SaaS contracts are anything but simple. They're a mix of different products, varying quantities, and unique timeframes. It can be a real headache to calculate the cost accurately and present it clearly to customers. 

Plus, SaaS contracts often have special terms like free trial periods, discounts that change over time, and payments tied to specific goals. On top of that, there’s a possibility of price fluctuations.

So, how do you keep everything accurate while enabling your team to generate custom quotes fast for your customers? The answer is CPQ software.

In this article, we’ll discuss:

• What is CPQ software and why is it important? 
• The benefits associated with using CPQ software. 
• Key considerations when you want to choose one for your organization. 

What is CPQ Software?

CPQ software (Configure, Price, Quote) is a sales tool that helps you automatically create accurate and custom sales quotes. You can do all this using pre-defined rules in the software. When a sales team has a new possible buyer, the goal is to give them a personalized quote in a matter of minutes.

Here's how it works:

• Configure: Sales reps set up products or services to match what the customer needs using CPQ.
• Price: CPQ figures out the cost on the spot depending on how the product is set up. This means no one has to figure out the cost manually.
• Quote: CPQ puts together a professional quote. It includes all chosen features or services, the cost, and any deals or discounts. With everything clear, there's less chance of a misunderstanding.

Why is this important? Because it makes selling easier:

• Sales teams generate precise quotes with CPQ software, which gives them more time to seal deals with prospects. 
• CPQ software prevents expensive errors like miscalculations and wrong prices, which often occur when people build sales quotes manually. 
• When you present professional quotes, you show clients that you are a professional business to work with.

While CPQ software is powerful, it's not a magic bullet. It won't replace the need for sales reps or their expertise. The software does more than what you’d expect from a simple calculator. It's a sophisticated tool that requires careful configuration and integration with your existing systems.

Benefits of Using a CPQ Software

You want your sales team to focus their energy on progressing sales conversations – not editing word docs and doing calculations, right? This is the strength of CPQ software. Have a look at all the benefits of using CPQ software.

For Sales teams

A CPQ software primarily benefits sales teams. Here how: 

• Boost work output: Sales reps spend 72% of their time in a week on non-sales activities. With CPQ, the process of making quotes becomes automatic. It lets your team shine in what they're great at: making relationships and sealing deals.

• Better-looking quotes: Salespeople might struggle to create professional, branded documents. In the past, they often relied on outdated templates that led to errors and inconsistent branding. But with the right CPQ solution, salespeople can easily generate personalized proposals that are tailored to each customer and look great.

• Error-proof quote generation: Making quotes manually often causes errors because there are a lot of factors, such as product details, customer information, billing factors, and more. It may result in lost business and unsatisfied customers. CPQ software gets rid of this problem with automated calculations and consistent pricing to improve customer trust.

• Standardized documents: CPQ standardizes documents across the board with consistent formatting, pricing, and terms in every quote. It makes quotes easier to understand for your customers and simplifies auditing, compliance, and reporting for your team.
• Standardized data: Typical quotes are just words in a document. But because CPQ standardizes your pricing and connects to your billing systems, once a customer signs a quote generated by a CPQ, you can automate the invoicing and billing, saving your finance team 100’s of hours per year. 

For Organization's

The benefits of CPQ are not limited to sales teams. As the work of sales teams gets streamlined, it benefits the orginzation as well. Here’s how: 

• Smoother sales journey: A good CPQ system serves as the main part of your sales process linking your CRM, ERP, and other systems together. It allows data to flow and reduces bottlenecks for a seamless customer experience.

• Decisions based on data: CPQ hands over valuable insights into how your sales are performing. It allows you to monitor the success rate of quotes, recognize which products perform best, and fine-tune your pricing model. With this knowledge, you're well-equipped to make decisions to boost revenue growth.

• Managed pricing: Forget about off-the-cuff discounting or inconsistent pricing. With CPQ, you can set precise pricing guidelines and agree on workflows to ensure that each quote lines up with your company's strategy.

• Better customer experience: 43% of consumers are willing to pay more for convenience. CPQ and Order Management Systems (OMS) deliver that convenience by streamlining complex orders with multiple products and proving accurate pricing. It's a win-win for both your sales team and your customers.

Key Considerations When Choosing CPQ Software

It’s important to know how to evaluate CPQ tools in order to find the best match for your unique requirements. You must align the technology with your business goals for seamless integration, and to maximize user adoption.

1, Define clear objectives and goals

Clarify your objectives before you get into selecting CPQ vendors to demo. Are you aiming to accelerate quote turnaround times, improve accuracy, or enhance customer experience? Understanding your goals will guide your decision-making process.

Take a broader perspective. How does CPQ fit into your overall sales strategy? Think about how your business might grow and scale. Consider data security and how easily your team will adopt the new system.

Additionally, determine your "non-negotiables" (like usage-based billing or specific CRM integrations) and your "nice-to-haves" (such as webhooks, branding options, or localization). This will help you narrow down your choices and select a CPQ solution that truly meets your unique needs.

2. Establish a roadmap for integration

CPQ software shouldn't exist in isolation. It needs to communicate with your CRM, ERP, and other systems. Plan how this will work. What data needs to be shared? Choose a flexible CPQ solution that plays well with your existing technology. 

You can choose fast and flexible CPQ like Cacheflow for flexibility as you get important features like ramped contracts, advanced discounting, tiered and usage-based quotes, along with multi-currency billing. Regardless of your choice, prioritize adaptability to accommodate future needs.

3. Standardize data formats

Make sure your data speaks the same language across all your systems. This means using consistent formats and structures. It'll speed up integration and prevent errors.

Take the time to create a detailed plan for how data will flow between CPQ and other systems. This will ensure a smooth transition for going live with your new CPQ tool. 

4. Prioritize data security

Your customer and pricing data is sensitive. Protect it with strong encryption and access controls. Thoroughly test the CPQ system before and after integration to catch any security gaps. Look for companies that have SOC 2 and other similar compliance certifications. 

5. Invest in comprehensive documentation

Good documentation is an investment, not an afterthought. Keep detailed records of data mapping, integration processes, workflows, and system configurations. This knowledge base will empower your team and make troubleshooting easier.

Look for vendors that provide and maintain clean support documentation materials, including; wiki articles, video explainers, support chat bots, and more. 

6. Prioritize user-friendliness and training

Many CPQ implementations fail, because the end-users never successfully adopt the tool. If it is too difficult or time-consuming, employees will fall-back to using spreadsheets and manual steps (especially finance). 

Look for CPQ options with intuitive an UX (User Experience) that your team can easily navigate. 

The Best CPQ for SaaS? 

Tight budgets might make you hesitate about investing in new tech like CPQ. But think long-term: CPQ makes your team more efficient, speeds up sales, and prevents costly pricing mistakes. It's an investment that pays for itself.

Cacheflow was created 3 years ago in response to SaaS companies struggling with legacy CPQ systems. We believe it should be as frictionless as possible to sell your software – meaning automating admin steps, providing better buying experiences, and finding better ways to price. 

That’s why Cacheflow is a no-code CPQ, designed to be implemented in just weeks, maintained by in-house RevOps employees, and extremely easy for your go-to-market teams to use. 

Ready to simplify your CPQ experience? Schedule a demo with Cacheflow and experience the difference.