Configure, price, quote (CPQ) is software that helps a salesperson build a correct quote: the right set of options, the right price and discount, and the right terms, under the company's pricing policy. It then produces the quote document straight from the deal in the CRM. The three words are the three steps: configure the product, price it, and produce the quote.
Configuring matters when a product has many options. An electrical panel, a truck or a software subscription can be put together in thousands of ways. Some options need other options, and some cannot go together. CPQ holds these rules. When the salesperson picks one option, CPQ adds the parts it needs and blocks the ones that do not fit. So the buyer is never quoted something that cannot be built or delivered.
Pricing comes next. CPQ holds the price list, the volume discounts and any prices agreed with a particular customer. It also holds the discount policy: how much discount each person may give without approval. If the salesperson wants to give more, CPQ sends the quote to the right manager for approval, and records who approved it. The finance team can later audit every discount.
Imagine a sales engineer at a Nashik company that makes electrical switchgear, the panels that control and protect the power supply in buildings and factories. A construction contractor building a hospital wants 14 panels. In CPQ, he picks the panel type and the current rating. CPQ adds the matching circuit breakers, and blocks a meter model that does not fit that panel. The list price comes to ₹1.12 crore. The contractor asks for a 15% discount. The policy says that a sales engineer may give up to 8%, a regional manager up to 12%, and only the head of sales more than that. So CPQ sends the quote to the head of sales, who approves 13%, with payment within 60 days. CPQ adds 18% GST and produces the quote as a PDF, about ₹1.15 crore in all, with the terms of delivery and warranty. The quote is ready in an afternoon, instead of three days.
After the buyer accepts, the deal moves on. The contract goes to contract lifecycle management (CLM) software, and is signed through electronic signature. For software sold as a subscription, the agreed price goes to subscription billing, which raises the invoices every month or year.
Two parts of CPQ have their own pages. B2B pricing software suggests the price a customer is likely to accept. Document generation builds the quote and the contract from the deal's data.