Managing Pricing
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Pricing goes hand-in-hand with CRM.COM’s Product Catalogue. Set up selling prices for physical goods and services, and define the Business’s pricing strategy. |
To view or manage a product’s pricing, navigate to Commerce > Products > select the product > Pricing using the main menu on the left-hand side of the screen, select the product then select the Pricing tab. If the product has a defined price it will be displayed here.
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The pricing model can be one of the following:
Flat - A product is charged at a fixed price per unit
Example:
A hardware shop sells cables at the price of €20 each.
- The total cost of cables is X times €20, where X is the quantity of cables purchased.
1) A customer purchases 2 cables, the final price is 2 * €20
Tiered - In tiered prices, there’s no single price for the product, but rather a number of prices per unit, with a range of quantities related to each price. When pricing is applied, one or more prices could be applied based on the quantity of the purchased items, which is evaluated against the quantities of each tier, starting from the lowest one.
Example:
A hardware shop sells Set Top Boxes with tiered pricing:
- For units 1 to 3, the price is €99 per unit
- For units 4 to 6, the price is €89 per unit
- For units 7 and above, the price is €59 per unit
1) If a customer buys 2 Set Top Boxes, the final price is 2 * €99 since the purchased quantity falls within the first tier only.
2) If a customer purchases 5 Set Top Boxes, then the first 3 will be charged at the price of €99 and the remaining 2 at the price of €89 each. So the final price is 3*€99 + 2*€89
3) Similarly, if customer purchases 10 units, the final price is calculated as 3*€99 + 3*€89 + 4*€59.
Volume - Multiple price ranges per unit are defined in this model too, however, when pricing is applied, a single tier (and therefore a single price) is applicable based on the quantity of purchased items.
Example:
Let’s change the model of the above example into Volume pricing and see the differences. A hardware shop sells Set Top Boxes with volume pricing:
- For 1 to 3 units, the price is €99 per unit
- For 4 to 6 units, the price is €89 per unit
- For 7 units or more, the price is €59 per unit
1) If a customer buys 2 Set Top Boxes, the final price is 2 * €99 since the purchased quantity falls within the first tier.
2) If a customer purchases 5 Set Top Boxes, the price of the second tier is selected and therefore, the cost is 5 * €89
3) Similarly, if a customer purchases 10 units, the cost is 10 * €59.
Stairstep - Another model in which multiple ranges are set up. However, in this case the step price is a fixed price albeit determined by the quantity, but is neither incremental, nor is it multiplied by the quantity purchased in order to calculate the final cost.
Examples:
A software company provides support services to its clients based on the number of users.
- From 1 to 10, the price is €50
- From 11 to 30, the price is €100
- For 31 and over, the price is €200
1) If the service is purchased for 5 users, the client pays £50.
2) If the service is purchased for 20 users, the price is £100
3) If the service is purchased for 100 users, the price is £200.
As you can see, there’s no multiplication by the number of users.
Defining Product Prices
There are several factors impacting the definition of the product price; whether the product will be sold or rented, special Contact prices, prices in multiple currencies, whether the product is sold individually or as part of a bundle.
To add a new price for a product, select Add Price from the Pricing tab on the Product screen.
Pricing Settings
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Pricing Model
Start by selecting the Pricing Model
By default, a product’s price is defined in the Business’s base Currency. If more currencies are supported, then you can additionally add a price for each one of those currencies. Note that the price settings in the base currency will also be applied to any other currencies, i.e. all prices will have the same pricing model, tier ranges etc.
The Taxation model defines whether the specified price includes taxes or not. By default, your Business’s taxation model will be set, but you can override it for a specific product price.
Specify the Price (or prices in pricing models other than the Flat model), you can add as many tier ranges as required. Note that each tier level has a distinct start and end limit, and a price.
Price is for Sale or Rental. Use this price setting if the Business sells or rents physical goods to its Contacts. It is important to note that only traceable physical goods can be rented to Contacts, therefore the setting is available only when setting up prices for this product classification. In the case of a rental, you will also have to specify the expense service to be charged, as well as how often Contacts will be billed. For example, apply a rental fee of €5.99 per month for renting a Set Top Box device.
Price when sold as part of a bundle. Use this setting when you want to differentiate your prices based on the flexible bundle through which a product is purchased. For example:
Cables are sold at the price of €9.99 when sold as part of an Installation Kit (a product that includes a basic set of items for installing a decoder)
The price of the cables is €5.99 when sold as part of an Advanced Installation Kit
The price of cables when sold individually is €11.99
Price Terms
Price Terms are available only for termed and one-time services. Each price includes a set of terms that determine the services billing and contract terms in other words, the price terms affect the service’s terms where a contact subscribes to it.
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Multiple prices can be set up for termed services, each price having a unique se of price terms. Contacts order services by selecting one of the available price terms. In other words, on subscribing to a service, contacts do not just select the required service, they must also select with which terms they want to subscribe to. |
Billing Period: How often the service will be billed, i.e. its billing cycle’s duration.
Termed Period: The service’s termed period duration specified in number of billing cycles
At the end of the termed period, the service will either be automatically renewed for one more period or it will get expired.
Contract period: How long the service will be in contract (if any)
Trial Period: The services trial period (if any). The service’s billing cycle starts at the end of the trial period
Billing Method: Specif if service will be billed on a pre- or post-bill bass
Price Method: Provide a price guarantee to your contacts. Variable price method means that the price will e affected by price changes, whereas the
Advanced Options
Moving on, let’s check a Price’s Advanced Options. This set of pricing settings is optional, but it can be used to apply more complex pricing strategy such as setting up multiple-prices when operating in multiple countries and contact pricing.
Countries: Select one or more countries at which your business is operating at and apply pricing based on a contact’s Country of Agreement.
Supply Method: Differentiate your product’s pricing based on how it will be provided to the contact. For example, apply a different price for Delivery and another one for Pick u supply method.
Sales Method: Set up different prices for you Wholesale and Retail customers.
Groups: Refers to Groups of contacts and this group can be represented by either a segment or a set of specific contacts. Use this setting to apply special contacts pricing
Pricing Settings
There are no settings as such for product pricing, however, since the pricing model of a product is determined by the product configuration and particularly the product Type, it’s worth referencing the settings in the Product Catalogue manual.
Reference Material
You may also find it useful to refer to the following manuals for further reading in relation to Pricing.
Products
Order Catalogue
Subscriptions
TABLE OF CONTENTS
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