Setup and Manage Products in Salesforce CPQ

In this blog, we delve into the intricacies of managing Products and Price Books within CPQ (Configure, Price, Quote) systems, a cornerstone for businesses aiming to streamline their sales processes. By the end of this read, you will gain insights into:

• The fundamental roles of Products and Price Books in CPQ systems, emphasizing their importance in sales dynamics.
• Key fields for Products and Price Books, guiding you on what information is crucial for effective management.
• Best practices for creating and cloning products, ensuring optimal system performance and user access considerations.
• Strategies for setting product prices in Lightning Experience, including handling standard and custom price books.
• An overview of Product Schedules, focusing on their setup and application for products with payment or delivery over time.

Let’s get started!

Product and Price Books in CPQ

Products represent the items and services that are sold to the customers. A Price Book is a list of products/services and their prices. A product can exist in multiple price books with different prices. The product-related list on the opportunity shows the associated products for that record. A price book for the record can be selected to add or edit products on an opportunity.

Product Key Fields

• Active: This field indicates whether the product is active and ready to be used in a price book, opportunity, quote, etc.
• Product Currency: If multiple currencies are enabled, specify the currency you want to use on the product record.
• Product Family: Specify the category for the product.
• Product Name: Enter a name for the product.
• Product Code: The product number or internal code used to identify the product.

Price Book Key Fields

• Active: Specify if the price book is active and ready to be used on an opportunity or quote.
• Price Book Name: Enter a name for the price book.
• Description: Enter a text description to distinguish one price book from another.
• Is Standard Price Book: A read-only checkbox that specifies whether a price book is standard price book.

Manage Products

Product Creation Guidelines

• Read and Create permissions are required on products to view and create records.
• Products can be created by cloning an existing product.
• It is recommended to keep the number of products below 2,000,000 to ensure fast system performance with price books.
• A product’s standard active price is required before it can be added to a price book.
• The payment and delivery cycle can be defined via a product schedule.

Cloning Products Considerations

• When cloning a product, price book entries in price books that users don’t have sharing access to are not created.
• If a user doesn’t have write access to a field, the field’s value is not carried over to the cloned record.

Setting Product Prices in Lightning

Standard Prices in Standard Price Book

• Select the product and in the Price Book related list, click “Add Standard Price” or edit an already existing standard price by clicking “Edit”.
• Add the new standard price in the “List Price” field.
• Select “Active” to make this price available to products on opportunities, quotes, or custom price books and click “Save”.

List Prices in Custom Price Book

• Select the product and in the Price Book related list, click “Add to Price Book”.
• Choose the “Price book” and “Currency” and click “Next”.
• Add the List price or choose “Use Standard price” to make the price in the selected price book match the standard price.
• Select “Active” and save changes.

Setting Product Prices Considerations

• Standard Price: The default price associated with a product automatically included in the standard price book.
• List Price: The custom price associated with a product in a custom price book.
• Sales Price: The actual price specified by the sales rep for the product they add to the opportunities and quotes.
• A standard active price is required on a product before a new product can be added to an opportunity, quote, or custom price book.
• Create custom price books before assigning list prices for products.

Product Schedule

A product schedule determines the payment and delivery cycles for a product that is paid or delivered over time. Customizable schedules can be enabled for flexibility in managing and reporting on product schedules.

Key Fields

• Schedule Type: Specify whether the revenue or quantity schedule is divided into multiple installments or repeated for each installment.
• Installment Period: Specify the installment intervals – Daily, Weekly, Monthly, etc.
• Number of Installments: Specify the number of installments in the schedule.

Types of Schedules

• Quantity Schedule: This determines when a product is delivered and is suitable if the customers pay once but receive the products in increments. For Example, an annual subscription to a monthly magazine.
• Revenue Schedule: This determines when a product is paid for and is suitable when customers make regular payments but receive the product once. For Example, a product license purchased in monthly installments is delivered once.
• Default Schedule: The default schedule is associated with a specific product in a specific price book and is suitable if all the customers make product payments on the same timetable or the products are delivered on a regular schedule.

Enable Product Schedules

• Find and select “Product Schedules Settings” in Setup.
• Select the Schedule Types – Quantity, Revenue, or Both.
• Select “Enable for all products” to enable a scheduling type for every product in your price books. 
• Select “Enable customization of product schedules” to tailor schedule layouts using custom fields and buttons and apply validation rules and Apex triggers.
• Click “Save”.

Product Schedules Considerations

• Opportunities with the product on which the product schedule is added or changed are not updated.
• The “Discount” field cannot be edited if a quote line has a discount and the corresponding product record has a default schedule.
• If default schedules are established on a product record, the schedules are created automatically when the product is added to the opportunity.
• Default field values and formulas aren’t supported by default product schedules when customizable product schedules are enabled.

Use Case

A medical supply company that sells medical glove boxes for $20 per box has a yearly contract with hospitals to deliver the glove boxes monthly. What should be configured to meet this scheduling requirement?

Solution: Create a “Default Quantity Schedule”.

Reason: Enable Quantity Schedule and set a default quantity schedule on the product, Schedule Type = Repeat, Installment Period = Monthly, and Number of Installment = 12.

Conclusion 

In conclusion, mastering the management of Products and Price Books in CPQ is pivotal for streamlining sales operations and enhancing overall business efficiency. By understanding the nuances of product creation, pricing strategies, and schedule management, businesses can leverage CPQ systems to their full potential, driving sales and improving customer satisfaction.

Ready to take your Salesforce skills to the next level? Sign up with saasguru for a free trial and unlock access to over 18 Salesforce Certification Courses, 50+ Mock Exams, and 50+ Salesforce Labs for hands-on learning. Embark on your journey to Salesforce mastery today and elevate your career with saasguru.