Configure | Price | Quote (CPQ)

Configure-Price-Quote (CPQ) is a term commonly used for the process leading up to generating a sales proposal for companies offering complex products and/or services. CPQ software helps companies configure complicated product offerings, price them in such a way that the correct discounting and bundling rules apply to products or sets of products, and create fast, accurate quotes based on that information. CPQ software bridges the gap between front and back end systems, and assists companies in the lead-to-order and lead-to-cash processes.


The CPQ Acronym


The process of discovering, selecting, and combining product and service options to create a configured product while taking into consideration all rules and constraints. Examples may be configuration of a product that is available in many different configuration options, many of which are dependent on each other.


Deciding the amount required for payment while taking into consideration the configuration and additional conditions. Examples of additional conditions may be economic benefits, manufacturing costs and competition’s pricing.


Documentation describing the requested products and services, pricing, and associated terms and conditions.

When is packaged CPQ needed?

Below is a list of compelling areas that should be considered when evaluating if a packaged CPQ solution is necessary:

Company is operating in a B2B model, and operates in a negotiated selling environment.

Customized product offerings and pricing/discounting are crucial to success.

Multiple products, services, and bundles are in the mix.

Complex configuration and business rules are required.

Complex approval processes, such as credit check, engineering approval, pricing approval, and legal approval are necessary.

Segmentation of customer base for specific pricing and discounting rules is strategic.

Volume of users and quotes is significant enough to warrant increased automation, or the growth path is such that it will in the near future.



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Configure | Price | Quote Components

Configure Price Quote

Product Configuration

Products can have many aspects that make them configurable to a customer’s needs – size, color, materials, ingredients, capabilities, technologies, and more. In many cases, a single product to a customer is the compilation of a few products within the system products like automobiles, boats, pizza, and others.

Products can have limitations on what can be packages together. Dependencies may exist, like ‘cannot have one product without the other,’ and prices may vary depending on products when bundled together.

Standard Pricing

Standard prices are provided for each product or product attribute in a catalog. Standard prices for each product are key to keeping the available products (product catalog) from growing out of control. The available product variations create the need for additional pricing schemas.

Those schemas can be added to the core product, making these options available to other products within the product catalog. This structure ensures consistency and reduces the need to build customer specific products within the product catalog.


This process is the central method for increasing Average Revenue Per User (ARPU), which is an essential growth metric for most service providers.

Up-selling is the process of selling more of a particular service. For example, moving from 6 MB for $25/mo to 18 MB for $45/mo internet speed is a typical up-sell.

Cross-sell is when a customer purchases a separate product or service from what they had originally. For example, if the customer originally had internet service, but expanded to include phone and cable, that is an example of ‘cross-sell.’

The combination of up-sell and cross-sell is the primary method of driving more revenue within an existing customer base. Another common phrase is ‘wallet share.’ Many service providers have a goal of increasing the wallet share from their customer base, which is often done through up-sell/cross-sell measures. The concept of ‘bundling’ or ‘packaging’ is a method for accelerating up-sell/cross-sell.

Up-sell/cross-sell can be done at time of customer creation, or over the course of the life of the customer. In the context of a call center, many agents are compensated specifically for up-sell/cross-sell as they perform their typical customer care. “Thank you for you updating your credit card information, did you happen to notice that we have expanded our internet offerings in your neighborhood and are offering a special 3-month free during the summer?”


A proposal is typically the first step in putting to paper the customer’s wants and needs. Proposals are generally ballpark estimates for the product and services required because at this point in the process all of the technical aspects have not been fully fleshed out. The purpose of a proposal is to test the waters, both for the organization and the prospect to see if a deal can be worked out. Proposals may often be sketched out with pen and paper, or communicated via phone or email, but should always be denoted as informal, with a more formal quote to follow.


The quote is often the first commitment made by a business to new customers. Once the customer has selected the product or product feature set that meets their needs, a quote will be presented that clearly demonstrates the options selected, the prices, and discounts available to them. This ensures complete understanding of what is being purchased, the contract terms, and any additional service details.

Customers may not agree to the first version of the quote or seek to negotiate additional terms/services. Quotes should be easily changed and reconfigured to represent any additional changes at a near real time rate.

In another scenario, it may take time for a customer to return with an answer to the quote. In such a case, the quote can be stored for future reference without having to re-engineer the quote or take the customer back through the entire process again.


The quote should provide an area for the customer to easily agree to the terms provided in order to facilitate the provisioning, activation, shipping, etc. necessary to provide goods and services quickly and easily to the customer. The approvals are retained for future reference.

Internally, an approval may be required to provide a quote to a customer. In any case requiring approvals for quotes, the process should be as efficient as possible. Approvals often ensure that quotes are accurate, meet internal revenue standards/margins, and terms are sufficient. The approval process should involve the appropriate level staff and be clearly communicated as quickly as possible. Approvals are retained for future reference.

Certain customers require special care. These customers may receive appropriate discounts added to their quotes, special services, or renegotiated price rates outside of what is available to the sales team at that time. These require even more speed and efficiency as well as thorough review at the appropriate levels.


Key Benefits of CPQ

Sales Effectiveness

Feature: Guided selling

Benefit: Sell more deals, able to have junior or inexperienced salespeople effective more quickly.

Bigger Deals

Feature: CPQ typically allows bundles to be quoted.
Feature: CPQ typically has ‘up-sell and cross-sell’ capability.

Benefit: Sell bigger deals by presenting targeted offers to customers during the selling process.

Sales Productivity

Feature: All quotes – and quote users and approvers – are using the same tool, eliminating the need to search for status.

Benefit: Salespeople have more time to sell.

Efficient Risk Management

Feature: Approval steps for key access like Design, Inventory, Price Discount, Credit Worthiness, and Legal Review.

: Reduced risk, enforcement of company policy, ‘the will of the business.’

Key Requirements for CPQ Tools

Product Catalog

Ability to interact with typical Service Provider Product Catalog environment.

Selling, Billing, Provisioning Catalogs

Multi-Channel Selling

Ability to operate efficiently in a Multi-Channel Selling model with multiple quote entry points.

Salesforce CRM, Call Center, eCommerce, Partners, API

Pricing Types

Ability to support pricing for Usage, Recurring, and Non-Recurring charges for a single product.

Discount Types

Ability to support Discounts at each level of charge.

Monetary, Percentage, Void


Ability to support Bundling of multiple products and services into a standardized offering.

Customer Lifecycle

Abillity to support the Lifecycle of the Customer throughout their tenure with the company. New, Add, Renew, Up-Sell, Cross-Sell

Assets & Inventory

Ability to quote off of existing Assets or Inventory

Pricing Environments

Ability to work effectively in standard, customer, and customer-specific Pricing Environments.

Exceptions Process

Ability to manage Exceptions Process efficiently. Need fine-grained level of precision for conditional branching, full visibility to quote regardless of stage, and intelligent routing and queuing.

Quote Quality

Ability to present professional, easy-to-digest Quotes and Proposals.

Downstream Integration

Ability for Downstream Integration with ordering, contracting, and fulfillment applications.


Subscription CPQ & Recurring Revenue

The era of Customer Success Platform-Based Quote to Cash has joined the fray, and for many of ATG’s clients and prospects, the timing is perfect. Business agility is the name of the game now, and our clients are faced with numerous technological, economic, financial, and societal trends that are dramatically changing the way they need to do business.

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What’s in a CPQ Tool?


FACT Framework

ATG recommends that the quoting process follow the FACT framework – Fast, Accurate, Clean, and Transactable.

Every company is intentionally or unintentionally balancing the need for speed, quality, accuracy, and efficiency. For example, every sales rep will tell you that the fastest way to get a quote out the door is to eliminate any approvals, but typically business stakeholders accept that there are financial or legal or other risks that need to be mitigated, hence the need for at least some approval process to ensure quality and accuracy.

Are there too many approvals in the process? Too few? What about data? Should addresses be validated up front, or only at Order time? Should customer credit be checked? If yes, should it be early or late in the process? Each of these factors must be balanced to ensure an optimal selling environment.

FACT Framework Quoting CPQ

Quote process is as responsive as the customer requires.


Provisioning and Billing Information are complete and accurate.


Quotes and proposals are professional and add credibility to the selling process.


Opportunities, Quotes, Contracts, and Orders are integrated with limited need for redundant data entry.

Will of the Business

Effective implementation of a CPQ tool provides a company with the ability to fine tune their selling environment, speeding up (more risk) or slowing down (less risk), adding complexity (more product options or bundles) or reducing complexity (all you can eat pricing). It can be useful to think of this environment as a combination of gauges on a dashboard that reflect the balance of speed, quality, and risk.

Quote speed in CPQ beforeQuote speed in CPQ after
Quote Quality in CPQ beforeQuote Quality in CPQ after
Financial Risk in Quoting CPQ beforeFinancial Risk in Quoting CPQ after
Delivery Risk in Quoting CPQ beforeDelivery Risk in Quoting CPQ after

Detailed: People | Process | Technology

CPQ is ‘The Thing in the Middle,’ meaning it comes between Opportunity and Order and in typical larger B2B service-provider enterprises, you can’t get from here to there without it.

From a sales perspective, both Inside Sales and Field Sales – as the direct conduit to the potential customer, use CPQ extensively. But it’s not their realm exclusively.

The Customer Service, Product, and Operations groups are all intimately involved with CPQ as well, while the Finance group and Legal are key stops on the journey from prospect to sale. In many organizations, the executive team gets involved on large or potentially risky deals.






Key Vendors

Below are the key CPQ technology providers for the service provider community:

Founded: 2010
HQ: Palo Alto, CA
Company Type: Public
Cloud/On-Premise: Cloud

Founded: 2006
HQ: San Mateo, CA
Company Type: Privately held
Cloud/On-Premise: Cloud

Founded: 1996
HQ: Dublin, CA
Company Type: Public
Cloud/On-Premise: Cloud


Founded: 2009
HQ: London, UK
Company Type: Privately held
Cloud/On-Premise: Cloud

Oracle CPQ

Founded: 1977
HQ: Redwood Shores, CA
Company Type: Public
Cloud/On-Premise: Cloud

IBM Sterling Commerce

Founded: 1955
HQ: Dublin, OH
Company Type: Public
Cloud/On-Premise: On-Premise

Founded: 1987
HQ: Houston, TX
Company Type: Public
Cloud/On-Premise: Cloud

Founded: 1983
HQ: Dallas, TX
Company Type: Privately held
Cloud/On-Premise: Cloud



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