Optimizing Complex SaaS Product Configurations Using CPQ

In their simplest form, SaaS products handle most of the sales process on their own. PLG works well for basic tools with self-service sign-up and free trials.

But when you’re selling to businesses, both product and decision-making complexity make the process a lot harder. This is especially the case if you’re selling a customizable platform, like a CRM or integrated product suite.

Whether you’re taking a direct approach (using your own sales team) or using an indirect sales model (like channel partners), the right configure, price, quote (CPQ) software streamlines the process and makes complex product configurations more manageable.

In today’s article, I’m diving into what makes software sales so complicated and how you can use CPQ to support the SaaS sales cycle.

What makes a SaaS product complex?

A lot of factors contribute to product complexity. Before jumping into CPQ, let’s take a look at what differentiates a “complex” product from a more straightforward one.

Key characteristics of complex SaaS products

The defining characteristic of a complex SaaS product is that it requires at least some form of customization to meet the unique needs of each customer.

This could present itself in several different ways:

• Product tiers for different user levels or company sizes
• Add-ons customers can choose to include
• Microservices (e.g., a vendor selling CRM, marketing automation, and customer success software)
• Integrations with other tools or platforms
• Customizable features or workflows
• Modular pricing structures based on usage or specific needs
• Component interdependencies

With any of these variables, customers can’t make the decision on their own. They need the help of a sales rep and other members of the buying group (which, in B2B, contains 11 people on average).

Examples of complex SaaS products

To help you grasp the concept, here are some real-world examples of complex SaaS products:

• Customer relationship management (CRM) has customizable fields, workflows, and specific features for sales, marketing, service, and success teams.
• Marketing automation features various campaign options, supports multichannel marketing, and offers integrations and automation triggers for hundreds of different tasks.
• Project management software has customizable project templates, workflows, and team member roles/permissions.
• Enterprise resource management (ERP) systems have different modules and integrations for various business functions like finance, supply chain, and human resources.
• Business intelligence (BI) tools offer customizable dashboards and reporting options, as well as integrations with other data sources and analytics tools for predictive modeling or forecasting.

Now…the reason tools like these have such intricate features in the first place is that they support a complicated business function. Running a company with employees, customers, and products is highly nuanced, so the tools you use to carry out these tasks are as well.

The challenges of selling complex SaaS products

Different services and product tiers support different types of businesses. Your ICP probably has at least a dozen different types of companies that could use your service. Understanding these different segments and their needs is the first hurdle when it comes to selling complex products.

If you sell highly configurable products (like custom software), the challenge is even greater. You’re not only navigating the complexities of companies’ different sizes and industries, but also their unique needs.

Aside from knowing which types of customers are a good fit for each of your products (something they won’t know on their own), you have to manage the configuration process. Depending on the product, this could be as simple as selecting a specific pricing tier or inputting some basic company information or as complex as choosing from thousands of possible feature combinations.

When human sales reps are in charge of all these things, you’ll run into lots of problems:

• Drawn-out manual processes
• Errors and inconsistencies in pricing and product selection
• Delays getting quotes back to customers
• Difficulty keeping track of all the different components and options available
• Missed opportunities for upsells and cross-sells
• Low visibility into your product catalog

Without a tool to simplify complex product configurations and enforce standardized pricing and product configuration/selection, there’s no guarantee customers will get the right product for them, or that the product will be priced correctly.

How CPQ simplifies complex SaaS product configurations

CPQ is the perfect solution. 88% of leads only buy when they see their sales rep as a “trusted advisor.” CPQ gives your team the power to tailor software solutions to each customer’s needs and business model. And it gives your reps the info they need to be the “expert” in the room.

Let’s take a closer look at precisely how:

Automated configuration

While the actual configuration process is still rep-guided, modern SaaS CPQ systems have plenty of automation tools and features that help you streamline the process.

Guided selling is the first one that comes to mind. When reps open the system to prepare a new quote, it’ll ask them for information on the customer’s specific needs and preferences or guide them through a series of prompts. That way, it knows which product offerings to surface.

From there, rules-based validation ensures the rep doesn’t add features or products that aren’t compatible. The system won’t allow them to select anything that could cause conflicts (e.g., an add-on program that requires a software tier the customer didn’t select).

The way rules-based validation works is you set up a product catalog in your CPQ’s backend (or an admin does this). You establish compatibility rules (e.g., “If the customer signs up for this tier, they can choose the following add-ons”) and pricing rules (e.g., “upgrading to this tier gives you a 1-year discount on add-on X”).

When reps are configuring the product, the system automates everything according to these pre-established rules. And they see these things automatically, so they can use them as selling points without accidentally selling them on something that isn’t possible.

Dynamic pricing

Dynamic pricing is a model where prices change in real time based on customer behavior and requirements. In the SaaS industry, it works a little differently from, say, dynamic pricing on an airline website (where it can change by the minute).

Examples include:

• Usage-based charges that fluctuate with volume or product tier (e.g., marketing contacts, API calls)
• Seat-based pricing (like Canva’s sliding scale for the number of users)
• Enterprise product tiers with custom pricing for each customer
• Discounts, whether they’re per-customer, quantity-based, or standard offers
• Ramp pricing for deals that fluctuate in value over time

These things all contribute to a final cost that’s 100% unique to each customer.

SaaS CPQ platforms facilitate dynamic pricing strategies by supporting complex product options and customizable product configurations. Within your system, you can set specific pricing rules and even create custom price books for different types of customers or circumstances.

You can even configure automated approval routing and set limits for dynamic discounts. That way, your sellers can have more flexibility when closing deals while you protect your margins.

Quote generation

Of course, one of the main features that makes CPQ software so effective is its ability to instantly generate quotes.

Building quotes from complex product configurations is quote difficult because there are so many variables involved, like:

• Multiple product tiers and add-ons
• Dynamic pricing rules and discounts
• Customized configurations for each customer

With CPQ, you can design your own quotes from templates, include your branding, and create customizable layouts that suit your needs. Once you’re satisfied, the system creates a PDF quote that includes all the pricing and product details, ready to send off for customer review.

You only have to set it up once — after that, it’ll generate it the same way every time.

Sales enablement

In addition to the complex product configurator, CPQ offers residual tools that streamline the sales process and help your reps provide more value during sales conversations.

• Guided selling tools present the correct options for each customer, every time. It also presents upsell and cross-sell opportunities, which could potentially increase the deal size.
• The product knowledge base gives your team information on each product and how it could benefit specific customers. That way, they can explain the product’s features, capabilities, and potential use cases to your customers.
• Sales training materials make onboarding fast for new reps and keep your existing ones up to date on best practices and new product releases. All you have to do is update the system and this info is immediately distributed to your whole team.
• Sales playbooks are a feature some SaaS CPQ providers (like DealHub) offer. Playbooks help reps develop better relationships with customers. They’re more likely to view your reps as advisors when they can correctly qualify them and address specific pain points and objections at the right moment in the sales cycle.

Integration with CRM and other systems

The best thing about CPQ is that it integrates with all your other sales, finance, and customer-facing systems.

CRM, ERP, and ecommerce integrations allow for real-time data exchange between systems, so your reps always have the most up-to-date information on customers, products, and pricing. And billing/subscription management integration automates the flow between the quote, the transaction, and the recurring billing cycle.

Some CPQ systems even support billing and subscription management natively. With a tool like DealHub or Subskribe, you can actually automate subscription billing within CPQ.

CPQ best practices for selling complex SaaS product configurations

To unlock the true ROI of your CPQ software, you have to do more than just install it and plug it into your sales workflow. Since you’re selling a complex product, there’s actually a lot that goes into CPQ implementation.

Define clear rules and product dependencies.

Depending on how many different products, add-ons, and special offers you have, this might take some time.

You need to take all your existing pricing and “rules” and incorporate them into your CPQ system. From there, you have to make sure that the price is always updated based on the products they’re adding or removing.

It helps to start by creating a map, where your core products are at the center and all your add-ons branch out from there. You can then create specific rules for how each of these products interacts with the others, which discounts apply in which circumstances, and so on.

Audit and maintain your product catalog.

You have to periodically review your product catalog to make sure it’s up to date with your latest product lineup. You also want to make sure that all your prices are correct.

You probably didn’t forget to add your new product (because otherwise, how would your team sell it?). But you might have forgotten to remove products that you no longer sell, or update a discount that’s no longer valid.

CPQ should be connected to your CRM and ERP systems, which makes it easier to track products, customer preferences, and pricing.

Keep the user experience in mind.

User-friendliness is one of the most important considerations because if your reps can’t navigate the system, they won’t want to use it. Even if product adoption is successful, it won’t be used to its full potential.

I recommend involving end users in the CPQ selection process from the very beginning. That way, you can go into your product search knowing what your team is looking for, and they can test different solutions before you finally settle on one.

As a plus, they’ll already be somewhat familiar with the tool once you begin implementation.

Choose your pricing strategy carefully.

While you can’t do much about how complicated your product is, you can make sure your pricing model is as easy to understand as possible. Avoid complicated pricing structures with hidden fees and confusing discounts.

Every aspect of pricing should have a clear rationale, and there should be as few steps between your reps and the final price as possible. Not only will your customers respond well to clear pricing, but it’ll be easier to set up your CPQ system.

Regularly review your analytics.

To see what kind of impact your product configurator has on your overall sales process, you need to track productivity and sales metrics. This way, you can see which products and pricing options are most popular, how often reps upsell or cross-sell, and how long the sales cycle takes before and after implementation.

Optimize your SaaS sales workflow with CPQ.

Choosing the right CPQ requires careful consideration of your product, sales process, and overall goals. As a SaaS company, your main considerations should be:

• Recurring billing and subscription management capabilities
• Integration with your CRM and other systems
• User-friendliness for your reps
• Extensibility to handle flexible product configurations

A few of the best options include DealHub, Zuora, Nue.io, and Subskribe. But we strongly advise you to do your own research before making a decision.To get started on the right foot, check out our extensive list of SaaS CPQ reviews and product comparisons.