Quoting Software

What is Quoting Software?

Quoting software, also called configure, price, quote (CPQ) software, is a business application designed to help companies automate the process of creating, sending, and managing sales quotes and proposals. It streamlines sales by allowing businesses to quickly generate accurate, professional-looking quotes for their products or services.

• Sales teams use it to generate quotes quickly and follow up on leads efficiently.
• Service providers create detailed service proposals, including timelines and specific deliverables with it.
• Project-based businesses include project-specific details in their quotes, such as materials, labor costs, and other related expenses.
• Manufacturers and distributors quote prices for products, considering customizations, volume discounts, and shipping using quoting software.
• B2C sellers (e.g., a car salesperson) use it to provide customers with accurate pricing information and generate quotes for customized products and services.

Within quoting software, businesses can drag and drop items, services, and fees into a quote template, add discounts and promotions, and customize the final output with their branding. The intuitive platform is a huge step up from manually configuring quotes in a Google Doc or Excel sheet.

Synonyms

• Quoting tool
• Quotation software

Components of Quoting Software

Product Catalog

The product catalog is where your quoting software stores all your products, services, and configurations. It provides a central location for your team to browse, search, and filter the items they need to add to their quotes.

Catalogs work on product rules, which an admin configures in the quoting software’s backend. They define the attributes and dependencies of a product. They include:

• Min/max quantity limits
• Compatible and incompatible products
• Required, optional, and disallowed components for a CPQ bundle
• Dependencies on other products (e.g., a printer requires specific ink cartridges)

Without product rules, you’d have no way of ensuring your sales reps select the right product combinations and configurations for each quote. With product rules, it only allows them to add products that make sense in combination with the primary product.

The added benefit to this is you don’t have to constantly reenter product or pricing information every time you create a new quote and add a line item. The software will remember them all for you.

Pricing Engine

A pricing engine is a specialized software module that calculates prices based on inputs. In quoting software, the pricing engine considers your product rules and applies appropriate pricing calculation logic. It returns the final price for each product, factoring in discounts and promotions.

The pricing engine allows businesses to:

• Price each product at the right amount
• Set up complex pricing structures
• Apply volume or bulk discounts within specified parameters
• Change prices instantaneously based on a defined strategy (e.g., seasonal promotions)
• Change prices automatically based on availability and market demand (dynamic pricing)
• Incorporate special promotions and discounts
• Manage custom pricing for specific customers or industries

Depending on the complexity of your product offering, you may need a basic calculator that adds up the costs of each component, or a more sophisticated engine that factors in multiple variables to help you achieve price optimization.

For instance, a tool like PROS CPQ uses predictive pricing algorithms to adjust prices to different markets, products, and individual customers in real time. It can also give you AI-driven pricing recommendations based on profitability and dozens of other factors, which is critical in fields like contract manufacturing.

Quote Builder

The quote builder is the core feature of quoting software. It lets you create professional, branded quotes in minutes using your product catalog and pricing engine.

A quote builder should provide:

• Customizable templates with various design options
• Drag-and-drop functionality to add products, services, and custom text
• Automated calculations based on product rules and pricing logic
• Ability to save and reuse templates for common quote types
• Automatic PDF conversion with your branding
• Collaborative capabilities for multiple team members to work on the same quote
• Integration with other systems — CRM, CLM, and ERP, to name a few.

Workflow Automation

Within your quoting software, there are a lot of built-in guidance and automation features that make the quoting process more intuitive.

Guided selling makes the quote builder interactive. Based on your seller’s inputs, it shows them what options are available or required (based on your product rules) to guide them through the configuration process.

Approval workflows save time by eliminating repetitive tasks and ensuring your team follows your quote approval protocols. For instance, you can set up rules that automatically send quotes for approval when a certain discount threshold is reached.

Template and clause libraries make it easy to standardize quotes within your organization. You can save frequently used legal clauses, terms and conditions, and other information that’s needed on every quote.

Types of Quoting Software

Standalone Quoting Software

A standalone quoting tool handles the process of delivering pricing estimates and not much else. If you use a basic platform (or the lowest tier version a vendor offers), it’ll have three core features:

• Pricing
• Quote building
• Quote delivery

If you’re running a small business with relatively simple needs, you probably only need standalone quoting software.

Integrated Quoting Software

Integrated quoting platforms take a modular approach. They provide an all-in-one solution with quote building, contract management, billing and invoicing, e-signatures, and other essential sales tools for a complete, streamlined sales workflow.

For example:

• DealHub CPQ includes subscription management and contract lifecycle management (CLM) features for SaaS companies.
• FPX Intelliquip CPQ automatically generates purchase orders and BOMs, and gives you real-time pricing updates from your partners, distributors, and suppliers.
• IBM CPQ offers features for retail PoS and complex ecommerce ordering flows.
• Salesforce CPQ is built on the Salesforce platform. It works as a standalone tool or as a part of Sales Cloud.
• XaitCPQ enables servitization businesses to create custom customer and partner portals.

Integrated quoting software generally costs a lot more to use. Integrating quoting software is a required investment if you run a SaaS company, mid-sized (or larger) agency, manufacturing business, or complex sales operation.

Common Features of Quoting Software

Guided Selling

Guided selling uses basic decision-making logic to help sellers understand which products or services they should quote to a customer. It speeds up the sales process by prompting sales reps presenting sales reps with for more information about the customer, their needs, and budget, then presenting them with a limited set of options, based on needs and previous choices.

When you set product rules on your quoting software’s backend, it will apply these rules to each quote you create. That way, only valid options are presented, and the salesperson isn’t quoting a product that you can’t deliver.

Customization Options

Some quoting software is remarkably extensible, offering the ability to build your own quoting workflows and logic. With custom fields, you can collect information from your prospects and customers that’s unique to how you do business with partners and customers.

Similarly, custom proposals and templates also allow you to tailor your quotes with your brand identity, as well as the customer’s company logo and other visual elements specific to the customer’s preferences.

Reporting and Analytics

Quoting software collects and tracks data on every quote generated, providing valuable insights into your sales process and performance.

Good reporting and analytics features help you understand:

• Which products are selling the most or generating the highest profit margins
• What markets or customers are driving the most sales
• What quotes are closing deals and which ones need improvement
• How long each step of your quote process takes
• Team productivity and efficiency metrics

This is one of many reasons to integrate CRM and CPQ. When the two work together and share information, you’ll have tons more sales data at your fingertips. That’s how you make smarter decisions and optimize your sales process.

Mobile Accessibility

Some quoting software is available via a mobile app. This is especially true of more basic options, which don’t have the same complex features and data processing capabilities as more advanced tools.

A mobile quoting app allows your sales team to generate quotes on their devices from any location, so they don’t have to be tied to a computer at the office. This can save time and increase productivity, especially for remote or field sales teams.

Document Generation

Unless you’re using a bare-bones quotation tool, yours will have some kind of document generation functionality. Document generation lets you create high-quality proposals, contracts, and other sales documents quickly and efficiently.

You’ll also be able to add your branding elements (such as logos), adjust fonts, colors, layout options,  and even customize the content within a document. With automation, your quote software can pull data from CRM, CLM, and ERP, then have it populate directly into your sales documents.

Invoicing

Most quoting software has a payment processor built into it, so you can accept payments for orders and invoices without leaving the platform. This saves a lot of time and effort, as you don’t have to manually reenter all your quote details a second time using a separate invoicing tool.

If you can accept payments within the platform, it should also integrate with third-party accounting software (such as QuickBooks or Xero) to streamline the entire quote-to-cash process.

Integrations

As mentioned above, the tool you use to deliver quotes should integrate with other tools in your tech stack.

At the very least:

• Customer relationship management (CRM)
• Enterprise resource planning (ERP)
• Contract lifecycle management (CLM)
• Contracting/e-signature software
• Billing software

Integrated quoting tools might integrate with RevOps tools, vendor portals, product information management systems (PIMs), or other software depending on your industry and needs.

Industry Applications of Quoting Software

Manufacturing

In the manufacturing industry, quoting software has to be extensible.

Some manufacturers sell specific types of products at wholesale rates. These are actually quite simple from a CPQ standpoint — all you have to do is set product and pricing rules, hook it up to your ERP system, and you’re (mostly) good to go. The biggest challenge comes with managing potentially thousands of SKUs.

For contract manufacturers, other features become a necessity. If you’re selling complex engineer-to-order products (like medical devices), 2D/3D visualization and CAD automation are almost certainly a requirement.

Some manufacturers, like carmakers and custom t-shirt companies, do lots of business online. If that’s you, you’ll need to account for all the different features and options that can go into these products in your system and integrate it with your ecommerce site.

Retail

Retailers and distributors require a different set of features from their CPQ software. Some operate in the B2B space in addition to standard direct-to-consumer retail, so they need features that help them create quotes for wholesale buyers, as well as everyday shoppers.

The sheer volume of orders makes quoting in the retail industry different from other industries. Even relatively small retailers can have hundreds of SKUs to manage. And they might process thousands of orders through point-of-sale and ecommerce systems, even on a slow day.

Service-Based Businesses

Professional services businesses like consulting firms and marketing agencies need to provide clients with quotes or proposals that outline the scope of work and associated costs. Since service contracts are normally customized to the client and generally involve variable project components, document generation is one of the most important features of service-based quoting software.

• Service-level agreements (SLAs)
• Labor and material costs
• Added service fees
• Project timelines and deliverables
• Recurring payments for retainer clients

You can pre-configure these elements in your quoting tool. That way, when you create a quote, you can simply select the services and terms that apply to your client. This eliminates manual data entry, which can be especially tedious for complex consulting or marketing contracts.

Construction

Large-scale construction projects require a lot of coordination. You need to manage the materials, labor, subcontractors, equipment rentals, permits, inspections, and timelines. Construction-specific software like Experlogix or ProCore connects all these dots by pulling data from your estimating and bid management tools, ERP system, and project management platform.

Another key feature for construction quoting software is change order management. Change orders are inevitable in construction, and they can be a headache to manage without the right software. With an integrated quoting tool, all stakeholders can see what changes have been approve, what the scope of work contains, and where the project budget stands.

Software-as-a-Service (Saas)

Quoting software for SaaS companies is a lot different from traditional quoting tools. Instead of creating quotes with product SKUs and discounts, SaaS quotes typically involve tiered subscriptions and usage-based pricing. You might also offer one-off professional services like implementation and training as well.

For SaaS businesses, quote software automates subscription management, recurring billing, and invoicing workflows. And if you offer add-on services, it’ll apply the CPQ features we outlined above to those use cases as well.

Benefits of Quoting Software

Efficiency

It takes roughly 73% more time for non-CPQ users to create quotes, compared to those who use quoting software.

You might not realize in the moment how much time you’re spending on data entry, looking back and forth between product and pricing guides, and manually calculating estimated prices. But, once a platform starts to handle it automatically, the time savings are dead obvious.

Accuracy

One of the biggest issues with manual quoting is the amount of errors it can introduce. Typos on pricing, customer information, quote terms, and product options are just a few of the issues you might face.

If a buyer accepts a quote and you move on to execution, only to find out a month later you can’t deliver what you promised, you’ll wind up wasting tons of time, potentially losing money, and frustrating your client.

Scalability

Since it’s cloud-based software, it can handle as many SKUs, product options, and transactions as you need it to. Compared to manual, spreadsheet-based quoting, where every update needs to be made independently, scaling your quoting process is as simple as clicking the “Create a New Quote” button and selecting the products.

Improved Customer Experience

58% of customers would pay more for a better customer experience, and that’s exactly what CPQ software delivers. Besides the fact that it reduces the chances of frustrating your customer by delivering an inaccurate or miscalculated quote, it also improves the buying experience.

With quoting software, your buyer won’t have to wait several days for an estimate. They also won’t have to wait on hold while you calculate pricing for their options. If you can process payments through the same platform, they also enjoy a frictionless transaction.

Pricing and Product Optimization

If you deliver a quote for a product or service that includes multiple options, add-ons, and variations from customer to customer, sales quoting software helps you standardize the pricing. Plus, by analyzing your data over time, you can find trends in sales data and tweak your offerings to suit customer needs better.

Related Terms

CPQ Software

“CPQ (configure, price, quote)” is used interchangeably with “quoting software.” The main difference is that CPQ software specifically handles product configuration in addition to sales quoting.

A product configurator automates the process of assembling your product (or bundle) based on customer needs. Your sales rep will enter criteria into the quote builder and the software will respond with a valid product. If the selection isn’t valid, it’ll throw an error message so your sellers know which products or services don’t work together.

Every CPQ system can configure products, but configurators vary in complexity. Most can configure multi-variable quotes with one-time, recurring, and variable components. But some also include CAD automation and 3D visualization for complex products.

RFP (Request for Proposal)

An RFP is a document that outlines the project’s scope, requirements, and objectives. It’s used in bidding and procurement processes to solicit proposals from potential vendors or contractors.

It’s related to quoting software in the sense that it can help streamline the process of responding to RFPs. With a centralized database of product and pricing information, sales reps can quickly generate accurate quotes based on the requirements outlined in an RFP.

CRM (Customer Relationship Management)

A Customer Relationship Management (CRM) system is a crucial tool for managing interactions with current and potential customers. It serves as a central repository for customer information, which can significantly improve sales, marketing efforts, and customer service.

Integrating CRM with quoting software streamlines the sales process by giving sales reps instant access to customer data and interaction history. This enables personalized and efficient quote generation based on individual customer needs and preferences.

SaaS (Software-as-a-Service)

Every quoting software is a SaaS platform, meaning it’s built on a software delivery model where applications are centrally hosted and licensed on a subscription basis. With SaaS, quoting software users don’t need to install the software on their own systems. They can access everything through the internet, and scale their use up or down as they need.

Future Trends in Quoting Software

Like every other type of technology, quoting software is constantly evolving to better meet the needs of businesses and customers. Some current trends in CPQ include:

• AI-powered quoting — More advanced CPQ systems are incorporating artificial intelligence to help companies assess the feasibility of a deal in real-time based on projected lifetime value, profitability, and capacity constraints.
• Mobile CPQ — With the rise of remote work and mobile sales teams, there is a growing demand for CPQ systems that can be accessed and used on mobile devices.
• Integration with B2B ecommerce — Fewer and fewer sales orgs are transacting solely through sales reps, these days. According to McKinsey, 77% of B2B buyers are willing to complete $50,000+ transactions with vendors online. And 27% would spend $500,000 or more.
• Enhanced analytics and data visualization —  As data becomes more valuable in driving business decisions, quoting software is incorporating more advanced analytics and data visualization tools to help companies make informed pricing and product offering decisions.
• Plug-in CPQ enhancers — Some new quoting tools, like Logik, aren’t even standalone products themselves. Instead, they plug into CPQs from Oracle, Salesforce, and other platforms to customize them to SaaS, manufacturing, and other industries with unique and complex deal structures.

FAQs

Andrew Parker

Andrew is a professional copywriter with expertise in creating content focused on business-to-business (B2B) software. He conducts research and produces articles that provide valuable insights and information to his readers.