How CPQ Can Fuel Your Startup’s Success

Startups face unique challenges when it comes to efficiency and scalability. While established companies have tested and perfected their workflows for years, younger companies don’t have much to build on yet.

And they have limited resources. So they need to make every decision count.

In late October 2024, Helsinki-based nonprofit Slush surveyed 1,000+ founders and 250+ investors across the US and Europe.

What they found:

• Half of the founders (50%) reported difficulties in attracting and converting new customers.
• As startups expanded, 38% of founders faced challenges related to scaling their operations and managing growth effectively.
• Achieving consistent revenue growth was a significant hurdle for 37% of them.

While there are countless reasons behind these issues, a significant contributor is the fact that many struggle with implementing effective tools and strategies to optimize their operations.

When it comes to scaling sales operations, developing consistent sales workflows, creating a personalized customer experience, and, ultimately, converting more prospects into long-term users, CPQ is the answer.

The #1 startup struggle: selling your product efficiently

Startups operate at a frenetic pace, juggling product development, fundraising, recruitment, and — of course — acquiring new customers (their most significant challenge after securing funding). Yet, with limited budgets and small teams, efficiency and accuracy matter more than ever.

Quote-to-cash is the process your sales team follows from (a) the point where (a) a prospect requests the initial quote to (b) the point where their payment hits your account. And it’s the biggest point of contention in your sales process.

First impressions count.

When a prospect asks for pricing, the clock starts ticking. A prompt, well-structured quote tells -potential customers you’re efficient, organized, professional, and ready to do business. And when prospects are impressed with your team, they’ll start off believing your product is solid, too.

Mispricing hurts your margins.

In the early stages of a startup, pricing can be tricky — there’s no large-scale pricing history or robust market data to fall back on. Automated quote-generation tools and well-defined pricing models help your team avoid accidentally undercharging or overcharging, which can jeopardize deals and profitability.

The sales rep’s role is as a trusted advisor.

In fact, that’s the only time 84% of customers say they’d buy from one. When team members don’t have to manually compile quote documents, they’re freed up to focus on relationship-building, strategic thinking, and refining product-market fit, rather than getting bogged down in administrative tasks.

Responding first puts you at a significant advantage.

Research from Chili Piper indicates that 78% of B2B sales go to the vendor that responds first. Every winning go-to-market strategy has speed baked into its core.

While automating lead capture and response covers the first stage of the funnel, you have to implement automated systems for proposal creation, contract generation, and billing. That’s where already-qualified leads fall through the cracks.

CPQ and your startup’s GTM strategy

CPQ (configure, price, quote) is a sales platform sellers use to select or configure products, calculate the pricing for each line item, and generate accurate quotes and proposals based on those inputs. The quotes are prospect-ready, and the system generates them in seconds.

In addition to facilitating the quote-to-cash process, its features help you optimize the buying and selling experience.

Defined workflows streamline the sales process.

One of the biggest issues with sales in a startup environment is there isn’t a very well-structured process.  Within CPQ, you can create sales workflows using its guided selling features.

With guided selling, the system asks a series of questions that put each prospect into a specific group or segment. It then presents the products or services most relevant to that grouping, and thereafter, shows complementary or required products based on the initial selections.

For your sales reps, this gives them the ability to take a consultative approach right off the bat. They can ask customers to explain their situation and pain points, then immediately present a solution and explain how it solves their problems.

Reps can tackle issues faster (often on the same call). More leads convert because the solution is already tailored. And they convert faster, meaning reps can work more deals at once.

CPQ’s rules engine guarantees accurate configuration and pricing.

Another huge issue most startups face is the lack of solidified pricing, discounting, and targeting strategies. Reps have more flexibility to figure things out as they go, which, yes, can help you achieve product-market fit. But it can also work against you.

Reps might misquote customers, give them the wrong information (and, subsequently, the wrong products), or offer them special deals that aren’t profitable for your business.

When you define product rules in CPQ, the system automatically enforces them during configuration and quoting.

• Discount thresholds
• Pricing tiers by volume
• Margin or markup minimums
• Additional features for usage-based components
• Required add-ons to a product selection (e.g., implementation fees when selling a complex SaaS product)
• Bundled pricing according to product relationships (e.g., a discount when purchased with something else)

This eliminates much of the risk of reps making mistakes. And it makes it easier to onboard new reps — they don’t have to worry about memorizing complex pricing and discounting strategies. They simply follow the rules in the system.

CPQ analytics tell you everything about your sales and product performance.

With CPQ data, you can learn a lot about how your sales reps, products, pricing strategies, and customer base are performing.

Since CPQ is the system you use to transact (and it integrates with your CRM), it provides a wealth of data that can inform future business decisions.

A few things you can learn from your CPQ’s insights:

• Which pricing results in the highest conversions
• Where customers are stifled in the buying process
• How discounting affects your margins vs. conversion rate
• Which customer segments buy certain products and services
• How each rep performs in terms of productivity and effectiveness
• Where the opportunities to upsell and cross-sell your customers are
• The length of time it takes to create/send a proposal and move through the quote-to-cash process

This info serves as the basis for higher-level selling strategy, like setting sales goals, eliminating bottlenecks in your pipeline, optimizing your marketing efforts, and aligning pricing with willingness to pay.

These features make for a more personalized customer experience…

Let’s say your CPQ analytics tell you a certain type of customer frequently buys two products together. Previously, you haven’t bundled them together. But the data also shows you conversion rates are higher when you discount, and you can still do so profitably.

In response, you decide to create a bundle featuring these two items. You program the offer into your CPQ’s backend.

From there:

1. The rep enters their customer information.
2. The tool automatically calculates the correct configuration and price.
3. It suggests the customer “bundle” this solution instead.

Now, you’ve increased your deal size, conversion rate, and customer satisfaction all in one.

…and more profitable deals overall.

From every angle, implementing CPQ software makes for a more profitable startup.

• Error reduction
• Higher win rates
• Automated processes
• Better margins on deals
• Larger average deal sizes
• Increased pipeline capacity
• Faster quote turnaround times
• Simplified order fulfillment processes
• A better customer and seller experience
• Streamlined data transfer through integrations

According to data from Oracle based on its own CPQ platform (Oracle CPQ), CPQ’s ability to automate and synchronize front-end processes can cut expenses by 10%-20%. In turn, this reduces operating costs by 1%-5% of revenue and results in a 30%-50% boost in operating profit.

Scale and innovate with ease with CPQ automation and analytics

There’s one issue standing in the way of most startups’ success: scalability.

More than 80% of startups fail to make the transition to the scale-up stage. While your internal processes need to adapt to your growth stage and company size, the tools you implement in the very beginning play a massive role in how easily you can make those adjustments.

CPQ is cloud-based, so it’s inherently scalable.

In addition to all the benefits I’ve already mentioned, modern, cloud-based CPQ software is highly scalable. It can handle increases in user volume, deal complexity, and product portfolio without compromising its performance.

By choosing a CPQ system with CRM integration and multiple pricing tiers (to serve everyone from small businesses up to enterprise companies), you’re guaranteeing agility. You can tack on features that match your needs as you grow, rather than jumping from one tool to another and reinventing your internal processes around it.

It also makes it easy to add new products, services, and strategies.

The best industry-specific CPQ solutions support diverse pricing models and packages.

• A SaaS CPQ won’t just support subscription-based pricing. It’ll feature metering capabilities and flat-rate options, so you can test consumption-based models and offer additional services.
• A manufacturing CPQ won’t just offer real-time configuration and pricing. It’ll integrate with vendor portals and allow you to create separate modules, so you can expand through strategic partnerships and test out reseller strategies.

Being able to test out new models and explore different sources of revenue without immense risk means you’ll be able to optimize your monetization strategy sooner rather than later. Long-term, your CPQ will have helped you solidify a huge competitive advantage.

You can use it to scale customer expansion.

By integrating your CPQ with billing (or choosing a CPQ like DealHub, which features a billing module within its ecosystem), you automate the handoff between sales and finance. That means you can use CPQ to automate the renewal process and remind each customer when they’re due for a contract renewal, and send them personalized upsells.

In addition to personalizing the billing experience for each customer, this means you’ll retain more of your customers (through renewal reminders) and increase the amount each of them spends with you over time (through personalized upsells).

Since the system already has all the info about each customer, this process happens without you having to lift a finger.

Grow your startup with CPQ.

As a startup founder, you’re probably looking at dozens of different ways to standardize your processes, become more efficient, and sell more effectively. If you haven’t already implemented a scalable CPQ and you’re not even thinking about it, you’re looking in the wrong place.

Configure, price, quote is among the most essential tools for go-to-market and your ongoing sales efforts, and its value only amplifies as your customer base, team, and data grow.

Ready to invest in a new CPQ for your startup? Get started by checking out my guide to evaluating CPQ for SMB vs. enterprise needs and looking at our product reviews and comparisons.