Modify a product subscription with ramped pricing and quantities
Summarize
Summary of Modify a product subscription with ramped pricing and quantities
This feature in the ServiceNow CPQ configurator allows you to configure product subscriptions with ramped pricing and quantities, enabling incremental changes during the contract term. Ramped pricing means prices or quantities can increase or decrease over time, providing flexibility to model real-world subscription adjustments.
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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.
- Ramped Pricing Setup: When creating a quote for a configurable product, you can set ramped pricing on quote line items by selecting Ramps. This opens a dialog to define ramp parameters.
- Ramp Parameters: Define start date, end date, term (months), ramp type (Yearly, Quarterly, or Custom), ramp segments, and annual percentage increase.
- Ramp Types and Segments: Ramp segments are automatically created based on the ramp type and contract term, e.g., yearly segments for a 36-month term with yearly ramp type results in three segments.
- Annual % Increase: Specify the percentage increase in unit price per segment. For example, entering 10 applies a 10% price increase each year.
- Quantity Adjustments: Quantities can be independently set for each ramp segment. This supports scenarios such as increasing quantities yearly without changing price.
- Quantity-Only Ramps: To ramp quantities without changing price, set the annual % increase to 0 and adjust quantities per segment.
- Display Options: Ramps are hidden by default in the product line items view. Use the hierarchy toggle and modify view conditions to display ramp details.
Practical Benefits for ServiceNow Customers
- Model complex subscription pricing that evolves over time, matching real contract terms and business needs.
- Accurately forecast revenue and quantities for multi-period contracts with incremental adjustments.
- Maintain flexible and precise control over pricing and quantities directly within the CPQ quoting process.
- Enhance quoting accuracy and customer transparency by reflecting contract changes in the quote line items.
Add pricing or quantity ramps to quote line items to set incremental changes during the life of a contract.
In the 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.