CRM and CPQ: Aligned Around the Customer Experience

February 21, 2024

Although CRM and CPQ are both focused on the customer experience (that is, they facilitate the customer journey through sales and retention processes), they serve different purposes and have distinct features.

While CRM is a tool to manage customer interactions and relationships from the moment they enter the sales pipeline, CPQ (configure, price quote) only handles a fraction of the sales process — quote-to-cash.

In today’s article, I’ll dive into their differences, and how integrating the two platforms brings you one step closer to a fluid sales motion.

CRM vs. CPQ: Understanding the differences

CRM: Focusing on customer relationships

CRM software is an extensive database that contains all the info about your past, current, and potential customers.

Your CRM handles:

  • Customer data storage, including contacts, company/personal info, and time-stamped notes
  • Direct contact with prospects and customers, including sales and service-related conversations
  • Sales pipeline visualization and management, including leads, opportunities, conversions, and sales forecasting
  • Post-sale customer engagement strategies (e.g., surveys, upsells, marketing automation)
  • Cusotmer behavior patterns and trends analyses
  • Sales goal monitoring per rep, per department, and companywide
  • Customer success and support management
  • To-dos, events, tasks, and meeting scheduling
  • Customizable reporting, analytics, and dashboards

So, every element of CRM is tied in some way to how your team interacts with your customers. With CRM, you have a record of every customer conversation. And you can use it to schedule follow-ups, personalize your communication, and maximize long-term retention through relationship building.

CPQ: Focusing on customer needs

CPQ software, at its core, is a tool for product configuration and quoting. But its value and use cases extend far beyond that. Since you’ll use it to generate proposals and quotes for your prospects, it’s also connected to the rest of the quote-to-cash process.

You can use CPQ to:

  • Collaborate on sales documents with your sales team, deal desk, and customers
  • Automatically generate sales documents from templates or from scratch — quotes, proposals, purchase orders, contracts, invoices, bills of materials (BOMs), and service-level agreements (SLAs)
  • Store documents (and versions of documents) securely on the cloud
  • Set product and pricing rules that guide sales teams and customers through the purchase process while only selecting options that are (a) possible and (b) feasible for your business
  • Configure products, product bundles, and custom quotes in either a 2D or 3D visual product configurator (depending on the platform you’re using)
  • Integrate with your website or customer portal for automatic quoting and self-service ordering/reordering flows

Depending on the CPQ software you use, you’ll also potentially have additional features like billing, subscription management, or native supply chain integration. DealHub CPQ, for instance, handles complex subscription billing for SaaS companies. A tool like QuoteWerks CPQ could help you coordinate with distributors and suppliers more easily.

Unlike CRM, which focuses on the whole customer lifecycle, CPQ software is designed for only a fraction of it (though it’s certainly an important one). CPQ handles everything related to your customers product and service needs — how they order, what they can order, and how you’ll deliver it to them.

The value of CRM-CPQ integration

CRM is the beating heart of every company’s tech stack. But, on it’s own, is kind of just a database. It doesn’t really do much in terms of automation and streamlining operations.

Other tools (in this case, CPQ) extend the value of CRM by integrating with it.

Broadly, it works like this:

  1. You load a new prospect into CRM.
  2. As you move through sales qualification, you open CPQ to quote them.
  3. CPQ already knows who the customer is and auto-fills their data.
  4. You use CPQ to configure the right products for them, and generate a custom quote.
  5. The quote is automatically saved into CRM (and can be saved as PDF and sent directly from your CPQ).
  6. CRM updates the prospect/customer record with this new opportunity, records sales metrics, and updates their status in the pipeline.
  7. If you close the deal, CRM and CPQ data auto-populate the invoice.
  8. CRM creates a task or event, schedules meetings with the customer’s rep, and begins the onboarding process.

By integrating CPQ and CRM, you eliminate the potential for human error and speed up the whole sales workflow.

Let’s look at the most essential benefits of connecting these two sales tools:

Streamlined sales process

Sales automation is the #1 reason to invest in CPQ. You’d be surprised how many companies still use Excel for quoting and Google Docs for contracting (yes…even well-known ones).

The issue here is…

  • You can toss the thought of “accuracy” out the window.
  • You have to copy-paste data between documents, which, frankly, is time-consuming and annoying.

Sales reps are busy people. Something as little as forgetting to update the sales pipeline, failing to leave a note in CRM, or missing a line item on a quote could wind up costing days or weeks getting the deal back on track.

With automation (facilitated by CRM-CPQ integration), you’re eliminating all the little things that could potentially create issues and hold up a deal.

Enhanced customer experience

Customer relationship management is more complex today than it’s ever been. Two-thirds of B2B customers say they expect the same or greater personalization in their professional lives than their personal ones. But they all want a convenient, hands-off experience.

Achieving those two things simultaneously isn’t possible if you need a sales or customer success rep to constantly copy/paste customer or product info into PDFs. And it definitely isn’t if you have to manually make changes every time a customer wants to update their account.

With CRM-CPQ integration, you can:

  • Sync website and self-service portals to both databases, so customers can easily manage their accounts and changes are automatically reflected in CRM
  • Personalize interactions based on customer preferences, pain points, and usage history
  • Create custom quotes and proposals in moments, using a customer’s preferred pricing and product options
  • Eliminate the back-and-forth that’s typical when buying complex products, creating a frictionless buying experience for the customer

PwC finds that 43% of customers would pay more for greater convenience. And Mediafly reports that 68% of buyers don’t want to interact with a sales rep at all. 

CPQ-CRM integration is the only way to fully meet the modern customer’s buying preferences.

Improved sales efficiency

It takes sales reps about 73% more time to produce a quote or proposal when they aren’t using CPQ. But when they do use it, they cut their overall sales cycle time down by 28%.

For the typical B2B sale, that means you’re shaving a month off the total time it takes to close each deal.

The reason is simple: CPQ eliminates the need for manual quote building, and CRM integration completely automates the flow from one stage in the funnel to the next.

Your reps will have a lot more time to prospect, build relationships, and manage a larger pipeline when they don’t have to deal with admin work like updating CRM and creating contracts.

Accurate pricing and product configuration

One wrong number or missed line item seems like a small error, but it could be a very costly one.

Let’s say you’re working on closing a new client as a contract manufacturer. Their annual contract value is $50,000.

You’ve made it through three months of negotiations, demos, and sales presentations. They’ve decided to go with you as their vendor, signed the dotted line, and given you the go-ahead to start production.

But, on your quote, you entered the wrong SKU for one of the products they ordered. It’s a simple mistake that went unnoticed by both sales and the customer.

You don’t realize until they receive the shipment, and it’s not what they wanted. You have to start all over, spend extra time and resources to expedite it, and risk low customer satisfaction.

None of that would be a problem with CPQ integrated into your ERP (for product data) and CRM (for customer info) because it already has all the info at the ready.

Real-time visibility and reporting

CPQ has its own dashboards and reporting features. But CRM is where you’ll go to get the full picture of your sales process.

With CPQ integrated into your repository of customer data, you’ll have greater visibility into the quote-to-cash process and all your sales workflows.

When you enhance CRM data with insights from the quoting process, you can:

  • Improve your sales process after identifying bottlenecks
  • Test the impact of a GTM or sales strategy in real time
  • Refine your pricing strategy to achieve price optimization
  • Understand sales performance on a more granular level
  • Get a complete view of the customer and their journey through your sales pipeline, from initial contact to the final sale.

You’ll also have better financial data, since you’re combining pipeline data (e.g., sales velocity) with actual sales data from each transaction. If you know how much you’re selling, you can set quotas, build financial models, plan for future investments, and communicate to execs and stakeholders about the company’s financial health more accurately.

Seamless order management

CPQ software automatically generates BOMs, purchase orders, and invoices from quotes and contracts. Although it handles everything related to your product catalog internally, it relies on CRM to pull customer info (i.e., to address and ship the products).

At each stage of order processing, updating your progress in your warehouse management system or ERP will also update CRM. And when you ship orders out to customers, the documents CPQ processes will automatically update in CRM, and ERP will see the invoice and update your inventory figures.

Subscription management on autopilot

For companies with recurring revenue, CPQ changes the game.

Most subscription companies lump tiered, usage- or user-based, and variable pricing all into one recurring invoice. And every customer either has a different billing cycle or a prorated first period of service.

This puts tremendous strain on traditional billing systems, which can’t handle all the different variables and product options modern subscription businesses typically offer.

With an integrated CPQ-CRM sales solution, you can quote and close subscription customers like any other. And it handles billing automatically.

Plus, you can connect your configurator to your website or customer portal so customers can update their subscriptions whenever they like, and your CRM will automatically reflect that data.

Scalability and flexibility

CPQ and CRM are both cloud-based tools, so they scale up or down as your business needs change.

When you add new staff, products, services, or markets, CPQ can handle all of that without breaking a sweat and increasing manual work.

With CRM-CPQ integration in place, if you make changes on one end (say updating product data), it’ll flow through to the other end as well with no additional work on anyone’s part.

How to choose the right CPQ software to integrate with your CRM

Today, some 83% of sales professionals are using CPQ because of the tremendous benefits it yields. But your ability to get the most out of it depends on integration.

If you can’t integrate it with the rest of your tech stack (primarily ecommerce, billing, ERP, and CRM), it’ll actually create more issues than it solves. You’ll have trouble with billing, fulfillment, customer data, and financial reporting.

Here are my best tips for choosing the perfect CPQ software:

  • Make sure it seamlessly integrates with your CRM software (and other business tools).
  • Choose a platform that has all the features you need and very few you don’t (avoid underpaying and overusing).
  • Look for a low-code, drag-and-drop solution
  • Pick a tool that enables collaboration when you build and send quotes to customers.
  • Prioritize ongoing support, even if you don’t have a lot of IT infrastructure.

I’ve written another article where I go more in-depth on how to select a CPQ vendor. If you’re in the market for a new solution, I recommend heading there next.


Is CPQ part of CRM?

CPQ itself is not part of CRM. They are separate tools that perform different functions in the customer lifecycle. By integrating CPQ and CRM, you can create a cohesive and streamlined sales process.

How does CPQ complement CRM?

CPQ and CRM work together to enhance the sales process. CPQ uses product data from ERP and customer data from CRM to generate accurate quotes, turn them into purchase orders and invoices, and update inventory and sales figures to provide a complete view of the customer and their order history and your business’s financial health.

CPQ Integrations