THE ESSENTIALS

To begin with, let’s take a quick look at some pricing terminology.

Pricing Models

The price model defines how a product’s price will be calculated depending on the number of units and 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 pricing, 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 number 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 fixed, albeit determined by the quantity. Still, it is neither incremental nor multiplied by the quantity purchased to calculate the final cost.

Example:

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.

Price Terms

Price Terms are available only for (service) product Types classified as Termed or One-time Services. Each service price, as such, includes a set of terms stating the service's billing behaviour and contractual conditions, such as how often the service will be billed, the duration of the service if there is a trial period or a contract period etc.

Usage Allowance

Allowance is the usage consumption permitted of Termed and One-time Service products within a period of time, based on the service price. The service allowance can be set in terms of money or in usage amount. Usage Allowance determines two things; which usage services a contact can consume and, optionally, a usage limit, i.e. how much can be consumed. In the latter case, no further consumption is allowed when the usage limit is reached.

Managing Pricing

To view or manage a product’s pricing, navigate to Commerce > Products using the main menu on the left-hand side of the screen, select the product in question, and then select the Pricing tab. If the product has a defined price, it will be displayed here.

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Defining Product Prices

Several factors impact 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, etc. CRM.COM caters for all these aspects.

To add a new price for a product, select Add Price from the Pricing tab on the Product screen. The configuration options on this modal vary according to the product Type classification.

Pricing Model

• Start by selecting the Pricing Model.

• By default, a product’s Price is defined in the Business’s base Currency. If multiple currencies are supported, add a price for each one of those currencies, and click on each currency to see the set price. 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.

• Optionally provide a Label for a price to differentiate between other prices for the same product. Price labels are visible during the ordering flow and provide additional information about the specific price in order to assist the user in selecting the correct one.

• Activate the Default toggle if the price indicated below should serve as the default price when a product has multiple prices. This default price acts as the base price and will be showcased when the product is listed. It guarantees precise billing for purchases when a specific contact does not have any applicable price.

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• The Taxation model defines whether the specified price(s) include taxes or not. Your Business’s taxation model will be set by default, 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 range and a corresponding 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.

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 could be purchased.

Example:

1) 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)

2) The price of the cables is €5.99 when sold as part of an Advanced Installation Kit

3) The price of cables when sold individually is €11.99

Price Terms

Configure the price terms for Termed or One-time Services.

• Billing Period - How often the service will be billed, i.e. its billing cycle duration

• Termed Period - The service’s termed period duration is specified in a number of billing cycles

• At the end of the termed period, the service is - Selected whether the service will either be automatically renewed for one more period or will expire.

• Contract Period - The duration of the service contract (if applicable)

• Trial Period - Set the trial period for the service (if any); the service’s billing cycle will start at the end of the trial period

• Billing Method - Specify if the service will be billed on a pre-bill or post-bill basis

Advanced Options

This set of pricing settings is optional, but it can be used to apply a more complex pricing strategy, such as setting up multiple prices when operating in multiple countries and special Contact pricing.

• Countries - If the Business operates on an international scale, it’s possible to configure pricing based on the Contact’s Country of Agreement

• Supply Method - Differentiate product prices based on how the product will be provided to the Contact, e.g. apply a different price for delivery, and another for pick-up supply methods

• Groups - Refers to Groups of Contacts, represented by either a Segment or by selecting Specific Contacts. Use this setting to apply special pricing to specific groups of Contacts.

• Sales Model - Set up different prices for Wholesale and Retail sales models, as well as any other configured Sales Model that the Business supports.

Allowance

From the Product screen, select the Allowance option to define which other services or physical goods can be consumed as part of this service, as well as how much can be consumed. This option is available only for products categorised as termed or one-time services.

Example

A coffee shop sets up a subscription service whereby consumers can purchase a Freddo Espresso on a daily basis for just €30 per month. The consumer places his order daily but doesn’t actually pay anything, since the order is paid for as part of the subscription service based on his allowance.

• The allowance can be defined as cash or as a usage amount

• The allowed products to be consumed can be usage services and/or non-traceable physical goods

• The allowance can be specified as the accumulated allowance among all usage services/non-traceable physical goods and/or per specific product

• Each allowance setting has three main restrictions

  • Per Transaction, i.e. each time usage is consumed

  • Per Day that includes usage that can be consumed within a calendar day or

  • Per Billing Cycle that shows maximum usage that can be consumed within a termed/one-time services billing cycle.

• Additional restrictions can be specified in terms of where the usage can be consumed, and this is represented by specifying Organisations (merchants/venues or service providers/service points)

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, 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

https://crmdevelopment.atlassian.net/wiki/spaces/CRM/pages/1397656045

Order Catalogue

https://crmdevelopment.atlassian.net/wiki/spaces/CRM/pages/1413416382

Subscriptions

https://crmdevelopment.atlassian.net/wiki/spaces/CRM/pages/1460961433

Contacts

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