Episode 30: Pre-CPQ SNAFUs to avoid

If the phrase “CPQ” makes you cringe, you’re not alone. While Configure, Price, Quote (CPQ) software can be a game-changer for revenue operations, implementing it too early - or incorrectly - can cause more problems than it solves.

In this episode, co-host Camela Thompson sits down with James McArthur, Head of RevOps at Nue, to talk about the biggest CPQ pitfalls companies face before they actually need one. They cover:

• The most common mistakes companies make when implementing CPQ too early
• How to structure quoting processes without overengineering workflows
• Why finance should always be involved in CPQ implementation
• When to consider product-led growth (PLG) or usage-based pricing models - and when to avoid them

If your company is considering a CPQ solution, listen in before making costly mistakes.

Buying a CPQ Too Early: The Biggest Mistake

According to James, the number one CPQ mistake is buying it before you need it. He frequently sees companies with $5M–$20M in revenue rushing into CPQ implementation after hiring their first VP of Sales or CRO. The problem?

“Most of the time, the issues aren’t CPQ-related - they’re document generation and finance handoff issues.” — James McArthur

Companies with simple product catalogs and straightforward pricing don’t need CPQ. Instead, they should:

• Optimize their document generation and quoting processes first
• Use standard Salesforce objects like opportunities and quote lines
• Build a structured quoting process where 90% of deals follow a clear path

When to Consider CPQ:

‍It only makes sense when quoting complexity increases, such as:

• Heavy discounting and deal variability across regions or customer segments
• Multi-layered pricing models that require precise tracking
• Subscription-based businesses needing mid-term contract adjustments

Over-engineering Pricing Models = A Disaster Waiting to Happen

Even when companies avoid buying CPQ too early, they often overcomplicate pricing. The two biggest culprits?

1. Custom-built renewal and midterm change workflows
2. Overuse of formula fields in Salesforce

Formula fields may seem like an easy way to automate pricing calculations, but they're not!

“Formula fields aren’t real data—they’re metadata that populates on save. You can’t report on them properly, and migrating them into CPQ later is a nightmare.” — James McArthur

Instead, companies should:

• Use standard objects like Opportunity and Quote Lines
• Keep renewal processes simple and predictable
• Use workflows to populate values on update rather than rely on formula fields
• Separate document generation from CPQ—these are two distinct needs

PLG & Usage-Based Pricing: Are They Right for You?

Every boardroom conversation these days seems to include PLG (Product-Led Growth) and usage-based pricing. But not every company is a good fit.

PLG Might Work If:

• You have high transaction volume and low ACV
• Your pricing model is transparent and simple
• Customers can complete purchases and upgrades entirely self-service

PLG Won’t Work If:

• Your pricing model has too many custom variables
• A salesperson is required for most purchases
• You can’t clearly explain your pricing structure

When to Use Usage-Based Pricing:

• If your product has direct cost-per-use (e.g., compute, API calls, storage)
• If your finance team can track gross margin per transaction
• If your pricing aligns with clear customer consumption patterns

Avoid usage-based pricing if:

• You don’t have a reliable way to track usage at scale
• Your board is just following a trend without infrastructure in place to support it

For a comprehensive guide on usage-based pricing, see A 2024 RevOps Guide to Usage-Pricing and Billing.

CPQ Success Starts With Finance

If your finance team isn’t involved in your CPQ rollout, stop right now.

“If finance doesn’t want to be in the CPQ conversation, that means you’re not ready for CPQ.” — James McArthur

Why? Because CPQ is financial data, and without finance:

• You risk inaccurate revenue recognition
• You lose visibility into discounting and margins
• You create audit challenges down the road

How to Ensure Finance Alignment:

• Bring finance in before you implement CPQ—not after
• Align CPQ workflows with financial reporting and forecasting needs
• Ensure CPQ integrates seamlessly with ERP and billing systems

For more on aligning sales and billing, read Why Modern RevOps is About Sales and Billing.

Final Thoughts: Should You Buy CPQ?

James estimates that he’s talked more companies out of buying CPQ than into it - because most aren’t ready.

Before moving forward, ask yourself:

• Do we actually need CPQ, or do we just need better quoting processes?
• Is our finance team actively involved in this decision?
• Have we exhausted standard Salesforce objects before customizing?

If the answers aren’t clear, you’re probably not ready for CPQ.

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