CPQ and the Evolution of Digital Commerce Platforms

You probably think of configure, price, quote (CPQ) software as a tool for rep-driven sales processes. Its ability to simplify complex product configurations, calculate accurate prices, and instantly translate them to quotes and proposals is generally a solution to the challenges reps face when working with their prospects and customers.

But nearly three-quarters of today’s buyers want a rep-free experience. To adapt, companies across dozens of B2B and B2C industries have to adopt a direct-to-consumer model. From automotive to consumer electronics and from capital equipment to chemicals, the demand for self-service experiences has grown.

Just like it sits at the center of rep-driven sales processes, modern CPQ integrates with your customer-facing digital sales channels, providing essential functionality and delivering information that helps them order configurable products.

In today’s article, I’ll break down how you can streamline customer ordering, enhance your buying experience, and facilitate multichannel sales through the power of CPQ.

The Rise of Digital Commerce: A Brief Overview

Over the last two decades, the landscape of commerce has undergone a profound transformation. What started in the 1990s with eBay (then called AuctionWeb) and a few other pioneering online retailers has evolved into a full-scale revolution in the way we do business.

The convenience of online shopping — that is, being able to research products, compare prices, and make purchases whenever and from wherever — was a natural deterrent to the comparatively inconvenient brick-and-mortar model. Major ecom giants like Amazon and eBay capitalized on this by diversifying from selling books and collectibles to everything from groceries to cloud services.

As the internet became more ingrained in our daily lives and software platforms supported more and more complex purchases, it grew into a multitrillion-dollar market. By 2029, it’s projected to hit US$12.93 trillion in value.

The challenges in meeting customer expectations

When the internet wasn’t so advanced, you could get away with limited product information on static web pages. And a phone call or email could follow if they needed to complete a more complex purchase.

As consumers grew accustomed to smooth ecommerce experiences (think of how quickly brands like Amazon established one-click checkouts), buyers started to expect similar levels of speed, convenience, and personalization in all of their buying experiences.

This creates a host of challenges:

• Lower barriers to entry mean more competition for customers’ attention.
• Instant access to information means higher standards for service and response time.
• More trust is required from customers who are used to physically holding and inspecting products before making a purchase.

Now, 80% of B2B buyers expect a buying experience comparable to B2C interactions. And, in Adobe’s recent study on personalization at scale (done in collaboration with Forrester), they revealed that 66% of buyers expect the same or better personalization in their professional purchases as they do in their personal shopping.

The businesses that can deliver that are the ones that win.

The convergence of B2B and B2C ecommerce

Digital has become the new default for virtually all sales interactions and transactions, and the adoption of B2C-like interfaces illustrates that perfectly.

There’s still a time and a place for face-to-face sales meetings and live product demos. Solar, construction projects, custom equipment, enterprise software — the list of products and services customers can’t buy on their own goes on and on.

But the role of the sales rep is changing. 84% of people say they expect reps to act as “trusted advisors.” And buyers are happy to make their own decisions — more than three-quarters of them say they’re willing to make transactions of $50,000 via a self-service or remote channel.

That means companies have to think critically about where their reps are needed, and where it’s time to get out of the way.

New opportunities with digital commerce

While it might initially seem like this is the death of the sales rep, it’s quite the opposite. Instead, it’s creating new opportunities for reps to add value. Without the burden of processing transactions and chasing down leads, sales reps are free to focus on building meaningful relationships with high-value customers who need their expertise.

It also creates new ways for companies to generate revenue and optimize their selling costs — you can take auto manufacturers as a prime example.

Many drivers will still go to the dealership to test drive cars and consult with a salesperson. But, thanks to online visual configurators and price calculators (i.e., CPQ for automakers), it’s also possible to customize one and order it from your smartphone.

Not only does it cost a lot less to acquire that customer, but the average deal size goes up, too. They’re able to add on custom features and options. So, you can sell more products to a larger market, faster, while reducing your overall cost of sales.

The Role of CPQ Software in Digital Commerce

Manufacturers, wholesalers, distributors, SaaS vendors, you name it. They’re all adding ecommerce channels to meet the demand for frictionless, round-the-clock access to product information and ordering. Whether it’s an everyday item or a million-dollar investment, buyers value autonomy, on-demand support, and seamless digital transactions.

For complex sales, CPQ is the single most important tool to facilitate this kind of customer experience.

Product configuration

A product configurator is a tool within CPQ that enables you to build custom products and services with the help of a guided selling process. It integrates with your website, app, or customer portal to allow them to choose specific features, options, and accessories, then see those changes reflected in real time.

There are a few features that make it possible:

• Visual configurations with 3D product visualization
• Guided selling to make it easy to select the right options
• A backend rules engine that defines what is and isn’t possible
• Compatibility checks to prevent inaccurate or impossible configurations
• Upselling and cross-selling suggestions based on customer choices and preferences

Some configurators even use augmented reality (AR). Epicor, Experlogix, and Combeenation are all examples of CPQ systems that enable buyers to test out different product configurations in a 3D, augmented reality environment — for instance, seeing if a piece of custom furniture would fit and look nice next to everything else in your living room.

Pricing calculations

Along with your product rules, every SKU in your product catalog has a price assigned to it. As your customers choose products or build them out of individual parts, they’ll instantly see an updated price based on each selection they make.

This is where CPQ’s real-time pricing comes in. As customers make changes, the system automatically adjusts prices based on any additional or removed items, discounts, and other variables.

If your system has dynamic pricing built into it and you integrate it with your ERP, it can even present the most up-to-date pricing based on availability, input costs, and your target profit margin. This is useful if you’re selling completely custom products, or your product’s price varies frequently based on the cost of commodities.

And some CPQ systems integrate with vendor portals. QuoteWerks, IBM, and PROS Smart CPQ are three examples of tools that can also connect with your PIM and vendor portals, then use AI to determine the optimal price based on their pricing and availability.

Discounting and promotions

In addition to your standard prices, promotional discounts and special offers are stored in the centralized pricing engine within your CPQ system.

Business administrators set up discount thresholds, promotional triggers (e.g., buy-one-get-one, bundle discounts, volume-based breaks), and margin requirements. These rules dictate when certain discounts should apply and when approval is required.

Since the system is linked to your CRM and ERP in addition to your ecommerce systems, discount logic is automatically updated when changes occur (e.g., cost fluctuations, new sales promotions).

Customer data from your CRM also feeds into the CPQ system to enable targeted discounts. For instance, a long-time customer or VIP account might automatically qualify for a higher discount tier.

Quoting

During the quoting process, a sales rep would typically take the configured product(s) and services the customer wishes to purchase, add them to the quote as line items, and then send the quote to the customer for review.

In ecom, that process happens automatically. Once the user is finished configuring their product and adding supplementary products/services to their cart, the system automatically generates a quote.

That quote features all the information they need to know about the product:

• Line items for each individual product, service, and bundle
• Their corresponding prices
• A description for each
• Images (if applicable)
• The total amount for the sale

Depending on the nature of the deal, you might have additional information on the quote, such as:

• Ramp pricing (for SaaS deals)
• Monthly payment plans
• Expected delivery dates or timelines
• Financing options
• Price waterfalls
• Payment methods accepted

Assuming you’ve added your branding details, those will show up on the quote as well. So, your customers will get professional-looking quotes that stand out, in addition to being easy to read.

Note: For configure-to-order (CTO) products, the process is not automatic — your customers will submit their configuration for an estimate instead. The system will route that request to your deal desk, which will then review it and come back to them with a formal quote.

Contracting

Some CPQ tools have contract management built into them, which is important if you have specific terms and conditions for accessing your product/service, delivery commitments, warranties, or any other important particulars.

There are standalone contracting tools, but CLM and CPQ are the perfect duo because the contract comes right after the quote, when you’re finalizing the sale. When the two are connected, customers automatically receive your standard terms and can e-sign or click to agree before finishing.

Plus, there’s no risk of data loss or discrepancies — every customer’s info is stored in one central location.

Integrated billing and payment gateways

Billing is one of the final steps in the quote-to-cash process. Like contract management, it’s best to have this function integrated with your CPQ. Together, they facilitate a more streamlined workflow, especially considering the process has to run without the guidance of a trained rep.

Once someone finalizes their selections, accepts the price, and agrees to the terms (if there are any), your ecommerce system will take them to a secure checkout page. There, they can pay for their order.

Once they pay for their order, two things happen:

1. They get a detailed payment receipt.
2. Your fulfillment team gets fulfillment instructions.

Again, you don’t have to lift a finger. It all happens on the backend, and your customers enjoy an app-like purchase experience.

Subscription management

If you’re a subscription-based business (e.g., a SaaS company or a membership program), subscription management is an essential feature of your CPQ/billing platform.

With subscription management, you can:

• Automate subscription billing within CPQ
• Allow subscribers to modify their subscriptions and payment methods without contacting support
• Provide customers with usage-based pricing options
• Manage renewals, upgrades, and cancellations
• Handle dunning and collections processes automatically

DealHub is one example of a CPQ system that also offers native billing and subscription management features.

Sales enablement

Plenty of CPQ systems have additional features that present your customers with helpful options, resources, and deals that increase the value of their purchase.

For example, a customer may need help deciding which version of a product they need. Your CPQ could connect to your CMS and suggest certain web content that would help them make a decision.

Or, if you have related products or upsells, your CPQ could showcase them to the customer as they build their order.

Enhancing the Ecommerce Buying Experience: Real-World Examples

To help you fully grasp the use cases and benefits of CPQ for digital commerce, let’s take a look at a few different companies and how they use it to facilitate online configuration, quoting, and ordering.

Dräger’s firefighter helmet configurator

Dräger, a multinational safety equipment manufacturer, implemented a visual CPQ solution to enhance its ecommerce platform, particularly focusing on its firefighter helmets. Using Zoovu’s Configuration Studio, Dräger transformed its website into an interactive digital commerce experience.

The system allowed customers to:

• Interactively configure firefighter helmets
• Get instant pricing updates based on the selected configurations
• Submit their customized helmets for a formal quote
• Place the order, with all configuration details seamlessly transmitted to Dräger’s order management system

This CPQ implementation led to a 27% increase in conversion rates and a 97% reduction in time to quote.

Lapeyre’s implementation of PROS Smart CPQ

Lapeyre, a European retailer specializing in home improvement products, needed to improve its customer experience across its multiple sales channels. To achieve this, the company implemented PROS Smart CPQ into its ecommerce platform.

For the end customer, the workflow was intuitive:

1. Customers navigated to the desired product category on Lapeyre’s ecommerce site.
2. Using the CPQ tool, they customized the product features to match their preferences, with real-time visual and pricing feedback.
3. Upon finalizing the configuration, customers received an instant quote, which they could review and adjust as needed.
4. When they were happy with the configuration and pricing, customers proceeded to complete the purchase through the platform.

For Lapeyre, this meant a successful multichannel sales strategy, a reduction in the production cycle, and a huge increase in custom product sales.

Virtana’s SaaS CPQ implementation

Virtana, a SaaS company specializing in IT operations and cloud management solutions, wanted to improve its sales process by implementing Salesforce CPQ. The goal was to enhance the customer experience by providing accurate and timely quotes, thereby accelerating the sales cycle.

This integration allowed for:

• An automated quoting process
• Real-time pricing updates
• Automated approvals for discounts and special pricing requests

Customers accessed Virtana’s ecommerce platform to select and configure the SaaS services that met their specific needs. They reviewed the quote and, if necessary, engaged with Virtana’s sales team for any adjustments or negotiations.

This led to a more efficient sales process, improved quote accuracy, and higher rates of customer satisfaction.

The Future of CPQ Software and Digital Commerce

Emerging trends in the CPQ space, particularly the integration of AI and connectivity with ecommerce technologies, are continuously reshaping how businesses and consumers interact in the marketplace.

AI-powered configuration

Artificial intelligence is revolutionizing CPQ systems by enabling more dynamic and personalized configurations. Advanced AI algorithms analyze vast datasets to provide tailored product recommendations and configurations that align with individual customer preferences.

For instance, Cosmo AI, which is built into Logik.io, is designed to simplify complex B2B purchasing by offering intelligent product configuration solutions. It uses advanced algorithms to help buyers navigate intricate product options, while ensuring every configuration meets specific requirements.

Integration with ecommerce technologies

Modern CPQ solutions are increasingly integrated with ecommerce platforms to deliver a cohesive purchase experience, directly through online storefronts.

Salesforce’s Commerce Cloud exemplifies this trend by combining CPQ with ecom functionalities like conversational commerce, where buyers can interact with AI-powered chatbots to receive personalized product recommendations and complete purchases in real time.

Personalized shopping experiences

Personalization in digital commerce is becoming increasingly sophisticated. AI-driven CPQ tools analyze customer data to offer personalized product configurations and pricing, enhancing the overall shopping experience. Zoovu’s AI-powered product discovery platform, for example, guides customers through the configuration process based on their specific needs and preferences.

Omnichannel selling

Integrating CPQ with all your sales channels means you can open yourself up to so many different customer segments. Online storefronts are just the beginning — you can connect a whole distributor network to your CPQ solution, and even enable salespeople in the field to access real-time pricing and product configurations on their mobile devices.

• ConnectWise CPQ or Vendavo CPQ integrated with your distributor network
• Experlogix’s Mobile Sales Rep App
• SAP CPQ plus its partner portal module

There’s a system out there for just about every kind of business, and every monetization model within those businesses.

CPQ: Evolving at the Speed of Business

CPQ significantly reduces complexity when it comes to configuring products, managing pricing, and delivering discounts and promotions. And today’s CPQ vendors are continuously innovating to further support intelligent quote generation, advanced personalization, and complex promotional strategies.

Ultimately, it stands at the very forefront of the modern customer experience. By integrating with ecommerce platforms, CRMs, and ERPs, CPQ systems unify data, streamline workflows, and guarantee consistency and accuracy for both buyers and sellers.

If transforming your sales processes and delivering world-class online purchasing experiences are on your agenda this year (they should be), now is the time to explore a modern CPQ solution. For guidance, check out our CPQ software reviews, detailed comparisons, and my 7 smart tips for picking the right CPQ software.