Contracted Pricing in Salesforce CPQ

In this comprehensive guide to Contracted Pricing in CPQ (Configure, Price, Quote), we delve into the nuances of tailoring pricing strategies to meet the specific needs of individual accounts. By understanding and implementing the concepts outlined, readers will gain insights into:

• The Fundamentals of Contracted Pricing: Learn how CPQ allows for account-specific pricing adjustments, ensuring that negotiated rates are automatically applied during the quotation process.
• Key Fields and Their Importance: An overview of critical fields such as Contract, Discount, Product, and Effective Dates, and how they influence the setup of contracted prices.
• Automated Creation of Contracted Prices: Discover how to streamline the process of establishing contracted prices through automation, enhancing efficiency and accuracy.
• Implementing Account-Based Contracted Pricing: Guidance on setting up customized pricing for single or multiple products for specific accounts, ensuring tailored pricing strategies that reflect negotiated agreements.

Let’s get started!

Contracted Pricing

CPQ allows account-specific prices or discounts to be set up for a product or filtered list of products. If set up on an account, the contracted price overrides the list price during the quotation process. Contracted prices can be defined manually or through automation when the order is contracted.

For example, a price for a product has been negotiated by the sales rep, and the same price should be used on new quotes, renewal quotes, and amendment quotes after making a contract.

Key Fields

• Contract: This field specifies the sales contract that governs the contracted price.
• Discount: Add the discount percentage that the sales rep negotiated with the customer to this field. A discount or a price should be set on the contracted price record, not both.
• Product: Select a product from any price book to which you want to apply this discount.
• Price: Enter the price negotiated with the customer in this field.
• Effective Date: The date on which the contracted price becomes effective.
• Expiration Date: The date on which this contracted price expires.
• Filter Field: A field on the quote line that is evaluated to determine whether this contracted price applies. Select a field to use in a filter to apply this price to a set of products.
• Filter Value: The value the filter field is tested against to determine if this contracted price should apply.
• Operator: Select the operator to use when matching the contents of the Filter field with the Filter value.

Key Considerations

• Contracted Prices in CPQ are only applied after a product is added to a quote. Recalculating the quote and editing a contracted price does not pull in the edited values.
• Salesforce CPQ checks whether a quote line has a contracted price during the quote line calculation. If a contracted price is found, then the price is passed on to the quote line’s special price field.
• You can have only one contracted price record per currency per product. Assigning another contracted price to a product and then contracting that product causes the contracting process to fail.

Automatically Create Contracted Prices

• A quote can be configured so that when the quote’s opportunity or order is contracted, contracted prices for all the quote’s products are created.

• Select a value for the “Generate Contracted Price” field from a quote. These are the values:

1. Price: The net unit total for the product’s quote equals the price field on the contracted price record. This is the initial price for all the future quote lines for this product on this account.
2. Discount Schedule: The quote line’s discount schedule is inherited by the contracted price record. The price on all the future quote lines for this product on this account is based on the discount schedule.
3. Do Not Generate: A contracted price for this record is not created. Select no value or none functions in the same way.

• Save the “Quote” record.

Account-Based Contracted Pricing

Account-specific contracted pricing can be set on a single product or multiple products.

Single Product

• Select the “Account” record
• Click on the “Related” tab
• Click “New” on the “Contracted Price” related list
• Select the “Product”
• Enter the “Price” or “Discount (%)”
• Click “Save”

Multiple Product

• Select the “Account” record
• Click on the “Related” tab
• Click “New” on the “Contracted Price” related list
• Enter the “Discount (%)”.
• Add the “Filter Field”
• Add the “Filter Value”
• Determine the “Operator”
• Click “Save”

Use Case 1

A sales representative at Sun Solar wants to preserve the pricing of the products for future amendments, renewals, or new quotes. What should be configured in Salesforce CPQ so that future quotes use quote line prices from their original quote within the contract’s account?

Solution: Select “Generate Contracted Pricing”.

Reason: The CPQ Specialist can select a value “Price” or “Discount Schedule” in the “Generate Contracted Pricing” field on the quote record so that when the quote’s opportunity or order is contracted, contracted prices for all the quote’s products are created.

Use Case 2

Sun Solar has been doing business with a few customers for some time, and over the years, they have negotiated a special price for their “Critter Guard” product. The product is priced at $120 for all the customers, but a few customers who have been brand loyal pay 20% less than the price book price. The CPQ Specialist has been asked for a way to meet this account-specific pricing requirement in CPQ. What should be configured?

Solution: Account-Based Contracted Pricing.

Reason: The CPQ Specialist can configure Account-Based Contracted Pricing for the few customers who will pay 20% less than the price book price for the “Critter Guard” product. Contracted Pricing records can be created on the specific accounts that will use this price. The discount percent can be set to 20%. The contracted price is visible whenever the product is added to the quote as a quote line.

Conclusion

In wrapping up our journey through the intricacies of Contracted Pricing in CPQ, we’ve unlocked the potential to revolutionize how businesses approach pricing strategies, ensuring they are as dynamic and customer-centric as possible. Mastering these practices is not just about enhancing operational efficiency; it’s about fostering stronger, more personalized customer relationships through tailored pricing solutions.

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