Managing Pricing
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 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.
Price Models
The price model for each product 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 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.
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.
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, 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, simply add a price for each one of those currencies, 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.
The Taxation model defines whether the specified price(s) include 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 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
Price Terms are available only for product Types classified as Termed or One-time Services. Each service price as such, includes a set of terms stating the services billing behaviour and contractual conditions.
Multiple prices can be set up for termed services, with each price having a unique set of price terms. Therefore, when a Contact orders a service, they must also select one of the available price terms to subscribe to.
Billing Period - How often the service will be billed, i.e. it's billing cycle duration
Termed Period - The service’s termed period duration specified in number of billing cycles
At the end of the termed period the service is - Select 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
Price Method - In cases where a Business decides to change the price of the service, this setting determines when the new price will take effect
Fixed - If the service was purchased with a Fixed price then the Business guarantees that the price will remain unchanged (recurring billing won’t be affected) - so long as the service is in contract, the new price will come into effect as soon as the contract period expires
Variable - Any price changes become effective immediately whether in contract or not
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 groups of Contacts
Sales Model - Set up different prices for Wholesale and Retail sales
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.
The allowance can be defined as cash or as usage amount
The allowed products to be consumed can be usage services and/or non-traceable physical goods
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.
Refer to the Usage Based Billing manual for further information (coming soon).
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
Contacts
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