How does CPQ handle discount management?

CPQ, which stands for Configure, Price, Quote, manages discounting through the application of predefined rules and limits. This system allows companies to establish specific criteria under which discounts can be applied, ensuring that discounts are not arbitrary but rather align with the organization’s pricing strategy.

By utilizing predefined rules, CPQ ensures that sales representatives can quickly generate accurate quotes while adhering to corporate pricing policies. These rules might dictate the maximum discount percentage available for certain products, the conditions under which discounts can be offered, or guidelines geared towards specific customer segments. This automated approach minimizes the risk of inconsistent discounting, which could lead to revenue loss or pricing disputes.

In contrast, other methods, such as consulting with a pricing manager or taking manual entries by sales representatives, could introduce inconsistencies or delays in the quoting process. While offering discounts based on customer loyalty can be part of a broader pricing strategy, it is not the primary mechanism by which CPQ systems manage discounts. Hence, the use of predefined rules and limits is essential for maintaining control over discount practices within CPQ systems.