Discount Methods: Discount Schedules Overview

by Community Manager on ‎08-04-2015 05:47 PM - edited on ‎04-05-2017 01:01 PM by Community Manager

OVERVIEW

Discount schedules allow you to specify volume discounts. These volume discounts are based on a percentage of the product's price to be discounted using the quantity purchased or term. You can set the quantity or term ranges in tiers of different discount percentages.

 

DETAILS

   

KEY CONCEPTS & DEFINITIONS

Discount Schedule Fields

Field

Description

Schedule Name Enter a meaningful name for the discount schedule that differentiates it from your other discount schedules.
Type

Choose the type of discount that determines how the amount or percentages will be subtracted from price: 

  • Range: Discounted at the rate of whatever tier applies to the quote quantity
  • Slab: Discounted at the blended rate of whatever tier applies to the quoted quantity and all preceding tiers. Slab discounts cannot be applied to Cross Products.
Discount Unit

Choose either: 

  1. Percent: Will allow you to enter the discount as a percentage.
  2. Amount: Will allow you to enter a static value for the discount. This means that sales users can arrive at an exact price without having to calculate discount percentages with a large amount of decimals.
Allow Override

If checked, sales reps can copy the Discount Schedule and adjust the tiers in the Quote Line Editor.

Aggregation Scope

For subscription products, choose from: 

  1. Quote: Use to combine line items in the quote.
  2. Group: Use to combine line items in the group.
  3. None: Use if you want each line item considered independent, even if they are for the same products. This will require that each Quote Line be considered independent of all others, but Cross Orders and/or Cross Products require that each Quote Line be considered in tandem with other lines. Aggregation Scope and Cross Order/Cross Product should not be used together. It is recommended that a Validation Rule be used to enforce this.
Cross Products Select this to combine quantities of different products on the quote, if they have the same discount schedule. Select the checkbox to aggregate quantities of all products using a schedule for the purpose of volume discount calculation
Cross Orders

Select this to combine quantities of this product on this quote, as well as those of prior purchases.

Select the checkbox to aggregate quantities of all products using a schedule for the purpose of volume discount calculation

 

A quote must be primary for the functionality to work; the product is only being compared against contract subscriptions and active assets. Thus, any expired contracts are expired assets will not factor into the discount schedule calculation.

Product Enter or lookup a value to assign a product to which the discount schedule applies.The Product field can only be used in conjunction with the Price Book field.
Price Book Enter or lookup a value to assign a price book to which the discount schedule applies. The Price Book field can only be used in conjunction with the Product field.
Description Enter a brief description so other users know the purpose for this discount schedule.
Override Behavior

Determines the editability of Discount Tiers:

    • None: Discount Tiers are not editable
    • All: All Discount Tiers are editable
    • Current Tier Only: Only the current Discount Tier that the product falls within is editable

Note: Any customers updating from the Winter Minor Release will need to update their discount schedule records to contain this field instead of Allow Override.

Constraint Field Choose the quote level field you want to constrain. Use with cross-order schedules if you want to limit which subscriptions and assets are used to calculate the volume discount. The Constraint Field cannot target Formula fields and will produce an error if it does so.  

Note: The quote-level field you choose must have a matching field on the subscription or the asset, meaning they have to have identical API names.  This cannot be a formula field.  

Caution: This functionality does not work with amendments because amendments do not look to other orders.  

Excluded Pricebook Ids  Enter a comma-separated list of price book IDs that should not be applied to this discount schedule.    
Include Bundled Quantities Select if the quantities of bundles product options should be included in the aggregation scope.  

 

Discount Tier Fields

Field

Description

Name Enter a meaningful name for this tier.
Lower Bound Enter the smallest quantity to be included in this tier.
Upper Bound

Enter the largest quantity to be included in this tier.

 

Note: Upper Bound is not inclusive. Please ensure that your upper bound is 1 digit higher than what you actually want to include. For example, if you want your tier to include numbers 5-10, set your Upper Bound to 11. 

Discount Enter the percentage or amount to be applied as a discount to any products that have the quantity specified in this tier.

 

Additional Key Fields

  • Term Discount Level: This Product field allows users to specify the Subscription Term level that should be used in calculating term discount. This is useful when you want to show a breakdown of payments in separate groups, for different terms, yet you want to discount reflected for the entire duration of the subscription. Leave Term Discount Level blank if you want discount schedules applied based on the term of each line item.
    • Line
    • Group
    • Quote

SCENARIOS

  •  Provide discounts by volume

SETUP

In order for Discount Schedules to be applied correctly, the following objects must already be created.

  • Primary Quote with a Subscription Start Date and Term
  • Contracted Opportunity
  • Contract
  • Asset

Admins may need to modify the following page layouts:

  • Add the Term Discount Level field to the Product page layout.

PROCEDURES

Create and Apply a Discount Schedule to a Product

  1. Navigate to the Discount Schedules page and click New.
  2. Navigate to the Product that you want to associate with your Discount Schedule.
  3. Click Edit. Navigate to your Product's Discount Schedule field and set the value to the Discount Schedule you just created. If you want to apply this Discount Schedule to a Subscription Term, modify the Term Discount Schedule field value instead.
  4. Click Save. Note: Price changes from a Discount Schedule are not retroactively applied to existing Quotes.

Apply Discount Schedules to Subscription Products based on Quote, Group or Line Item

  1. In addition to the steps above, navigate to your Subscription Product and set the value of the Term Discount Level field.

Create Discount Schedule Tiers

  1. Navigate to an existing Discount Schedule and select the Edit Tiers button.
  2. Fill in the Tier Name, Lower Bound, Upper Bound and Discount Schedule values.
  3. Click the + at the right column of any row to insert a new row.
  4. Click the - at the right column of any row to remove that row.tiers.png

Note: Any further Opportunities will use past volumes when applying Discounts.

USE CASE

  1. You may sell a router for $25, but offer a case discount of 20% when a customer purchases more than 10 routers. This is a simple two-tier discount schedule: a 10% discount for 1-10 routers, and another that specifies a discount of 20% when the quantity is 11 or higher. Remember that the Upper Bound is not inclusive - setting it at 11 means Discount Tier 1 covers 1-10 routers, will Discount Tier 2 covers 11 or more routers.discountsched.png
  2. Setting the Type to Slab would allow you to blend the Discount % of your product's quoted quantity as well as all quantities that fell in preceding discount categories. In the Discount Schedule below, customers ordering 31 or more routers would have their order discounted as follows:
    • First 10 routers: 5% discount each
    • The 11th through 20th routers: 10% discount each
    • The 21st through 30th routers: 15% discount each
    • The 31st router: 20% discount
    • slab.png
  3. You can also apply discount schedules to a Subscription Term. This is helpful if you give a 20% discount on a 2-year subscription purchase, or a 30% discount on a 3-year subscription. A sample Discount Tier setup for such a Subscription Term's Discount Schedule is provided below:subs.png

 

 Notes:

  1. If you want to apply discount schedules to specific price books, add the Excluded Pricebook ID's field to your discount schedules page layout. Go to the price book that should be exempt from this discount schedule, copy the 15 character code in the URL, and enter this code in the Excluded Pricebook ID field. You can enter multiple ID's by separating each with a comma.
  2. You can access any field on the Discount Tier in order to perform calculations in formula fields on the Quote Line object. For example, you are able to access the discount value (%) in a formula field. 

RELATED LINKS

Salesforce CPQ+ Edition allows you to set up a variety of additional discount methods:

  • Compound Discounts are discount methods, expressed as a percentage, that calculates the discount on a product based on the quantity
  • Partner Discounts can be given to quote and product line items for a quote.
  • Non-Discountable products are selected products that are exempt from additional discounts.

Tip: Select Non-Discountable on the product to exclude products from your discount schedules.

Tip: If you are upgrading from a previous version, you may need to add the Product and Price Book fields to the Discount Schedule page layout.