When we talk about prices, putting together quotations for your customers involves more than just selecting the correct products; it’s also the prices for the products you are offering and that should be right too. For example, you might have negotiated some price deal with 1-2 customers and the sales team now must remember those accounts. Luckily, with Pricing Tools such as Block Pricing, Salesforce CPQ provides administrators with a variety of options to make sure that products are priced automatically whenever added to a quotation. The days are gone where we will be using binders full of pricing tables, or the Excel sheet your co-worker shared with you.
Now in today’s time let Salesforce CPQ do all the hard work, and in the remaining time your sales reps can be closing more deals that will benefit your business.
Beyond Price Books
At this moment, you might be using price books to uphold lists of prices for your products. A Price Book is a collection of price book entries, and a price book entry is a price customized by the company for their product. Let’s say you have two different customers Government & Academic. Now you can easily maintain the price books and sales reps can refer to them.
Now think if you have 10-20 different customers and each requires different pricing. As a sales rep, you could create and maintain a price book for each one, but this means more data and more work for you. Worst case scenario if a price book has a few changes for a specific customer. Then handling pricing exceptions will be a challenge.
Here’s Salesforce CPQ comes to the save. When you make a quotation using Salesforce CPQ, it first uses the selected price book, then it layers on pricing exclusions when needed. This feature allows you to use less price books and still look for specific situations. Besides, you can implement pricing modifications that aren’t maintained by price books.
Even though Salesforce CPQ gives us tools for adjusting prices outside the price book price, it still needs a preliminary point—something to alter. For this reason, price books are still needed when you are using Salesforce CPQ. As a matter of fact, if your Quotation is using a price book that has a missing price book entry for a product, then that product will not be available on the product selection page, and thus cannot be used in the quote.
Pricing Tools in CPQ
Let’s take a close look at what Salesforce CPQ can do to adjust or replace the prices it gets from the mighty Price books.
|Block Pricing||Use a fixed price for a range of quantity instead of multiplying by number of product unit.|
|Percent of Total (PoT) Pricing||Analyze the sum of the other product prices and then takes a percent of that sum amount.|
|Option Pricing Override||Changes the price when the product is brought in a bundle.|
|Contracted Pricing||Customize the product prices for specific accounts.|
|Cost Plus Markup Pricing||It allows sales reps to add value addition to a cost of a product.|
In this blog, we will only be talking about the Block Pricing tool & technique.
Block Pricing Example
Let’s set up block pricing for one of Wendy’s Computing’s products: Power Cord Recycling. This is a service where used/non-operational power cords are picked up from an office location. When we pick up, most of the cost is in time and travel, so we charge the customer so that we cover our conveyance costs even if the recycled items are less. However, if the customer recycles a lot of power cords or any other electronic item, we usually give them a good deal since we’ve already traveled to them.
Here’s how Wendy’s wants to price their services.
- Small pick-up – Number of Power cords- 1-50 – Price: $30
- Large pick-up – Number of Power cords- 50-100 – Price: $45
Before going forward, Let’s understand the vocabulary of Block-pricing:
- Name: This is a way the admins identify the given tier.
- Lower Bound: The lowest quantity of this quantity range.
- Upper Bound: The highest quantity of this quantity range.
- Price: The Price of the quantity range. And the value that replaces the price book price.
Set Up Block Pricing in CPQ for the Example
Block pricing in CPQ is related to the Product object, so we first navigate to the Power cord recycling product.
- Open App Launcher and then click the Salesforce CPQ
- Now Open Products in the navigation bar, then choose the All-Products list view.
- Click Power cord Recycling and then open the Related tab.
- Click Edit All in the Block Prices related list and In the Price Name field, enter Small Pick-up.
- Enter the Lower Bound field as 1 & Upper Bound field as 101.
Even though Small Pickup supports 50 Power cords, you enter the first quantity not supported.
- Now enter the Price ($) field, and enter 30.
- Click the + button to make another tier.
- Similarly, enter details for large pick-up.
- Click Save. We’re almost done. To make Salesforce CPQ to use our new Block Prices, Click Edit and then change the Pricing Method to Block & Save.
Congratulations! You have created your own little price book with Salesforce CPQ.
You can pretend to be a sales rep and add power cord recycling to a quote to see what happens. I will encourage you to do this by yourself and experience the best of block pricing by yourself.
To learn more about CPQ, check out some of my related blogs below!
- Salesforce Help: Block Pricing
- Trailhead by Salesforce: Implement Block Pricing
- Connect with Customers and Close Deals Faster with Salesforce CPQ
- Automate Customer Lifecycle with Salesforce CPQ
Cover Photo by La-Rel Easter on Unsplash