Video 1: Intro to Managing Your Subscription Products with Salesforce CPQ:
Salesforce CPQ is a great tool for managing complex sales quoting processes and creating professional output documents. In this series, we plan to go beyond the standard use-cases and introduce the powerful subscription management capabilities included with Salesforce CPQ.
CPQ stands for Configure, Price, and Quote. It delivers agility in configuring products, pricing, and instant quote generation. It lets your sales reps bundle and carry out complex product configurations for physical products and streamline the sales process. Salesforce CPQ is also well suited for subscription-based products, and provides fluidity in configuring and pricing by allowing your reps to upgrade, downgrade, amend, cancel or provide loyalty discounts at any point of the customer journey.
Types of pricing and business engagement models that can be configured with Salesforce CPQ
Salesforce CPQ is designed to handle the Quote-to-Cash process and accelerate billing for faster sales and better customer experience. It consists of features like product bundling, quote calculator, product recommendation, billing, workflow automation, and several more that assist your sales reps and compliment the pricing models.
SaaS – The Software-as-a-Service licensing model provides a cloud-based software platform using external servers, allowing the users to use the platform via the internet. The pricing for such a model can be based on the number of users, the number of hours spent using the product or simply a flat subscription price. For example, Salesforce.
Subscriptions – The subscription-based services are relatively common among the business. Basically, a subscription service has a recurring billing element in its pricing structure. These recurring billings can be as frequent as monthly, bi-annual or quarterly. Some of the prime examples of it are streaming services like Netflix and Salesforce Plus.
Recurring Revenue – A recurring revenue model is a stable and predictable pricing model that often comes with a long-term contract between the business and the customer. The customers can choose to extend or repeat these contracts, and such flexibility provides more room for negotiation between businesses and customers. Mobile phones are a good example of this model.
There’s a lot to stay on top of to make sure you get the pricing right for subscription-based products and that is where Salesforce CPQ stands out. Beyond just handling subscription products Salesforce CPQ was designed to handle the core needs of the quote to cash process.
The use cases Salesforce CPQ can accommodate include Product catalog and bundling, Guided Selling, Quote calculator, Approvals, Document generation, e-signature, billing and workflow automation, orders and contracts creation.
Well, we’ve talked a bit about CPQ and different types of subscriptions. Now it’s time to take a quick look at the common terms used in Subscriptions and Salesforce CPQ.
Amendments are adding or updating products on an active contract.
Bundling is a group of products sold together.
Co-termination is the alignment of the contract and the dates when a contract is amended.
Evergreen subscriptions are subscriptions with no defined in date that does not need to be renewed.
MDQ is Multi-Dimensional Quoting where a product is delivered over specific timeframes for a subscription service term like monthly, quarterly, or annual.
Percent of Total Product:
Percent of Total Product is a subscription product that is priced as a percent of the overall quote.
Proration applies to amended contracts that need to be priced based on a specified amount of time, like a partial month’s service.
Renewals, a renewed subscription term is based on the details of the current subscription term.
A subscription term is similar to a segment that is a specific time frame for your product.
Usage-based pricing is a pricing model billed to the customer after they have consumed the product or service and picked a data plan or cell phone minutes.
And that’s a wrap!
Managing subscription products with Salesforce CPQ can sound overwhelming; this introduction into the very basics of Subscription products ought to have given you a clear picture of what you’re looking at. Salesforce CPQ with all the benefits it offers, along with speeding up sales processes, can enhance your ability to streamline overall revenue growth.
Now that we’ve discussed CPQ, subscription products, and key metrics, our following blog will talk about Setting up Subscription Products and the way forward.
More about the subscription product setup in our next video!