Salesforce CPQ I Pricing & Discounting Possibilities I Blog

Pricing proposition is an integral element of any business strategy because it directly impacts the profit and loss of an organization. Considering the current competitive business landscape, skillfully mastering the art of pricing and discounting is essential since it can make or break an organization. Pricing isn’t about sticking a number on the product; it’s rather a strategic tool that drives sales, boosts customer loyalty, and bolsters profitability.

This becomes all the more relevant when 95% of new products flop, and 85% fail to stand out, dragging down revenue, market position, and brand loyalty. This highlights the importance of precise pricing.

Say, for instance, your sales team is negotiating a special price for a customer and needs to apply similar adjustments for future deals. Without the right tools in place, keeping track of these exceptions becomes difficult and cumbersome. Ensuring accurate pricing across the board is essential for maintaining competitiveness and capitalizing on every opportunity.

End the Deadlock with Forsys’ Salesforce CPQ Solutions

Salesforce CPQ, powered by Forsys, a premier and top-tier Salesforce partner, allows sales reps to customize product pricing with various discounts or markups, applicable across the complete quotes or individual products and groups. On a single quote line, the application of discretionary, partner, schedule-based, and custom discounts is possible. It includes eight price fields—Contracted Price, Customer Unit Price, List Unit Price, Net Unit Price, Original Price, Partner Unit Price, Regular Unit Price, and Special Price—each calculated in order to track post-discount values and enable precise pricing changes.

Hence, it is imperative to review the pricing method for tracking calculations, identifying pre-discount prices, and controlling custom calculations via price rules.

The native pricing methods that Salesforce CPQ supports for the SKUs include:

List Price

It is suitable for products with static, fixed prices that need to be retrieved from the price book entry. To make the list price editable by the sales rep, check the "Is Editable" field on the product price.

Additionally, it permits discount addition and overrides the list price at the product option level within a bundle so that a bundled product can be sold at a customized price.

Cost Price

This enables setting a price based on the product cost and adding a markup. For example, a car sales rep sets a price of $10k to earn a commission while it costs the dealer a mere $8k. This is best used when the business wants to bag a profitable markup on the manufacturing price.

Here, discounts can’t be applied and a cost price can be created from the Costs Related List on the product record where the users apply the markup on the quote line editor either in amount or % format.

Block Price

In this pricing variant, a product can be priced based on blocks or ranges of quantities. When the block-priced product is selected, and quantity is defined, Salesforce CPQ determines the best fit within the quantity range and sets the price accordingly. Even if the price editable field is selected, users can still manually override block prices.

Percent of Total/Dynamic (PoT) Price

Here, the product price is calculated based on a percent of the sum of other product prices. For instance, 10-20% is paid as a tip on a food bill when you eat at a restaurant.

To set a product as PoT, it is important to populate the following fields: Subscription Pricing, Pricing Method, Percent Of Total, Percent Of Total Base, Percent Of Total Category, Percent Of Total Constraint, Include/Exclude From Percent Of Total.

Batch Price

This pricing variant is only applicable to the bundled product options, not to standalone products. Also, it is leveraged to price component and accessory product options based on quantity ranges.

Contracted Pricing

Using product look-up fields (or for categories of products, using filter fields), account-specific pricing for a few products is allowed here. As the name suggests, this is beneficial and comes in handy when the negotiated price is implemented on the first signed contract and the customer is in favor of using the same price for future quotes. In Salesforce CPQ, the negotiated price can be used everywhere – new quotes, renewal quotes, and amendment quotes.

Multidimensional Term Pricing

In this pricing type, different discounts for different terms on a quote can be applied. For example, a three-year subscription may apply a 10% discount in the first year, a 20% discount in the second year, and a 40% discount in the third year.

Cross-Order Pricing

This enables leveraging a client’s past order quantities to set a discounted price on their new order. This is an excellent way to reward loyalty, drive repeat business, and encourage customers to return.

How Businesses are Thriving with Salesforce CPQ’s Pricing Automation

A fast-expanding cloud-based SaaS technology company relied on Salesforce to manage opportunities and Google Drive to store product configurations, pricing details, and share data related to active opportunities, affecting the sales cycle. Manually created quotes frequently needed revisions and were not tracked in real time. The fragmented Quote-to-Cash process, along with disparate tools and data sources, proved challenging.

The client utilized Forsys’ expertise in end-to-end Salesforce CPQ solutions to develop a custom solution, allowing quicker quote creation, pricing adjustments, discounts, and bundles, thereby streamlining their sales and finance processes.

Key Impact:

Automated 90% of business processes

Accelerated quote generation by ~33%

Reduced errors by ~38%

Increased sales velocity by 80%

Decreased deal cycle time by ~40%

Boosted sales productivity by nearly 25%

Halved manual tasks

Explore their full transformation journey here.

Conclusion

Whether you are setting up term-based or volume-based discounts, or simply applying particular discount schedules directly to the product’s cost, Salesforce CPQ covers all the pricing angles. With the integration of different pricing models in context with product and price rules, it supports a wide range of pricing functionality and scenarios.

Connect with us to gain an in-depth understanding of how Forsys is enabling businesses of all sizes across industries to maximize profitability and customer satisfaction with innovative pricing solutions driven by Salesforce CPQ.

Salesforce CPQ : Art of Possibilities on Pricing and Discounting