The Art of Crafting Winning SaaS Quotes

April 10, 2024

Quoting doesn’t seem like a particularly monumental part of SaaS sales. It’s normally overshadowed by flashy demos, persuasive pitches, and the close.

These are the things that get you a “yes” or “no.” They very obviously make or break the deal.

But several factors determine whether or not you’re even able to keep the conversation going with a prospect, let alone get to the point where you can ask them to sign on the dotted line.

After a sales rep crushes a demo, the buyer will ask them to prepare a quote.

Time is of the essence here. If they can’t deliver an accurate quote in a timely manner, the deal stalls. And if it’s stalled for too long, it’s lost. And they look completely unprofessional in the process.

That’s why the quoting process is so important — it’s one of the first real impressions a prospect gets of your company’s organization and attention to detail.

The challenges of selling SaaS products

SaaS products are unique in the sense that they’re subscription-based. Users pay a recurring fee to access the software, rather than purchasing a one-time license. This model comes with its own set of challenges for sales reps.

  • Pricing transparency is more difficult. Unlike traditional products with fixed prices, SaaS products often have complex pricing structures based on the number of users, features, and usage levels. This can be confusing for both sales reps and prospects.
  • Standard software has serious limitations. Most quoting tools can’t handle recurring revenue. By extension, they’re completely unable to configure multi-year ramp deals, account for fluctuations in usage, or handle grandfathering — all things that are extremely common in SaaS quoting.
  • Discounting is trickier in a SaaS context. With traditional products, discounts are usually applied to the one-time purchase price. Calculating a discount’s long-term impact based on your subscription model requires a much more complicated financial analysis compared to a one-time sale.
  • Quotes need to be customized. SaaS solutions are highly flexible by nature. However, if the quoting tools are rigid and inflexible, sales reps may struggle to effectively reflect the true value of a customizable product. This disconnect can prevent a prospect from seeing the full potential of a SaaS product, hindering the sales process.

Because of these challenges, manual quoting is quite literally impossible for software companies. Spreadsheets or standard quoting tools will (1) move the sales cycle along at a snail’s pace and (2) create countless opportunities for quoting errors.

Step 1: Understand your customer!

Buyer personas aren’t the be-all and end-all. Nobody’s ever said “Yes” because their company has 500 employees and operates in the healthcare industry. But they’re a crucial North Star that helps you understand the basics of who you’re selling to—their needs, budget, and pain points.

Before you can even think about investing in quoting software, you have to answer a few questions about your business.

  • Who are your target customers? What industries, company sizes, or pain points do you cater to?
  • What are their buying habits? How do they typically make decision, and what factors influence their purchases?
  • What are their pricing expectations? Are they looking for the cheapest option, or are they willing to pay more for added value?

Integrating CPQ with CRM creates a seamless flow between customer data and the quoting process. Through guided selling in CPQ, they’re able to quickly identify customer needs and tailor quotes to each customer. Everything about the customer automatically synced with CRM (and vice versa), facilitating a more personalized and efficient sales process.

Step 2: Mastering the quote

Although software is a big part of it, the quoting process isn’t entirely software-driven. It’s on your sales reps to take a consultative, customer-first approach that solidifies their trust in your company. While a quoting tool streamlines this process, there are three things reps need to keep in mind for every quote:

  • Structure and clarity
  • Highlighting product value over price
  • Tailoring packages and pricing

When sellers can get these on lock, they’re much more likely to close a sale.

Structure and clarity

First and foremost, your quotes need to include all the information a prospect needs to make an informed decision.

  • Buyer contact info
  • Features
  • Pricing tiers
  • Add-ons and microservices
  • Terms and conditions
  • Product descriptions
  • Additional fees (e.g., implementation, training)
  • Increasing/decreasing usage requirements (for ramp deals, seasonal businesses, etc.)
  • Discounts

Throughout your quote, make sure to use clear and concise language. Avoid industry jargon or overly technical terms that could confuse members of the buying group. Present the information in a visually appealing way, using charts and tables to break down complex pricing structures.

Highlighting product value over price

The average business uses 130 SaaS apps, as of 2022. Getting a prospect to sign up for another subscription service when they’re already managing so many requires you to shift the focus away from price and toward the unique value your product brings.

There are endless ways to do this. Ultimately, your approach will depend on the context the prospect provides during sales conversations.

For example:

  • “We really need to improve our data security.”
  • “Our current software can’t handle the volume of transactions we process.”
  • “We’re struggling to keep all our departments aligned.”

The point is to identify what matters to prospects and highlight how your product addresses that specific need. Use real-life examples and case studies to show the buyer how your product has helped other companies achieve their goals and make more money in the long run.

Tailoring packages and pricing

As a SaaS company, you won’t get far without tiered pricing. Plain and simple. But your tiers need to be structured in a way that actually makes sense for customers.

Broadly speaking, your pricing tiers should follow this model:

  • Freemium — Free access to your product, with limited features and functionality.
  • Basic — A low-priced option that provides a basic set of features and services.
  • Standard (“Pro” or “Plus”) — Mid-tier option with more advanced features and services.
  • Premium (“Enterprise”) — The most expensive and comprehensive package, with all available features and services.

When your reps quote customers with a tiered model, they have an opportunity to match your product offerings with customer needs. This makes it easier for reps to upsell or cross-sell customers, as they can easily identify which tier best meets the customer’s specific needs and budget.

The power of CPQ for winning quotes

80% of B2B buyers say they expect real-time interaction throughout the purchasing process. CPQ meets that demand head-on. By integrating CPQ with your CRM and other sales tools, you can create a seamless and efficient quoting process that helps you close deals faster.

Here are just a few of the benefits of using CPQ for quotes:

Simplified quote creation

CPQ significantly reduces the room for manual errors by automatically calculating prices and discounts based on pre-set rules. When reps build quotes for their prospects, they don’t have to worry about getting a line item wrong or adding up the total to an incorrect number.

No matter the complexity, sales teams can generate quotes quickly and effortlessly. SaaS quoting tools can handle any scenario:

  • Multi-year ramp deals
  • High-volume transactions
  • Price tiers and microservices
  • One-time and recurring fees
  • Fluctuating usage demands

And it can do this all in the same quote.

Fewer hurdles for your sales reps

There’s more to closing deals than just creating quotes. Before that, reps need to get info from prospects and configure a package that meets their needs.

Guided selling leads sales reps through the step-by-step process of collecting customer requirements and matching them with the most suitable product offerings using a set of pre-defined rules. This not only helps in tailoring the solution to the customer’s needs but also in upselling and cross-selling more effectively.

Product configuration tools within CPQ systems allow reps to easily customize products and services according to specific customer requirements. These tools can handle various permutations and combinations, making it simpler to accommodate customer preferences without the risk of error.

Dynamic pricing models automatically adjust pricing based on a variety of factors such as volume, discounts, customizations, and more. This flexibility ensures that customers always receive the most accurate and optimized pricing, reflecting the true value of the SaaS product tailored to their specific needs.

Personalization at scale

CPQ enables reps to quickly generate personalized, professional-looking quotes for each prospect. By automating the process of quote creation and tailoring it to individual customer needs, CPQ makes personalization at scale possible.

Users can even take advantage of pre-built templates as a starting point for proposals. You can customize them to include essential elements to your negotiation, like terms and conditions, testimonials, and detailed product info, all tailored to the specific deal.

In many cases, it can even generate proposals automatically, based off your product configuration.

And with the ability to easily track and analyze quote data, sales teams can continuously iterate and improve their quoting strategies based on what’s working best for different types of customers.

Beyond the quote: the art of negotiation

Two common objections are budgetary constraints and feature comparisons. Prospects frequently express concerns about the affordability of the proposed solution or may seek to compare features with competitors to ensure they’re getting the best value for their investment.

To address these types of objections, sales reps need compelling counteroffers and value-based arguments that highlight the unique benefits of their solution. This requires a deep understanding of the prospect’s pain points and business goals, which sellers can use to emphasize the product’s value proposition.

Flexibility (to an extent) is key here. You want to use these moments as opportunities to drive home the value, or your reps need options to make deals more palatable. CPQ tools provide that flexibility — admins can program certain discount and bundling options and automatically escalate deals to senior salespeople if they land outside that range.

Closing the deal and building relationships

The final stages of a SaaS sales process lay the foundation of a lasting customer relationship. First, focus on streamlining the approval process using e-signature software (or CPQ that offers it). To create a single point of access for all your subscribers, it’s also a good idea to set up an online portal for sign-ups and payments.

Once you’ve inked the deal, express gratitude and set expectations for the onboarding process. This is where you can start building your relationship with the customer, ensuring they have a smooth and successful implementation of your product.

From there, effective subscription management is key to retaining customers. Customers should find it easy to upgrade, downgrade, or make changes to their subscriptions as their business needs evolve.

Selling SaaS solutions with CPQ

If there’s one thing you take away from this guide, it’s that CPQ is the difference-maker in SaaS sales. With its ability to streamline the quoting process, enable personalization at scale, facilitate negotiation, and lay the groundwork for long-term relationships, it’s an indispensable tool for every SaaS sales team.

That said, it is not a cure-all. It requires proper implementation, configuration, and integration with other systems to work as they should. And, perhaps most importantly, it requires a knowledgeable and skilled sales team (and effective sales methodology) to harness its full potential.

If you’re in the market for a new CPQ solution, check out our SaaS CPQ comparisons for a closer look at vendors purpose-built for software sales processes.

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