Today we will discuss the challenges a sales rep faces when selling subscription-based products. There’s one thing in the world that is constant, and that is CHANGE. Yes, it can be anything – your business, market, products, customers, technology etc. When technology advances, the business needs to change too. Imagine you are a sales rep. These days we are not selling computers or any hardware devices, we are selling subscription-based software like an Antivirus License. As we know, subscriptions are something that gives recurring revenue to organizations. But updating subscriptions is not always easy. This is where CPQ Contract Amendments in Salesforce are important.

Subscriptions complicate things when the customer comes back and asks for changes to the original purchase. This prompts many questions, such as:

• Customer is already subscribed to which product & services?
• The subscriptions will end when?
• The total price of the subscription gap between the present contract and when the existing contract close?
• Can we offer the customer an upgrade to a different level of service, and what will be the cost?
• To track subscription changes so that we can analyze future sales on full information.

A sales team can always take care of these questions, but it’s difficult to handle the adjustments when the number of amendments is high. But no worries, Salesforce CPQ can make it so much easier and more efficient. It can handle most common cases. For example, an increase or decrease in quantity, adding new products to existing subscriptions, canceling before the end date, replacing an existing product, etc.

Salesforce CPQ takes care of all the amendment work so the sales team can use their time to close more deals.

 

Changing an Existing Contract

Before we see how Salesforce CPQ handles contract amendments, let’s understand how it creates the contract record to track subscriptions.

When we create a quote, each product we add has its own quote line [1]. When the customer agrees on the quote and would like to move forward with the offer, the sales team uses Salesforce CPQ to convert the quote into an order record with products [2]. Then, CPQ will use information from the order to create a contract with related subscription records [3].

The subscription record saves a lot of information in it. But most important, it has fields like Product Lookup, Start Date, End Date, and Quantity. It also saves other information which can be useful for amendments and renewals. So, the data initiates from the quote line records and flows to the order products which turn into the subscription records later.

 

Contract Amendment Experience with Salesforce CPQ

Let’s create an example. You’re in a sale and a year ago your customer, UV Computers, bought five licenses for an HR software subscription. The original contract was for 3 years. Today you get a call from UV Computers, and now they wanted 5 more licenses as they’ve hired 5 new people.

Your job here is to send them a quote as soon as possible. It’s time for a contract amendment!

• In App Launcher, click the Salesforce CPQ tile.
• Under Accounts, choose the All Accounts list view and open UV Computers.
• Under the Related tab, from the Contracts related list, open the contract the sales ops team created a year ago. It contains subscriptions for the HR software. Now click Amend.
• Click Amend again from the preview screen.
• Now CPQ does something nice: it creates a new quote with the existing products as quote lines. You might notice that the quantity is already at 5, as CPQ knows about the existing subscription and the Net Total for the quote line is $0. CPQ will not charge the customer what he already paid!
• So now what you need to do is change the quantity to 10. And as a rule, you must enter the “end result” always. Like here 5+5=10. Now click Calculate after updating the dates.

Click Save. Bravo! You have amended the quote. Now you can email this to the customer.

 

Find More Ways to Amend Contracts

The best thing about using salesforce CPQ is that when you click ‘Amend’, the system automatically creates an opportunity to support the new quotation we just created.

By default, the person who clicks ‘Amend’ is the owner of the opportunity which needs the amendment. But some businesses don’t want the owner to change anything. For example, maybe the opportunity is owned by a salesperson, but a support user clicks the ‘Amend’ option and becomes the owner. Thankfully, we can set the Amendment Owner lookup field to the name of the actual owner. Then the opportunity will belong to the actual user no matter who clicks the ‘Amend’ option.

 

Amending Through the Opportunity

Sometimes businesses don’t let their sales team touch the actual contracts. But Salesforce CPQ lets you amend a contract from a new opportunity. It takes a few extra steps, but it’s fairly simple to do. We will take the same scenario here where our customer, UV Computers, asks for 5 more HR software licenses. Let’s create an amendment quote with the help of a new opportunity.

From the Navigation bar, go to the All Accounts list view under Accounts.

• Click UV computers & Click New Opportunity.
• Enter Opportunity Name- More HR software licenses.
• Choose Proposal/Price Quote for stage and save.
• Under the Related tab. Open More HR software licenses under the Opportunity related list.
• Click on Amend Contract. This will take you to the Existing Contracts selection page, where you can see every contract related to the UV computers account.
• Open the right Contract by clicking the radio button and then Select.
• As before, change the Quantity of HR Software licenses to 10 i.e., change the value to the “end result” quantity customer is looking for.
• Also makes changes to the quote Start Date and Calculate. Click Save.

 

Great work! Congratulations you made another amendment quote in just a few clicks. If you tried to do it by a normal process, you will probably go mad.

 

Learn about additional ways Salesforce CPQ can benefit your business with some of my related blogs below!

 

Additional Resources

• Trailhead by Salesforce: Contract Amendments with Salesforce CPQ
• Salesforce Help: Amend Your Contracts
• Block Pricing with Salesforce CPQ
• Automate Customer Lifecycle with Salesforce CPQ

Cover Photo by Gabrielle Henderson on Unsplash