The healthcare industry operates in a unique environment where precision and efficiency must be balanced carefully with privacy and compliance.
Between industry pressures and regulatory considerations, manual processes and traditional sales tools can make a difficult process even more challenging.
That’s where CPQ solutions can help!
Configure, price, quote tools are designed to automate and streamline complex sales workflows.
By tackling these problems, vendors, suppliers, and providers can instead focus on delivering better care and value.
Let’s take a closer look at how CPQ software works, the benefits it brings to the healthcare industry, and what to look for when choosing a CPQ solution.
What is CPQ software, and why does it matter in the healthcare industry?
Short for configure, price, quote, CPQ software is designed to expedite the entire sales process by streamlining the creation of accurate quotes from complex products.
In healthcare, this can be a huge time saving for distributors, who already handle roughly 92% of pharmaceutical sales from as many as 1,300 medical device manufacturers!
Generally speaking, CPQ is broken into three unified components:
- Configuration of goods/services orders from a product catalog.
- Pricing calculations determined via custom rules.
- Quotes created through use of a builder or preset template.
These basic functions might be combined with additional features, such as the electronic signature and payment functionality seen in PandaDoc CPQ, or the CPQ software might stand apart from other uses.
CPQ systems are designed to automate most of the behind-the-scenes calculations and tedium required during the quoting process.
Using these tools, sales teams can shorten sales cycles and improve the buying experience while paying more attention to customer needs.
Especially when combined with CRM and ERP systems, CPQ can create a smooth user experience that accelerates the speed of the entire medical supply chain.
How CPQ improves workflows in healthcare orgs
Every distributor wants to move quickly and deliver exceptional service, but that can be a big ask in such a busy market.
And that sentiment is shared across the industry.
Over 40% of healthcare providers feel that ongoing supply chain disruptions, backorders, and product shortages will be the largest operational challenge for their organization in the coming years.
A top-notch CPQ implementation can go a long way toward easing customer concerns by helping distributors stay agile and respond in real time.
Here’s where CPQ can make a huge difference for distributors and suppliers.
Streamlined catalogs
For a lot of distributors, medical equipment is just one sector of the business.
Sales reps need to quickly navigate to relevant products, gather product information, and compile those details into a quote that aligns with customer needs.
Most CPQ solutions help with this by allowing for the creation of categories, tags, and item descriptions within the product catalog.
This eases navigation and can help reps better find their way around the software.
In the case of new products, adding descriptions and images to the entry can help with visualization and knowledge, so reps better understand what they’re selling and how it helps the customer.
This process is far more efficient than skimming through multiple spreadsheets and transcribing requested products into a template inside Microsoft Word.
With CPQ, products can be sorted, selected, and added to a quote all from one place.
Accurate pricing — at scale
Convoluted pricing in healthcare can be as frustrating for distributors as it is for patients.
Factors like regional differences, account-based discounts, volume pricing, or specialized shipping costs can cause orders to fluctuate wildly from their baseline costs.
When reps miscalculate or overlook these details, those mistakes detract heavily from the bottom line.
CPQ solutions get around this with rules-based, automated pricing.
On the system backend, administrators can set rules that automatically factor for things like shipping distance, discounts, or local tax rates.
These details are updated automatically as orders are built, so reps don’t have to worry about missing the little things.
Because these rules are programmed into the system, they scale across your entire system.
Sales teams across multiple departments and locations can rely on the same rulebook, so pricing is always consistent.
Fast, professional quotes
Inaccurate or poorly formatted quotes slow down sales processes and lead to intense customer frustration.
That’s why it’s best to generate accurate quotes through automated processes rather than building them by hand.
CPQ systems make this easy with quote templates.
Administrators will select a pre-built template, and the CPQ will add all information to that template at the end of the sales process.
The output will be a quote that reps can offer directly to customers.
Usually, it’s possible to rebrand or format the designated quote template in limited ways, but this varies between software.
PandaDoc offers more customization than most alternative solutions because of our built-in document editor.
Teams can create documents entirely from scratch so proposals are always on-brand and perfectly targeted toward customers.
Quote generation is a critical part of how CPQ solutions save time.
Templates allow for scalability and automation, ensuring that documents can be generated in minutes and with minimal effort by sales reps.
Some CPQ solutions can further accelerate the sales process by enabling e-signature functionality for generated documents.
End-to-end integration
The ability to integrate CPQ with existing systems can be critical for suppliers and distributors.
Extensive product inventories and customer lists, as well as multiple points of sale (e-commerce, direct order, custom solutions, etc.), make it all the more important to ensure good data flow.
Unfortunately, most CPQ solutions won’t integrate directly with ERP or EHR systems.
Instead, they usually connect through a CRM to the rest of the tech stack.
In some ways, this makes sense, as it ties the quoting and ordering process to the customer record and purchase history.
However, it also means that CRM solutions will play a greater role in things like inventory management.
When using a tool like PandaDoc, which offers full integrations with HubSpot, Salesforce CPQ, and similar solutions, you’ll need to ensure that orders generated through the CPQ process are noticed by your other systems so that business operations continue to flow smoothly.
Advanced reporting insights
As in many industries, data-driven decisions are critical in healthcare sales.
In addition to streamlining the ordering process, some CPQ solutions offer detailed reporting and analytics to help organizations identify trends and pinpoint inefficiencies.
This is essential in sectors where profit margins are razor thin and competition is highly competitive.
Especially if CPQ governs the primary sales channels for your business, the ability to generate forecasts, gain insights, and better understand customer purchasing habits are critical to operational success.
The type of reporting and optimizations you can expect will depend on your CPQ platform you choose.
For example, PandaDoc CPQ provides document analytics data so that teams can learn how users interact with generated quotes.
We also offer sales dashboards and advanced reporting so that administrators can better understand what documents are being used and which reps consistently close deals.
In other CPQ solutions, data may be more limited, as the scope of the software is smaller.
Where is CPQ most useful in healthcare?
It’s estimated that traditional distributors handle over 80% of product distribution for the healthcare industry.
That’s huge, and it speaks to the intricacies of the market.
CPQ solutions excel in industries where complexity, customization, and compliance are central to business operations.
In the healthcare sector, this could include everything from hospital procurement to medtech sales and beyond.
When placed against these obstacles, CPQ helps companies save time, reduce errors, and deliver greater value.
Medical device sales
Selling medical devices often requires configuring intricate, customized solutions meant for a specific provider or patient group.
For instance, hospitals may request tailored imaging machines, surgical tools, or monitoring equipment that aligns with the facility’s capabilities or unique requirements.
When used at the provider level, CPQ software can simplify these configurations by helping to ensure that product combinations are valid and compliant with current regulatory standards.
Additionally, CPQ can automate pricing for customization, bundled services, and volume discounts, so sales reps can easily generate accurate quotes suited to a customer’s needs.
By eliminating common obstacles, CPQ helps medical companies close deals faster while maintaining a high level of precision.
Healthcare IT solutions
In modern medicine, IT solutions like EHR systems, telehealth platforms, and cybersecurity tools are essential.
However, the components that create these systems are specific to individual providers, requiring custom configurations, pricing models, and service agreements.
CPQ software can simplify this complexity by allowing sales teams to design and price IT solutions quickly and efficiently.
Because these systems are highly flexible, it’s possible to offer quotes for everything from subscription-based software to integrated hardware/software packages with ongoing support through a contract lifecycle.
These solutions are naturally complex, and what makes sense for one location may not make sense for another — even if both are owned by the same company.
Using CPQ, teams standardize product offerings or create bundles for even faster product selection, reducing delays while providing exceptional service to clients.
Insurance plans and services
If healthcare is complex, insurance is no exception.
Pricing structures for insurance are influenced by geography, employer contracts, coverage needs, government regulations, and much more.
CPQ can play a pivotal role in this sector by automating away most of the complexity around pricing.
Using this approach, insurance providers can create personalized plans for patients, employers, or entire organizations.
By utilizing rules within CPQ software, providers can account for variables like premiums, deductibles, and regional adjustments, so most pricing calculations are automated.
This streamlines the process of creating orders and ensures that every quote is precise.
Personalized medicine
Prescriptions and medications specifically designed for individuals and their unique medical profiles are rapidly transforming healthcare.
These services are highly specialized, since they may require advanced diagnostic tests, genetic therapies, and bespoke treatments.
This adds an additional layer of complexity to the ordering process, as this field requires a new level of precision and flexibility during product configuration.
CPQ can support these innovative approaches to individualized care by helping providers and suppliers negotiate the finer details around pricing and coverage.
In these scenarios, bulk ordering and add to cart options — a la ecommerce stores — aren’t sophisticated enough to support patient needs.
To provide a great customer experience, suppliers will need to add an additional level of granularity to their quoting process — and that’s where CPQ excels.
Choosing the right CPQ for your healthcare business
Selecting the right CPQ solution for your organization is essential when optimizing your sales process.
There are numerous options on the market today, but you’ll want to focus on the features that address the unique challenges and requirements of the healthcare industry.
As most CPQ solutions can work across multiple markets, here’s a closer look at the essential features to look for.
Custom workflows and automations
Healthcare sales processes are often highly specialized, requiring specific approvals, compliance checks, and custom configurations.
The right CPQ should offer robust workflow automation tools that can be tailored to your specific, organizational needs.
For example, in addition to helping teams automate the quoting process, PandaDoc CPQ allows users to create custom workflows that manage data within quote templates and forms.
This helps to ensure that the appropriate information syncs across from a CRM, eliminating the need for manual inputs.
Similarly, most CPQ solutions allow automated rules to trigger a review and approval process so that abnormal quotes receive a second level of scrutiny before being sent to customers.
Because these parameters are custom and are based on the rules your team sets up, they can be completely customized to suit your business needs.
HIPAA / GDPR compliance and onboard encryption
If your organization handles customer data, you’ll need to make sure that the data transferred to your CRM is compliant with local regulations regarding data privacy and encryption.
Many CPQ solutions offer some data security, but fully compliant platforms are be harder to find. PandaDoc stands out as one of the few platforms in this category that is fully compliant with modern privacy and security regulations.
Before adding a CPQ solution to your tech stack, take the time to ensure it conforms to all regulations around customer data.
Intuitive user interface
Introducing new and unfamiliar software can cause massive headaches for sales reps.
Many CPQ solutions are overly complex and unintuitive, and the learning curve required to use them effectively takes additional training. During this period, sales teams are less productive and business can suffer.
New hires are also forced to endure a longer onboarding period while they learn the software.
This can be avoided by focusing on CPQ solutions centered around easy-to-understand design principles.
When the software is easy to adopt, reps can pick it up in a short amount of time or after a brief product overview.
At PandaDoc, we tackle this by simplifying the standard user interface.
Most reps will only need to learn the basics about the product catalog and the quote generation tools.
More advanced features, such as from-scratch document editing or the ability to add products to the catalog, are gated behind higher level access.
This ensures that reps aren’t overwhelmed with too many options while limiting their ability to impact the core functionality of the CPQ.
Scalability and versatility
The best CPQ solutions are versatile enough to scale with your business and adapt to changes as you grow.
Unfortunately, many CPQs can struggle with that if they’re too niche or designed around a single market focus.
The right solution can help you sort out product complexities and streamline operations across multiple locations and operating conditions.
For example, PandaDoc CPQ has no limit on the number of rules that can be used for a given quote.
This means that it’s possible to calculate tax, discounts, and shipping costs for products based on location, account longevity, and similar factors.
When a rep configures an order, these rules can be applied to the quote based on customer data provided by your CRM, such as company name and address.
By incorporating multiple rules, it’s possible to account for all variables around pricing and ensure more accurate quotes.
Simplify your sales workflow with PandaDoc CPQ
Between managing an overwhelming product catalog, building custom solutions, and compliance regulations, healthcare suppliers and distributors face huge challenges.
These issues will only grow more complex as healthcare becomes more personalized and specialized.
CPQ can help to offset this growing complexity by helping businesses manage their sales process with efficiency, accuracy, and scalability in mind.
If you’re looking for a CPQ solution that can help you overcome those challenges, we’d recommend giving PandaDoc CPQ a look.
Our platform can help reps build professional quotes using a rules-based system and an easy-to-learn interface.
Between seamless integrations, custom product configurations, and top-notch data security, PandaDoc can help you build incredible deals in record time.
Frequently asked questions
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CPQ software automates pricing by applying user-generated rules and pricing to a quote.
When administrators add products to the catalog, they’ll upload product descriptions, images, and any relevant pricing information. Within CPQ, rules can be used to calculate things like shipping information, discounts, and taxes.
As reps build a quote, these rules are automatically applied to a given order.
However, for the system to work, administrators will need to set up the rules and ensure that pricing is accurate. Your CPQ won’t know about updated product pricing or upcoming sales. Administrators will need to adjust those details manually.
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It depends on the CPQ.
Many leading solutions, like PandaDoc CPQ, are designed with compliance in mind. We offer built-in features around encryption and access, and all of our documents include audit trails and electronic signature functionality.
However, that may not be the case with other solutions. You’ll need to ensure that the platform you choose can comply with healthcare regulations, especially if the platform will handle sensitive data.
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Yes, when set up correctly. Most CPQ platforms can use rules-based logic to prevent invalid product or service configurations.
To do this, rules are set up so that the presence of one product on a quote invalidates the present of another product. (In essence, the rule would say: If Product A is on the quote, Product B can’t also be on the quote.)
While this reduces the risk of invalid or problematic configurations, these rules still need to be set up by administrators. It won’t happen automatically.
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This will depend on the systems you use.
Many CPQ systems integrate flawlessly with CRM systems but can’t talk to EPR or EHR systems directly. Instead, you may need to rely on your CRM as a go-between for more critical systems.
For example, if your CPQ software connects with your CRM, closed / completed quotes within your CRM could signal to your ERP system that inventory needs to be removed from existing stock to fill an order. The process is still automated, but it may care through multiple different systems in order to finalize.
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Typically, this is done through quote rules.
To do this, administrators will need to set up rules based on a specific piece of data, such as a customer account name or a specific region.
Then, as the order is configured and those identifiers are applied, the price is adjusted automatically. It’s that easy.
Disclaimer
PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDoc services are governed by our Terms of Use and Privacy Policy.
