Price and quantity ramps
Summarize
Summary of Price and Quantity Ramps
Price and quantity ramps allow sales agents to establish incremental increases in pricing and quantities for subscription products or contracts over the duration of a customer agreement. This feature accommodates various product adoption scenarios, enabling customers to scale their purchases in line with their growing needs.
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Key Features
- Ramp Configuration: Sales agents can create ramps for configurable products by setting the Pricing method to Recurring and selecting the Enable ramps option during product offering creation.
- Ramp Segments: Agents specify the start and end dates, ramp type (yearly or quarterly), term length (up to 60 months), and annual percentage increase to generate ramp segments that dictate pricing and quantity adjustments.
- Automatic Calculations: The system automates the creation of ramp segments, reducing manual errors in pricing adjustments.
Key Outcomes
Implementing price and quantity ramps provides flexible pricing structures, allowing companies to start with lower initial costs and gradually increase as product usage grows. This approach not only optimizes revenue over time but also ensures accurate and efficient pricing adjustments that align with customer needs.
Ramp Limitations
It's important to note that ramps are not supported for sale agreements, multiple configurations, or product inventory, and modifications to ramps for order lines by order agents are also not supported.
Setting Up Ramps
- Enable Ramps: Product catalog admins must enable ramps in product offerings during creation.
- Add Price Ramps: Sales agents must define ramp settings for quote line items, allowing for updates to ramp configurations as needed.
Price and quantity ramps enable sales agents to set incremental increases in product pricing and quantity deals over the duration of a customer contract or subscription period.
How ramps work
Different product adoption scenarios by customers can affect product pricing and quantities for subscription products or products under contract. For example, customers might want to scale their purchases over time, based on product use that increases annually as the company grows. Changes to products in subscriptions or contracts, such as changes to product characteristics or quantity, can cause pricing or quantity increases that must be applied.
- Start date and End date. The default dates come from the quote line. The agent can enter a different start or end date, which the system uses to update the settings accordingly. These dates are used with the Term to calculate the ramp segments. The start date is used as the starting date for the first ramp segment.
- Ramp type: Yearly or quarterly.
- Term: Length of time, in months, for the ramps. The maximum term is 60 months. The Term is used with the Ramp type (Start date and End date) to determine the segments created.
- Annual % increase: The percentage increase to be applied annually. The annual percentage increase is applied after the completion of the first year and is cascaded to all quote lines.
- Segment: The number of time periods in the ramp to be created. Segments are determined as follows:
- Yearly ramp type: If the Term is a multiple of 12, the number of segments created is equal to the term/12. Each segment term is 12 months. If the Term isn’t a multiple of 12, the number of segments is term/12 +1, where the first segment is less than 12 months, but the other segments are 12 months each. Also, the first segment can be partial months.
- Quarterly ramp type: If the Term is a multiple of 3, the number of segments isn’t equal to term/3. Each individual segment term is 3 months. If the term isn’t a multiple of 3, the number of segments is equal to (Term/3+1) with the first segment less than 3 months while the rest of the segments are 3 months each. The first segment can be partial months, such as 8 months, 5 days based on the Start date and End date.
Ramp generation and validation
- If the parent line has a ramp, ramps are created automatically for all the child lines.
- If the parent line isn’t ramped, all the child offers can be ramped independently.
Ramp benefits
- Flexible pricing structures for customers, to align with their product adoption phases. For example, you can start with lower product pricing in the first ramp segment, to reduce initial costs and overcome buyer hesitancy.
- Scaled revenue optimized over time as product usage grows.
- Automatic calculations of ramp segments and pricing, minimizing errors in manual calculations made by sales agents.
Ramp limitations
- Ramps aren't supported for these features:
- Quotes of types sale agreement
- Multiple configurations
- Product inventory (not applicable)
- Ramps for order lines are displayed, but order changes to ramps by order agents aren't supported.
- Sold products that have ramps are supported, but Modify, Add, Change, Delete (MACD) operations for sold product aren't supported.
Setting up ramps
| Task | Description | Role |
|---|---|---|
| Enable ramps in product offerings | When creating a configurable product offering:
|
Product catalog admin |
| Add price ramps on a quote line item | Define the ramp settings for the quote line and generate the ramps. After creating the ramps, agents can update the settings, such as the Ramp type or Annual % increase to recalculate the ramp segments automatically. | Sales agent |