businesses globally. 

It is a common occurrence that quote creations are hindered at the last moment, just as a deal is about to close, due to a lot of schedules being dependent upon manual activities. This creates an unnecessary obstacle for the sales team. 

Researchers have observed that only 34% of a sales representative’s time goes into actual selling, the rest is mostly occupied with the long and tedious task of creating manual quotes, preparing proposals and getting approvals. Salesforce CPQ is designed specifically with the sole purpose of helping your sales team and it does so by automating these manual tasks in such a way that streamlines your sales operations efficiently. 

Salesforce CPQ is the preferred solution for sales reps for common issues that they face in the quote-to-cash cycle. For instance, if you use legacy quote configuration for your business, and are faced with an issue with inaccurate quotes, Salesforce CPQ is a godsend solution for you. It uses the simplest and least complicated order form for most organizations that have an intricate selling process. 

Let’s take a look at the step by step breakdown of this software:

  • Configure:

Configure, as the name suggests, has to do with how you configure your order. This is the first thing to do once your CPQ is out of the box. You start with filling out the important details about the customer/product/service and then go forward with the sale process. You need to align your service/product map with the business of your customers. The product/service features are tailored and structured in a way so as to offer a package to the customer. The important aspects that you need to consider are the product or service units offered, quantity, and the configuration rules. 

  • Price:

Right after the configuration process, pricing needs to be set, and that too with accuracy. Pricing should be set according to the different price lists. You can even apply discounts for customers without any worries, Salesforce will do all the math for you. Generating accurate quotes and dynamic pricing in PDF documents that are brand aligned,  has never been easier and more accessible. Sales reps can now easily calculate pricing for subscriptions, blocks, units, discounts, etc with just a few clicks. 

  • Quote:

Once you set pricing, the next step is to generate quotes. It is the final step of the sales process, and at the end of this step you need to get your quotes approved. It is also known as quote-to-cash process since it covers all parts of the process from opportunity till cash collection. 

Properly tailored, on-brand quotes, can be easily set-up by the users with the use of Salesforce CPQ. Quotes are generated with a lightning speed just by feeding the basic information into the software. (Quotes include both: PDF documents as well as electronic record quotes)

Product bundle-

A combination of distinguished sets of products or services that are sold specifically to clients as a single package are known as a product bundle. It entails numerous records like, product features, product options, configuration aspects, option constraints, etc. There are different kinds of product bundles:

  • Static Bundle:

The Static Bundle is also, more commonly referred to as the traditional bundle. It is a fixed bundle, meaning that the products are pre-decided during the creation of the bundle. There is no scope for any changes once the configuration process is completed. 

  • Nested Bundle:

The Nested Bundle is true to its name, meaning that it includes groups of elements that have been previously combined, to form a bundle. Users have the ability to choose from a subset of offers that are made available in a product for their convenience. 

  • Configurable Bundle:

Configurable Bundles are, if simply put, configurable. This means that they can be tailored and customized to the individual and unique needs of the customer. You can add products to your bundle that are configurable. (Some exceptions exist for the prevention of irrational configurations) 

CPQ Salesforce pricing

CPQ in Salesforce offers a number of ways to price products. You need to understand the different pricing methods that are offered by CPQ in order to understand which is the best pricing method for your operational model. This will allow you to leverage Salesforce CPQ to its fullest potential.

CPQ Salesforce pricing methods for products are:

  • List price

When a user fixes the pricing for services or products, List Price can be used. List prices can be accessed easily from the price book entries. These entries are editable too, you need to set the editable chatbox to true for that. Discounts can also be added on list prices. 

  • Cost and Markup Pricing

Sales reps can set prices based on cost and also add markup amounts, with this type of pricing. It allows them to have complete control on the price quote with changes, this cannot be done with list price. 

  • Block pricing

Block pricing enables the sales reps to price products as per the various quantity ranges that are called block prices. This model can be put to use when you want to price a pack or group of products. 

  • Batch pricing

For the products that are inside a bundle, batch pricing can be used, but it doesn’t work with products that are stand-alone. The components and accessory product options can be priced with this model, based on the range of quantity.

  • Percent of total pricing

You can configure products and price them on the basis of the total percentage of other quote-line items using this model. It is also known as the dynamic pricing model. One product’s price depends completely on the other products in the quote. 

  • Contracted Pricing

When the sales representatives want to go with the negotiated price, after the finalization of the contract, this model is used. It allows them to quote the initial prices. 

How can your business benefit from Salesforce CPQ?

  • It saves time and reduces errors for sales, customer service, and finance teams.
  • It enables self-service for customers, minimizing the need for sales involvement.
  • It enhances pricing accuracy and improves the quality of quotations.
  • Sales representatives can free up their time and focus on more important tasks.
  • It streamlines complex contract and billing processes, reducing manual effort.
  • Automated sales processes with CPQ ensure accurate and quick quotes.
  • Integration with other platforms, like your business ERP, simplifies overall operations.
  • It empowers sales professionals to handle complex configurations, specialized pricing rules, and close bigger deals.
  • Personalized quotes provided by CPQ enhance the customer experience.

All-in-all, investing in Salesforce CPQ can boost efficiency, improve customer satisfaction, and drive growth for your business.

Final Thoughts-

Salesforce CPQ is a valuable tool that transforms the sales process for users. It simplifies tasks such as quote creation, pricing, and approvals, which saves time and effort for sales representatives. CPQ accurately configures products, applies discounts, and generates on-brand quotes, ensuring a professional and efficient sales experience. It also benefits customer service and finance departments with decreased handling time and improved accuracy. CPQ empowers users to provide a self-service experience to customers, which reduces the need for multiple sales touches. Overall, Salesforce CPQ is crucial for users as it enhances price positioning, quotation quality, and customer satisfaction, enabling businesses to manage complex configurations, specialized pricing rules, and close bigger deals successfully.

If you are looking to implement Salesforce CPQ for your business, TIS offers custom implementation services that address specific industry needs and ensure a seamless integration with existing CRM systems. With TIS’s Salesforce implementation, users can expect increased efficiency, accuracy, and productivity in their sales process, as well as improved customer satisfaction and retention.

Read Also: Salesforce Genie


Q. What is Salesforce CPQ and why is it important for businesses?

A. Salesforce CPQ (Configure, Price, and Quote) is a software solution that streamlines the sales operations of a business by automating critical tasks such as manual quote creation, approvals, and proposals. This allows sales representatives to spend more time on actual selling, which increases their efficiency. Salesforce CPQ helps businesses to overcome challenges in the quote-to-cash cycle by enabling accurate quote configuration and providing an easy-to-use order form for businesses with complex selling processes.

Q. Can you explain the different pricing methods offered by Salesforce CPQ?

A. CPQ Salesforce pricing methods include List price, Cost price, Block price, Batch price, Percent of Total, and Contracted price. List price is a fixed price for a product or service. Cost-and-Markup pricing allows sales reps to set a price based on the cost and add a markup amount. Block pricing lets sales reps price products according to different quantity ranges. Batch pricing is used to price accessory product options and components based on quantity ranges. Percent of total pricing allows products to be priced based on the sum percent of other quote line items. Contracted pricing allows sales reps to quote the prices initially agreed upon even after the contract is finalized.

Q. What are some of the key benefits of using Salesforce CPQ?

A. Salesforce CPQ provides a multitude of benefits. It not only empowers sales teams but also supports customer service and finance teams by decreasing handling time and reducing mistakes. It offers customers a self-service experience, improves price positioning, and enhances quotation quality. Moreover, it automates the sales process, ensuring precise quotes with swift processes. The integration of CPQ with other platforms like your business ERP can streamline overall business operations. Additionally, its ability to offer personalized quotes for customers significantly improves the overall customer experience.


About the Author:

This blog is authored by Nandini Pathak with an area of expertise in technology. Uniquely blending her legal background to create engaging content, she is passionately involved in emerging technology trends. An avid dog lover, her warmth and empathy enrich her writing style. Nandini’s passion for learning and her SEO proficiency ensure her work stays relevant and visible, making her an impactful content creator who seamlessly integrates personal pursuits with professional expertise in the technology domain.

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