In the first 2 blogs of this series, I covered general differences between Salesforce and Vlocity CPQ, Vlocity and Salesforce Order Capture and cart, Enterprise Product Catalog, and differences between the pricing functionality of both applications.

I have been able to go through the rest of the topics related to Vlocity CPQ and this will be the third blog of this series. In this blog, I will cover Vlocity CPQ Promotions and Salesforce CPQ Discounts.

In case you have not gone through the first and the second blogs of this series, you can start reading here. 

Vlocity CPQ Promotions and Salesforce CPQ Discounts

Vlocity CPQ Promotions

Vlocity CPQ Promotions, Adjustments, and Overrides are tools to discount the products and services in various conditions.

Before we get onto Vlocity Promotions, we should review Vlocity Adjustments and Overrides. Vlocity Adjustments and overrides are inbuilt into the Vlocity pricing element. For example, if there is a 20 percent discount to be given for the first three months in a 12-month phone plan subscription then it can be achieved by Vlocity CPQ Adjustments. If the price of the phone has to be overridden for an existing customer then it can be achieved by Vlocity CPQ overrides.

Vlocity Promotions gets differentiated with Adjustments and overrides by the way that it is a separate module and is optional. It is acquired by paying an extra license fee. It brings additional enhanced functionality to the table.

Vlocity Promotions have the following characteristics:

• Promotions do not change the price of the product or bundle. Promotions are defined separately from the product prices. They are separately applied and removed from the product price. The price of the product reverts to its original value once the promotion is removed from the product.

Let us take an example and try and understand other characteristics of promotion:

There is an iPhone New user promo bundle that is offering the iPhone 12 for a one-time price of $799 along with $40-dollar unlimited data and voice plan for a period of 24 months. In this plan, the price of the voice and data plan is discounted to $25 dollars for the first 6 months. The regular price of the iPhone 12 is $999 and the regular plan price is $55.

• Vlocity Promotions controls the penalty which is borne by the customers if they try to end the subscription early.
• Vlocity Promotions control what happens at the end of the subscription. There is an Opt-In- Opt-out feature that can continue or end the subscription-based on customer Opt-In or Opt-Out. For example, a customer is required to opt-out at the end of the subscription for the subscription to end otherwise the subscription will continue at the original rate.
• Vlocity Promotions allow multiple promotions to be applied at the same time to a bundle or product and one promotion after the other can also be applied. For example, as soon as a promotion offering a 20% discount on the plan price for the first 3 months’ end, other promotions can be planned and applied immediately with the end of the first promotion. This is an interesting feature. The strength of this feature is that it is outside the rules framework and is completely configurable.
• Vlocity Promotions can be configured considering existing orders and assets. For example, if a promotion is based on a recent purchase of the customer, this can be accounted for by the Vlocity promotions.

Salesforce CPQ Discounts

Salesforce CPQ offers a generic and robust discounting mechanism comprising of multiple discounts. Here are some features of Salesforce CPQ Discounts:

• Salesforce CPQ offers discounts like System Discounts, Additional discount, Partner and Distributor discount.
• Within System discounts, Salesforce offers term and quantity-based discount schedules.
• Salesforce CPQ allows mixing these discount schedules with different pricing like mixing Slab based discount with block pricing. For example,  If the block price of a product is 10-21 -$100 and 21-31 is -> $90 and then anything above 20 is a 10% percent discount with a List price of $10 then this discount works in tandem with the block pricing.
• Another important feature of the Salesforce CPQ discount is that they are an integral part of the Salesforce CPQ Price waterfall and flow logically to derive the Net Price of the product which is to be charged to the customer. For example, Tango foods are offering a Lunch Box for $15 dollars. There is a system discount of 10% if more than 10 boxes are purchased. There is an additional 10% discount for new customers and if this customer is a partner then there is an additional partner discount of 10%. Let us look at a sample calculation to appreciate the role discount plays in Salesforce CPQ by calculating the Net price of 25 Lunchboxes in one order
  • List Price of a Lunchbox – $15
  • Regular Price of the Lunchbox – List Price – System discount
  • System discount calculation for 25 Lunchboxes – As >10 then system discount = 10% of $10 = $1.5 per unit
  • Calculated Regular price per unit is – $10 – $1.5 = $8.5
  • Total Regular price is – $8.5 * 25 = $212.5
  • Customer Unit price is – Regular Price – Additional Discount = $8.5 – (10% of 8.5) = $7.65
  • Total Customer unit price – $7.65 * 25 = $191.25
  • Partner unit price – Customer Price – Partner discount = $7.65 – (5% of 7.65) = $7.27
  • Total Partner Price is – $7.27 * 25 = $181.75
  • Since there is no distributor discount Total Net Price is $181.75

This example is to show how discounts are integrated with prices in Salesforce CPQ and the role they play in Salesforce CPQ Price waterfall.

Comparative Snapshot      

Although, I have named this section ‘Comparative Snapshot’ the two products and their discounting and promotion features cannot really be compared as they are meant to fulfill different scenarios and they have different objectives. Following are some points where they can be directly compared

• Integration of Prices and discounts – Salesforce discounts are integrated with prices. They are cannot be separated from prices. For example, once the discount is configured it cannot be independently acted upon. In the right conditions, it will apply and modify the price. Vlocity promotion is completely independent of the Vlocity CPQ price and is applied separately to the product. It can be separated from the price on the fly and thus gives more flexibility in its context.

• Velocity has multiple discounting tools like Adjustment, Overrides, and Promotion while Salesforce has multiple very robust discounts available as a standard out of the box functionality.

• As already mentioned, Vlocity Promotions and the entire Vlocity CPQ product are currently serving the Communication and energy vertical only while Salesforce CPQ and its discounts are generic and can be mostly applied in many business scenarios and industries.

• Vlocity Promotions are mainly aimed at communication subscription and bundled products while Salesforce discounts have a wider usage and can also be used with usage-based products.

• Although Vlocity Promotions is currently focused on the telecommunication industry, I see that it can be extended to have a broad reach. It has some interesting features which Salesforce misses on out of the box, for example, Opt-in, Opt-out, automatic applicability of series of promotions, and applicability of multiple promotions on to the product at the same time.

To sum it up, I can say that Vlocity Promotions is quite a cutting-edge module with some leading features. It can be widely extensible and its combination with the Force.com platform is quite a winning combination.

I hope that you have a decent idea of Salesforce, Vlocity discounting, and promotion capabilities.

Your likes, shares and comments will motivate me to keep writing.