All SaaS companies need a CPQ eventually... or so they think. But how do you evaluate vendors based on the unique needs of SaaS companies?
Remember, CPQ software was originally designed for selling manufacturing equipment and companies with 100's of SKUs. Not software companies with subscription and usage-based pricing models.
But legacy CPQ's have adapted over time, and new companies emerged that are designed specifically for scaling SaaS startups.
In this post, we'll focus on the top 4 criteria that SaaS companies should use to evaluate CPQ software.
[We covered how to evaluate CPQ vs a modern alternative in a previous guide. If you want to learn what a CPQ enables and the pros and cons, check out that guide.]
SaaS subscriptions are dynamic. They can expand or shrink -- even within the first year. This is especially relevant for products with usage-based pricing. Most CPQ's are designed to sell subscriptions and products that will not change. This introduces a ton of extra work to make changes to customer subscriptions and negates time savings from the automation of quote configuration.
When renewals come around, the goal is to grow the subscription. But just like closing the first sale, too much friction will prevent your customer from paying more. Or worse, they may not want to renew at all.
To solve this, your CPQ should make it easy to...
Automated billing is also crucial for SaaS subscription management. You want the CPQ to be able to trigger automated invoicing, direct debit payments, and overage notices (to name a few).
Without automated billing, your sales team will be more efficient, but your finance department will have more manual work, which also leads to more human-prone errors.
Don't get stuck with a CPQ that requires complex rules and code for updates.
SaaS teams run lean, especially seed-stage to Series A. It's easy to end up paying more for RevOps consultants than the actual software license for more technical CPQ's. You want someone internal to be able to admin the CPQ without bringing on additional headcount.
SaaS companies also test and update pricing models often. This needs to happen fast, and delays caused by waiting for 3rd parties to update logic branches or code won't cut it.
And don't forget about the people using the CPQ every day -- your sales team! To recognize ROI from a CPQ investment, it needs to actually to be adopted by everyone. The more intuitive the UX is, the faster full adoption happens.
SaaS companies tend to use a lot of other software tools in their RevOps stack. If your CPQ can't connect to your core tools, data hygiene becomes a new problem.
Your CPQ should be able to bi-directionally sync with your...
But what if you're craving more automation? That's where API's come in. Some CPQ's keep this locked down, but others will allow open access to customers (like Cacheflow does).
The possibilities are endless with API access, but these are some of the everyday use-cases our customers use...
As a SaaS company in 2023, your CFO will likely not approve major expenses (no matter how good of a ROI case the vendor makes). We're an early-stage company too, we get it.
But what if your CPQ could actually save you money? Now, it's easy for finance to approve.
To do this, your CPQ needs to actually replace other costs, and not just be a new point solution.
This could be...
Some subscription management platforms charge an additional 1% in fee's. And that's on top of any payment processing fee. [Cacheflow negotiates discounted rates with Stripe for our customers]
If your SaaS company is growing fast, you want a tool that is flexible enough to keep up and affordable enough to get started today. No implementation projects. No delays for testing new pricing. No sticker shock from enterprise prices.
But as your sales org grows, you'll want guardrails to deliver correct pricing, legal agreements, and discounts. This is where approval flows, and templates start to become more important.
Cacheflow was built for SaaS companies from the start. It's flexible where it needs to be and standardized where it matters most.
And like you, we're also a growing SaaS company. The product is constantly improving, and our team actually works closely with you to find new features that add the most value.
Cost shouldn't be a major barrier either, and we want you to be able to get started today. That's why we have a Startup Accelerator plan for less than $500 per month.
When SaaS companies demo Cacheflow, they tend to get excited and say, "I've been looking for something like this forever!"
Don't believe us? See for yourself and schedule a demo with our team!
