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Setting up subscription products and making configuration decisions in Salesforce CPQ

by | Nov 2, 2021 | Blog

Video 2: Managing Subscription Products with Salesforce CPQ

Mission Two: Subscription Product Setup

We are back again with our Managing Your Subscription Products with Salesforce CPQ series. In our previous blog, we introduced different subscription models on a high level and discussed some of the common terms associated with Salesforce CPQ and subscription products. So, if you have missed our previous CPQ blog by any chance, here’s the link to it.

This blog will cover the basics of setting up subscription products in Salesforce CPQ and some of the essential configuration decisions that need to be considered as you enable those products.

In order to get started, we’ve created a fictional movie streaming service called Spaceflix. Spaceflix is obviously in high demand due to all of the outer space travel happening these days. We thought this would be a lighthearted way to demonstrate subscription product setup and familiarize you with the features and pricing options available in Salesforce CPQ. Here are the topics we will go through in the blog to round out the high-level basics of managing subscription products within Salesforce CPQ:

      • Setup Subscription Products​
      • Fixed Price Products​
      • Price Books & Products​ from a general Salesforce perspective
      • Subscription Terms​
      • Subscription Type​s
      • Percent of Total Products​
      • Block Pricing

And, in our next blog, we will cover MBQ products, multidimensional quoting, and other advanced features related to subscription products.

Let’s get started with setting up our first product:

Subscription

Here we have the Spaceflix basic plan. The options come standard with your subscription to Salesforce CPQ. So, when you click on product record and set up a new product, you can find some fields available (in the image below). For the initial setup of Spaceflix offering, we are only concerned about the field Subscription Pricing. We will set Subscription Pricing as a Fixed Price, so the prices will be pulled from our pricebook.

Within the CPQ settings, you need to determine whether you are going to select months or days for your subscription term. We are setting the Subscription Term to be 12 months in this case. On selecting the subscription type to be Renewable, the services can be renewed every 12 months.

For your reference, here is the link to Subscription and Renewal Package Settings:

Product Setup

Once the product is set up, given a price from the price book, and is identified as a subscription product, the product will appear in our product catalog. For the product to be available, it must be active and have a price associated with the product in the price book.

And we’re using the standard price book here as an example. Here, in the image below, you can see in the Product Selection, we’ve selected the Spaceflix basic plan and added a logo to help from the configuration and usability standpoint.

Quote Line Editor

Now that we’ve selected our product, we move to the quote line editor within the CPQ, where you can find some important information about the Spaceflix Basic Plan, like the start date (10/19/2021), end date (10/19/2022), and subscription term. Depending on how the products are configured, you can also change these terms. And, we’ll discuss more of this in our next blog. But for now, we’ve got our subscription added to the quote and are ready to move forward.

Subscriptions

So now, backing up a little bit to the general settings of subscription products, we can see the option Subscription Type, and we’ve selected the renewable option. It is important to note that the renewable subscriptions will transfer back to the renewable quotes. However, the case is not the same for other types of subscriptions. There are different types of decisions you need to consider when setting up subscription services, including how you forecast for renewal in the future, how the subscription products are handled once the subscription term has expired.

Now we will look at some other subscription types:

One-Time Products: The One-Time product subscriptions will not carry over on a renewal opportunity or quote.

Evergreen Products: These subscription products never expire and remain active until canceled. There are no renewal terms associated with these products.

Renewable/Evergreen: These subscriptions can be renewable or evergreen and can include a bundle of products or has tier-level subscriptions like Gold, Silver, and Bronze. Silver can mean a subscription of 1 year, and Gold can mean a lifetime subscription of services.

This is the type of flexibility that Salesforce CPQ gives you for managing product subscriptions.

Configuration Options:

Now that we have got that in place let’s add a little more to our product.  We are going to add a few features for Outer Space Resolution and Viewing Accessories.

A few options have been added within the features, so we have three different resolution options, and we’re going to require the user to select one. And then, we’ve added some 3D Glasses to set those up as a percent of the total product.

CPQ Product Configuration:

Here as part of the Spaceflix basic plan, we’ve added three resolution options. Each one of these will increase the price incrementally, and the setup is such that only one can be selected. In this example below, we’ve selected 1080p resolution, which would look pretty good in outer space, and it’s only six bucks more per month.

Now, going back to our Quote Line Editor, we have our 1080p resolution added to our Spaceflix basic plan, and we’re ready to go!

 

Pricing:

So jumping over to 3D Glasses, we’re going to set those up as a percent of the total product, which means the price of that product is based on a percent of the total quote that you’re working on. You have a few options that are the percent of the total base product. It can be the net of the entire quote, or it can be related to specific products, and then you can change the percentage to how it is calculated.

One important thing to note here is that out-of-the-box subscription products themselves are not included in the percent of total calculations. So in our Spaceflix basics plan, if we just left it alone, it wouldn’t be included in a calculation for percent of total products. But here, we wanted to include our Spaceflix basic plan in the percent of total calculation so that the price gets calculated correctly when we add our 3D Glasses.

Now we’ve added ten 3D glasses here (there’s no price yet, it’s our configuration screen).

But, we can make a few modifications, maybe just drop it down to five, which is done and shown on our Quote Line Editor below.

So, you can see the net unit price is $0.52 for each pair of glasses, and to add those five glasses, it is $2.60. Well, that’s 2% of our $26 Quote. This should give you a basic understanding of how the percent of the total product can be added to your overall quote and related to subscription products within Salesforce CPQ.

Block Pricing:

The last thing we’re going to discuss is Block Pricing. Block Pricing gives you a way to sell bundles of licenses. So, in this case, we’ve got three different levels for space cruisers, space vans, and space buses, as they obviously have more seats, and we’re going to need more licenses for our streaming servers.

For the space cruiser block, between one and ten licenses, it’s going to cost you up to $150. This allows some flexibility, and in B2B situations, you’ll hear about different seats, so you’re buying a block of seats that you can then assign to employees within your business.

Here, each space cruiser has up to 10 licenses available for individuals traveling in space and wanting to stream their movie service. This is just a basic example of how Block Pricing can be applied to subscription products (Microsoft office and salesforce might have made you familiar with this, from how the packages are bundled and how the seats can be assigned after you’ve purchased an entire block of licenses). 

Conclusion

So, that’s a wrap! We guess by now you would have an idea about the basics of setting up subscription products and the essential configuration decisions to be considered while enabling the subscription products. If you have any doubts about setting up your subscription products, you can connect with our CPQ experts, who could help you.

In our next blog, we’ll discuss Multidimensional Quoting & Proration in Salesforce CPQ. So, stay tuned for another incredibly educating read!

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