CPQ (Configure-Price-Quote)
Configure-Price-Quote (CPQ) software automates the process of configuring product options, calculating accurate pricing (including discounts, bundles, and custom terms), and generating professional quotes. It connects your sales process to your billing system, eliminating manual pricing errors.
Why CPQ (Configure-Price-Quote) Matters for SaaS Companies
Manual quoting creates three problems: it is slow (delaying deal cycles), error-prone (incorrect pricing leaks revenue), and inconsistent (different reps quote different prices for the same product). CPQ solves all three. For Seed to Series B companies with growing sales teams, CPQ prevents the pricing chaos that comes with scale.
An Operator's Take
CPQ became essential at one engagement when we discovered enterprise reps were quoting custom prices in spreadsheets — and every third quote had a pricing error. Some errors favored the customer (revenue leakage), some favored us (angry customers). We implemented a CPQ workflow that pulled approved pricing from a central database, applied discount guardrails, and generated quotes that fed directly into billing. Quote errors dropped 90%, deal cycle shortened by 12 days, and we eliminated $95K in annual billing discrepancies.
Common Mistakes
What I see go wrong at Seed to Series B companies.
Building CPQ too early. If you have fewer than 3 pricing tiers and no custom enterprise deals, a pricing page and Stripe are sufficient.
Implementing CPQ without connecting it to billing. If the quoted price does not automatically flow to invoicing, you are just moving the manual step downstream.
Over-constraining discount authority in CPQ. Allow reps to offer discounts within approved ranges — too many approval requirements slow deals without preventing meaningful revenue loss.
What to Do This Week
Concrete steps you can take right now.
If your sales team generates more than 20 custom quotes per month, evaluate whether a CPQ tool would reduce errors and speed up deal cycles.
Audit your last 30 enterprise quotes for pricing accuracy. Compare quoted prices to standard pricing. If error rate exceeds 5%, CPQ would prevent revenue leakage.
Map your quoting process: how long does it take from pricing request to signed contract? If more than 5 business days, CPQ can compress the cycle.
Related Resources
Try These Tools
Further Reading
Frequently Asked Questions
When does a SaaS company need CPQ?
You need CPQ when: your sales team generates more than 20 custom quotes per month, you have complex pricing (usage-based, multi-product bundles, volume discounts), different reps quote inconsistent prices, or your quoting process takes more than 3-5 days. Most companies need CPQ around $3-5M ARR or when the enterprise sales motion begins.
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