How to Evaluate CPQ Solutions for Enterprise vs. SMB Needs

April 10, 2024

Configure, price quote (CPQ) software automates your business’s pricing and quote generation processes by creating one single platform for:

  • Product configuration and customization requests
  • Price calculations (including bundles, discounts, and contract terms)
  • Quote generation and delivery

In plenty of cases, it also handles contracting, billing, and renewals. CPQ for SaaS companies handles subscription management. And manufacturing CPQ takes care of things like bill of materials structures and production costs to calculate unit prices.

So, whether you need a simple quoting software or a robust, integrated platform for end-to-end customer lifecycle management, there’s something in the CPQ industry for you.

That’s the challenge, though. How on Earth can you choose the right one for your business?

A lot of it depends on the size of your business — enterprises generally have more complex deal structures than SMBs. And they need CPQ that supports that.

In today’s guide, we’ll look at how you should evaluate CPQ solutions based on the size of your company and how they meet your specific needs.

Evaluating CPQ solutions requires a two-pronged approach.

What I mean by this is:

  • There are significant differences between how CPQ software can serve enterprise businesses and SMBs, and the solutions on the market reflect this.
  • There are also things you need to consider, regardless of your business’s size and complexity.

Consider the typical pricing and deal structure at a smaller organization. In the SaaS space, you might use tiered pricing and a basic seat-based or user-based model. In an industry like manufacturing, construction, or professional services, you’ll probably have different pricing for each product line, maybe different levels of customization, an à la carte menu of services, and so on.

But, overall, you’ll have less complex pricing and discounting structures. And you’ll have shorter sales cycles.

At the other end of the spectrum, enterprises may:

  • Sell thousands of products or services across multiple markets/industries/geographies (e.g., product bundles with variances by region)
  • Have highly complex pricing (where you offer a base product and add-on options — and each of those options has its own pricing tiers and volume/grouping discounts)
  • Use complicated deal structures (like ramp deals for software contracts)
  • Build entirely custom quotes that include hundreds of line items, SKUs, bundles, and options

In addition to needing the functionality for them, these are things that require approval workflows, multi-step quoting, and advanced reporting.

Sales cycles also last much longer — 6-12 months is the standard. So buyer engagement is a whole different ballgame.

Core considerations for both enterprises and SMBs

No matter what, you’ll always have to consider CPQ’s core functionalities when evaluating software. Of course, what you need out of those features (and how much you need out of them) is something you’ll have to apply a critical eye to. But these are baseline considerations every business needs to make.

Let’s dive in.

Product configuration complexity

Product configuration is the first step in the CPQ process, making it a core function of every tool. When looking at a CPQ’s product configurator, you need to answer three questions:

  • Does it handle your level of product complexity? Look for single vs. multi-variable configuration support, rules engines for constraint-based and guided selling scenarios, and compatibility checks.
  • Does it have visual configuration capabilities? This is important if you’re a manufacturer, wholesaler, construction company, or another type of business that needs customers to see their products on-screen (and on the quote).
  • Does it have an intuitive user interface? Your sales reps will benefit most from drag-and-drop and point-and-click configuration tools.

A quick tip here: Don’t get dazzled by the nice-to-haves that don’t actually benefit your business. Systems with more extensible capabilities will actually make your system harder to use if all you need is a basic configuration setup. Plus, you’ll overpay for them.

Pricing rules and automation

CPQ is “rules-driven,” meaning an admin inputs rules for pricing, discounts, bundles, etc., into the system’s backend. From there, it’ll automatically calculate prices for each customer.

When comparing different solutions, you need to look for the following during sales conversations and demos:

  • Does it support your required pricing models? This might be subscriptions, price tiers, volume discounts, usage-based pricing, or any number of different elements that are part of your overall pricing strategy.
  • How many SKUs or product lines does the tool support? Some tools can only handle limited pricing rules. If you have an extensive product catalog, you need a tool that can plug thousands (or tens of thousands) of different rules and contingencies.
  • Can it automate complex pricing rules and calculations? Most CPQ solutions calculate prices based on your pricing rules, which is fairly straightforward. Enterprise tools like PROS CPQ can also help you make decisions on the fly using real-time market, vendor, and product data and AI-powered dynamic pricing.

Here, consider how often you change your prices and the percentage of custom quotes you deliver.  If you’re in an industry where prices constantly change with supply/demand, or you constantly need to evaluate product availability and market data to deliver custom quotes, you need something with more flexibility.

Quoting and proposal generation features 

Once your system runs a price calculation, your sales rep can start building the quote. Once it’s finalized, CPQ presents a professional-looking quote in just a few clicks. Your team member can send it as a PDF or HTML file, or use a shareable link.

To determine whether quoting software meets your needs, ask yourself:

  • Does it use a sales playbook with guided selling? Guided selling capabilities range in complexity, but you should be able to customize them based on who’s buying. Look for systems that can support different selling scenarios.
  • Can you create templates and branding elements? Templatizing quoting makes things easier and more efficient for your sales team. Branding on all your quotes makes you look professional (which, believe it or not, will up your win rate).
  • Are customers able to digitally sign quotes? E-signature is table stakes for CPQ software — customers should ideally be able to sign and return quotes within the same tool.

Quoting is the most error-prone part of the CPQ process because many small mistakes can slip through. Pricing errors, accidentally quoting the wrong product, or forgetting to include discounts are common mistakes that add tremendous friction. A good CPQ system should take care of most of the work for your reps, so they don’t accidentally make a typo or leave anything out.

Ease of use and implementation

If the learning curve is too steep for your sales team, they’ll never adopt the new system. And if it can’t integrate with your business software, you’ll never get the value you thought.

A few questions to ask:

  • Will it integrate with your core business systems? CRM, ERP, and billing are the main points of integration for CPQ because they directly share data and facilitate end-to-end sales cycle automation.
  • Are there APIs for additional customization and integrations? Depending on your company, you might need to look for PIM, contract management, CAD, ecommerce, self-service portal, and other types of integrations.
  • How easy is it to set up and maintain? CPQ is a complex software, but you should be able to make data changes and maintain the system with minimal support from your vendor.

In general, enterprise companies will need a lot more time and resources to implement CPQ. They have multiple business units across the country (or world), a much more complicated technology infrastructure, and far more extensive product catalogs.

Small businesses need to prioritize tools that plug in quickly and don’t require a ton of development, customization, or maintenance.

Differentiating factors for enterprise vs. SMB CPQ needs

While there are plenty of questions everyone should be asking, there are a few nuances to selecting CPQ software that SMBs don’t (usually) have to worry about.

Anything related to speed and scale, highly complex data management (like regulatory requirements), or customization needs to be a point of emphasis for enterprise companies.

Enterprise: Scalability and customization

Large companies need a comprehensive system that can handle intricate product/pricing structures, a large quote volume, and extensive automations. They also might need a system that uses AI to help make decisions on the fly (e.g. pricing optimization).

Collaboration between sales and different departments throughout the sales process is another big deal. Engineering and product need CAD automation, and communication with suppliers requires vendor portal integration.

As an enterprise company, carefully evaluate the following with your procurement team:

  • Your expected quoting volume and user base growth
  • The number of product lines, SKUs and price points you work with
  • The size and complexity of your datasets
  • Different teams involved in the sales cycle
  • Use cases for AI, advanced analytics, and forecasting
  • Regulatory compliance

Then, look for vendors that offer extended functionality for your  through custom coding and low-code development tools. Narrow it down based on which ones offer professional implementation services and support.

SMB: Quick implementation and user-friendly interfaces

Small and mid-sized businesses are best off with pre-configured solutions with limited customization options. SMBs also don’t have the luxury of hiring dedicated CPQ admins, so it’s important to find a system that requires minimal maintenance and can be set up quickly.

Ask vendors specifically about:

  • What parts of your sales process their solution addresses
  • Self-installation vs. setup services
  • Pre-configured settings and integration capabilities
  • Template creation and drag-and-drop interfaces
  • Learning curve for your sales team
  • Support levels included with the subscription

When it comes to scalability, you’ll want to look for simple tiered and user-based pricing options for growing or changing needs. That way, you won’t have to switch vendors if you grow your team or change its structure.

Enterprise: Higher upfront costs, long-term ROI

If you’re investing in CPQ for a nationwide or multinational company, the amount of data, automations, and workflows you’ll have to create, plus training and change management, will cost well into the five or six figures.

For long-term efficiency gains, though? That’s worth it.

You’ll also see returns through increased customer satisfaction, better upselling/cross-selling, and more accurate forecasting. And you’ll have an easier time making pricing decisions and optimizing your margins.

SMB: Cost-effectiveness, fast time-to-value

Small businesses should expect to pay anywhere from $50 to $150 per user per month for CPQ. That price tag should include all of the integrations and support your team needs.

If your team can pick up the software and start using it, the first value you get post-implementation should be almost immediate. Between CRM-CPQ automations, approval workflows, and faster quote generation, you’ll notice a few right-off-the-bat improvements.

Enterprise: Established industry reputation and dedicated support

When you’re a big fish in the ocean, choosing a CPQ vendor means selecting one with a long list of satisfied customers across your sector. You’re looking for highly specialized features that fit into your workflow, and that means other companies like yours are already using them.

Look for:

  • Industry expertise (and how they incorporate it into product design)
  • Case studies and customer reviews from companies like yours
  • The ability to provide customer references you can chat with
  • How they handle compliance

Enterprise CPQ vendors will also offer a dedicated account manager and support team for ongoing maintenance and updates.

SMB: Reliability and adaptability

Smaller companies benefit from vendors with a track record of reliability. Depending on the industry, you still want to consider how its features fit into your sales proces. But since you’re looking at pre-configured solutions, ease of implementation, user adoption and maintenance are the most important factors.

Look for:

  • A history of high uptime and minimal bugs
  • How long the company’s been around, with a focus on stability
  • The type of industries it typically works best for
  • Support channels and level of customer support provided

It’s worth mentioning some CPQ and CPQ-related products for SMBs are newer to the market. Sometimes, newer tools with cleaner UIs and industry-specific workflows and features are actually the better choice.

For instance, MonetizeNow is a no-code B2B SaaS CPQ tool that only came onto the market in 2021. But its simple interface, scalability, and features like rep-facing and self-service quoting and usage-based/subscription billing make it a better choice for smaller, more agile companies that are growing, executing a GTM strategy, and testing new types of products and pricing models regularly.

Security and data management

CPQ solution handles a lot of sensitive data. No matter the scale, you’ll need to control who within the company has access to it, and how that data is stored.

Depending on the industry you’re in, requirements for security and compliance vary widel. Talk to vendors about any special considerations, and their experience working with other clients who have similar needs.

  • How they store data with a focus on regional laws (e.g., GDPR)
  • Data governance and how they handle changes to data privacy laws
  • Their data encryption and risk management processes
  • How user permissions work and who has access to what data

SMBs should be especially cautious in this area. Unless you have a dedicated IT team in place, it’s best left up to vendors with strong reputations for secure data handling.

Select the right CPQ for your needs

As you can probably tell, a lot goes into choosing the right software. A lot of it comes down to the size and complexity of your business, but there are other considerations as well. Your industry, budget, and implementation timeline all play a role in selecting the right CPQ solution.

For a deeper dive into the selection process, check out my article on tips for selecting the right CPQ vendor. You can also see our reviews and comparisons to help you make a more informed decision.

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