CPQ – Pricing Methods

The right price

• Set the right price to the right product when added to the quote.
• e.g.: prices negotiated with customers

Replace price books

• with different types of customers
• large number of types and corresponding prices
• a price book would be necessary in each case
• large administrative effort

Price books and Salesforce CPQ

• when creating a quote, CPQ uses the price book as usual
• but adds price exceptions as needed
• fewer price books but still specific prices for certain customers and situations
• additionally more complex price adjustments possible
• despite many CPQ tools for price adjustment – always one price book required
  • no price available in price book
  • product is not available for selection in product selection page and cannot be added to quote
  • price can also be 0

The pricing tools

Price waterfall

• many things and Quote Line prices to influence
• therefore different price fields in the Quote Line – each field for specific adjustment

Price waterfall - fields

• each price from top to bottom influences its subsequent price – hence price waterfall

Prices according to box size

• Box up to 10 pieces = 10 €
• Box up to 50 pieces = 30 €
• Customer orders 7 pieces = 10 €
• Customer orders 11 pieces = 30 €

To do this, use the Discount Schemes tool.

Price scales – Tiers

• Name: Identification option for administrators
• Lower Bound: Lowest set that supports the layer
• Upper Bound: First quantity that the level no longer supports
• Price: Price to be set at the quota

Block prices

• Products
• All Products
• Select corresponding product
• Related
• Block Prices – Related List – Edit All

• Specify Price Name
• Specify Lower Bound – e.g.: 1
• Specify Upper Bound – e.g.: 11
• Specify Price – e.g.: 20

• Button – if you want to add another layer
• Save
• Edit
• Change Pricing Method – Block
• Save

Test configuration with appropriate rate!

Overage Rate – Overage Rates

What happens if the maximum amount is exceeded?

• Setup
• Object Manager
• Block Price
• Fields & Relationships
• New
• Currency
• Next
• Field Label and Field Name = OverageRate
• Length = 16
• Decimal Places = 2
• Next
• Next
• Save

• Product
• All Products
• Select corresponding product
• Related
• Block Prices – Related List – Edit All
• Button – to add another level
• Price Name Field – e.g.: Overage
• Specify Lower Bound – e.g. 51
• Submit Price – e.g.: 55
• Specify OverageRate – e.g.: 1 – so every quantity + 1 will be charged with 1 € surcharge

Percentage of total price“ method

• Calculate total price
• e.g.: calculate 20% of the total price
• add the calculated percentage amount to the total amount

Fields to be updated on the product

• Price Method: e.g.: Percentage of Total for the corresponding calculation method.
• Percentage Of Total (%): What percentage should be estimated for the calculation?
• Percentage of Total Base: Based on which price should be calculated? Already contains different discounts due to price waterfall.

Percentage Of Total Base

• Products
• All Products
• Select corresponding product
• Edit
• Select Percentage Method – e.g.: Percentage Of Total
• Specify Percentage Of Total (%) – enter a percentage rate
• Select Percentage Of Total Base – e.g.: Net
• Save

Test configuration with appropriate rate!

Percentages for bundles

• Use the „Percentage of Total Scope“ field in the product option to specify which products inside and outside the bundle are to be taken into account
  • None = discount on everything
  • Package = discount on package, not on options
  • Components = discount only on the package options, not on the package itself
  • Both = discount on package and contained options
  • Entire Hierarchy = discount on package, options, sub-options

Include in calculation or not

• standard = only products without subscription as part of the total sum
• can be activated with checkbox „Include in Percentage Total“ at the product

• Exclude product without subscription
  • Activate „Exclude from Percent of Total“ checkbox

Percentages – Category

• Include only a specific group of products
• then include only products of one product category
  • For this, Picklist „Percentage of tTotal Category“ must be extended by a value

• Setup
• Object Manager
• Product
• Fields & Relationships
• Select Picklist – Percentage Of Total Category
• New – Add value
• Specify appropriate value – e.g. input devices
• Save

Now the corresponding product still has to be adjusted.

• Products
• All Products
• Edit
• Percentage Of Total Category – Picklist – Select value! – e.g. input devices
• Save
• Repeat this for all products concerned
  • So only this group will be evaluated for calculation.
  • Everything else will be ignored

Limit sum – set upper limit

• Products
• Select corresponding product
• Related
• Price Books – Related List – Edit at the corresponding Price Book
• Change List Price to corresponding upper limit – e.g. 500
• Save
• Edit
• Select Percentage Of Total Contraint – List price is maximum
• Save

Bundle prices – price adjustment for options

• Reduce price of an item if available in a bundle

• Products
• All Products
• Select the appropriate bundle – Bundles that contain the option to be discounted
• Related
• Options – Related List – select the option to be discounted
• Edit
• Unit Price – enter the corresponding price
• Save

Test configuration with corresponding products on a quota!

Limitations – multiple currencies

• Option prices do not support multicurrency!!!
• for multicurrency – use option discounts – see discounting tools

Included in the package price

• Bundle option „included“ and price equal to 0
• checkbox „Bundled“ at the bundle option
  • fixes quantity
  • Price = 0

Option prices vs. pricing methods

• if „Bundled“ is activated, then price = 0
• if „Bundled“ is not activated, then
  • block prices and percentage prices have priority
• none of the mentioned discount adjustments active
  • List price from price book

Prices

• Price control for sales staff
• no evaluation by Salesforce CPQ
• Start with basic price
• sales employee adjusts this with amount or percentage
  • he sees fixed costs with markup field (currency or %) in quote
  • negative values possible (possibly with Approval Process)
  • then corresponds to the special price

Costs – Overview

• first determine or manage costs

• Products
• All Products
• Select corresponding product from
• Related
• Costs – Related List – New
• Unit Cost – specify related costs for this product
• Save

• If no costs are specified, then these amount to 0

Release product for use for surcharges

• Reopen corresponding product
• Edit
• Select Pricing Method – Cost
• Save

The product can now be used for markups in the quota.

Negotiated prices per account – Customized prices

Contract price per product

• Account
• All Accounts
• Select appropriate account
• Related
• Contract Prices – Related List – New
• Product – select product for specific price
• Price – Specify customer specific price
• Save

Test configuration with appropriate products to a quota.

Account discount – multiple products

• Create contract price – product filter used
• Discount is given in %
• Define which products get the discount by filter rule
  • Filter field: define field to be checked on the product
  • Filter value: text to be found in the field
  • Operator: way to filter the text

• the picklist „Filter Field“ can be extended by corresponding fields (API name)

Timing

• Agreed prices are applied only at the moment of adding a product to the quota.
• are intended to fix a snapshot of the current situation.
• Subsequently changed contract prices will not be applied to existing QuoteLines.

Inheritance

• Child accounts usually inherit contract agreements of the parent account
• this can be blocked with „Ignore Parent Contracted Prices“ checkbox

Avoid overlapping contract prices

• Do not create 2 contract prices for a single product – one is
  • only one is used
  • Not controllable which

Interaction between pricing methods

• Cost + markup has priority over contracted prices
• Do not create contracted prices for products with graduated prices or total percentage prices

More flexible pricing

• Give sales reps more control over prices
  • Easily overwrite prices
  • Change pricing method

List Price editable

• „Price Method Editable“ checkbox on the product

Custom pricing method

• „Pricing Method Editable“ enabled
• Overwrites all existing pricing tools and discount tools

Optional products in quotes

• are not calculated with total sum and are optional
• Checkbox in position editor – add if necessary