Modify a product subscription with ramped pricing and quantities
Summarize
Summary of Modify a product subscription with ramped pricing and quantities
This feature in ServiceNow CPQ allows customers to configure product subscriptions with ramped pricing and quantities, enabling incremental changes in price or quantity during the contract term. This capability is useful for managing contracts where pricing or purchase volume changes over time.
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Key Features
- Enable Ramps: Activate ramped pricing by selecting the Enable Ramps checkbox on the Pricing tab of the product offering configuration page.
- Ramped Pricing Setup: When creating or modifying a quote line item for configurable products, use the Ramps option to define how prices and quantities change over time.
- Ramp Types: Choose between Yearly, Quarterly, or Custom ramp types to specify the frequency of price or quantity adjustments during the contract term.
- Ramp Segments: Segments are automatically created based on the contract term and selected ramp type, allowing granular control over each period’s pricing and quantity.
- Annual % Increase: Define a percentage increase in unit price for each segment (e.g., 10% annual increase) or enter 0 to keep pricing constant and adjust only quantities.
- Editable Quantities: Modify quantities per segment to reflect changes in purchase volume over time, independent of price changes.
- Visibility: By default, ramps are hidden in the product’s line items list; use the hierarchy toggle and adjust conditions to display ramps as needed.
Practical Application for ServiceNow Customers
ServiceNow customers can leverage ramped pricing and quantity features to accurately model subscription contracts that evolve over time, such as increasing service units or escalating prices annually or quarterly. This ensures quotes reflect realistic contract conditions, improves billing accuracy, and supports strategic sales planning.
Add pricing or quantity ramps to quote line items to set incremental changes during the life of a contract.
In the ServiceNow CPQ configurator, you can modify the configuration of a product subscription so that prices and quantities change during the term of the subscription. This is called ramped pricing because the price or quantity increases or decreases during the term of the contract.
To enable the ramped pricing feature, select the Enable Ramps check box on the Pricing tab of the product offering configuration page.
When you create a quote for a configurable product, you can set ramped pricing for offerings within the product. Select a quote line item, and then select Ramps. A Price ramps for [product offering] dialog appears that contains the following fields:
- Start date
- End date
- Term (months)
- Ramp type
- Segments
- Annual % increase
If the start date, the end date, and the term are not already specified in the quote line, exit the price ramps dialog, enter them there, and save the quote line. You can modify them later when you set up a ramp. In the price ramps dialog, for the ramp type, select Yearly to change the pricing each year, Quarterly to change the pricing each quarter, or Custom to specify another period (ramp segment) at which prices are to be adjusted. Ramp segments are created according to the term of the contract and the ramp type. For example, if the term of the contract is 36 months (three years), and you select Yearly as the ramp type, three segments are created: one for each year of the contract.
In the Annual % increase box, enter the increase to go into effect each year. If you enter 10, the unit price will increase by 10% each year.
Click Create, and the segments display with price changes according to the figure that you entered.
In each segment, the Quantity field is editable. For example, to specify a contract during which 1 unit is purchased the first year, 2 units are purchased the second year, and 4 units are purchased the third year, set the quantities accordingly in the three annual segments. To set a quantity ramp with no change to pricing during the term of the contract, enter 0 in the Annual % increase box and modify only the quantity in each ramp segment.