The 3 Options for Quoting: What’s the Right Choice For Your Company?

by

Matthew Mitchell

   |    

June 11, 2024

The 3 Options for Quoting: What’s the Right Choice For Your Company?
The 3 Options for Quoting: What’s the Right Choice For Your Company?

When evaluating your organization's internal quoting process, you only have 3 clear choices: continue to quote manually, build a homegrown quoting tool/process, or buy a Configure Price Quote (CPQ) platform.

With multiple options at your disposal, and even more variables to consider, the immediate question becomes: ‘What’s the best choice for my team?’.

Manually Quoting:

SaaS startups tend to keep manual processes in place until they hit a major roadblock or a bottleneck that slows down their sales cycles, but is this the right way to operate?

Although products, pricing, packaging, discounts, etc. may be in flux during the earlier GTM stages of the company, quoting manually can put your team at a disadvantage.

What are some of the negative effects of quoting manually?

Human Error

  • Wrong pricing, billing terms, and incompatible bundles get proposed to customers.

Unclear Quotes & Order Forms

  • Quotes and order forms are sent to customers and serve as your first impression, immediately reflecting your business.

Lack of Visibility into Discounting

  • How do you know what price points are sticking when the discounts frequently vary or pricing is so fluid?

Unnecessary Time Spent on Manual Work

  • Manual quote updates take at least 15 minutes per opportunity for each round of quoting. This time accumulates quickly and could be better spent generating net-new ARR to grow your business. 

Increased Work When Transitioning

  • When you outgrow your manual quoting flows, the effort to transfer previous customer information into your new solution will only multiply from the point you first evaluated your processes, creating more work and backtracking.

Building a Homegrown CPQ:

When considering building a homegrown CPQ your reasoning is often: 

‘I have a capable team member who’s already paid a salary, so why not make them do the work?’

Seems logical, but there are many faults to this approach as well.

Time Diversion

  • Critical team members are diverted from their primary responsibilities to manage the quoting tool.

Scaling Challenges

  • As strategies shift, scaling operations becomes increasingly difficult. The tool, built for a primary use case, becomes more brittle with added complexity. 

Knowledge Gaps

  • If the team member who built the quoting functionality leaves, who will have the expertise to maintain or enhance it? (Let’s be honest, documentation is rarely as comprehensive as we’d like.)

Channel Expansion

  • How will your homegrown tool handle new sales channels (e.g., self-serve or partners/resellers)?

Focus

  • You’re already building one SaaS platform that you specialize in; you shouldn’t be focused on building toolsets that you’ll eventually outgrow.

This isn’t to say you shouldn't have faith in your team, but will building your own quoting tool provide you with a competitive advantage, and is it the best use of your company resources? Homegrown tools are often quickly outgrown, making this approach less viable.

You shouldn’t build a process that your team will inevitably outgrow, nor should you have to create a new process every time you launch a new product. 

Buying a CPQ or Quoting Tool:

Purchasing a CPQ is a great way to gain control over your operations, but not all quoting tools are created equal. At a minimum, your quoting solution should:

Ramp Up Account Executives

  • Guide your reps through selling with suggestions and validation/discounting/approval rules to maximize revenue opportunities and prevent errors.

Create Accurate, Clean-Looking Quotes Quickly

  • Generate quotes in less than one minute, eliminating the need to search for the latest version in your Google Drive. 

Automate CRM Updates

  • Automatically update the appropriate fields within the opportunity/deal in your CRM.

Ensure Accurate Forecasting

  • Provide accurate forecasting at every stage of the deal.

However, there are two common concerns when purchasing a CPQ:

  1. Time & Cost: Most CPQ tools not only require a budget for their purchase but also incur additional hidden costs for implementation and maintenance because most CPQs were initially built for transactional sales, not subscriptions/recurring revenue.
  2. Scalability: In high-growth mode, operations frequently change. A labor-intensive toolset that needs constant adjustments may not be feasible. 

These are reasonable concerns, but they stem from purchasing a “one-size-fits-all” CPQ solution (basically any CPQ you can name off the top of your head).

As a B2B SaaS organization, you need a CPQ specifically designed for B2B SaaS. It’s like having tailored clothing instead of a one-size-fits-all jumpsuit.

A CPQ that’s built specifically for B2B SaaS (like MonetizeNow) will help your team with:

Efficiently Managing Customer Lifecycles

  • Your CPQ should track your customers’ purchase history so all information is seamlessly passed to Amendments and Renewals preventing information loss across opportunities. 

Flexible Product Catalog

  • Have a flexible product catalog to quickly implement changes as your product/packaging/pricing strategies evolve. 

Pre-Loading New Offerings

  • Have the ability to pre-load new offerings prior to their launch dates, and control when they can be sold.

Managing All Sales Channels

  • A CPQ should manage all channels of sale. You’re selling the same product regardless of the avenue the customer comes through, so you shouldn’t need a different tech stack for each.

Quick Implementation

  • Your CPQ should be quick to launch and shouldn’t require a consultant or full-time employee to implement and maintain. It should be configured to manage your operations and adapt to any strategy shift, without anyone worrying about code. 

Ultimately, whether you choose to stick with manual processes, build a homegrown tool, or invest in a CPQ, it’s crucial to select the option that aligns with your team’s needs and supports sustainable growth. 

P.S. - Don’t forget about your friends in Finance! 

I know we’re talking about quoting, but Finance operates on the output of your sales function, so they shouldn’t be siloed from one another. Since your quotes have all the structured data required for your invoices, your CPQ should automatically pass this information to invoices for automated billing to eliminate double work across teams.

About MonetizeNow

Founded in 2021, MonetizeNow is revolutionizing GTM operations for B2B SaaS Enterprises of any size. At MonetizeNow, our mission is simple: to make B2B commerce completely frictionless and provide a delightful experience for your customers to do business with you. 

Our innovative platform combines Quoting/CPQ, Metering, Billing, and Reporting, to deliver a truly plug-and-play Quote-to-Cash experience across all sales channels.

It’s time to empower your Sales, RevOps, and Finance teams with an all-in-one solution that will revolutionize your entire business. Reduce manual tasks, allowing a stronger focus on strategic pricing and innovative GTM strategies. Generate complex quotes quickly and enjoy full automation of your billing processes. Easily handle proration, co-term agreements, and renewals for seamless operations.

Get back to focusing on value. If you can build it, you can sell it with MonetizeNow.

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