This is the sixth and the last blog in the How to **Set up pricing in Salesforce CPQ** series. In this blog, we will learn how to set up the discounts schedules in **Salesforce CPQ**.

- Volume Discount
- Term Discount
- Slab Discount

In last blogs, we have learnt how to set **pricing methods**, **Prorated Pricing, Special, Prices, Batch and Custom Prices**. If you want to read the last 5 blogs in this series, you can start reading them from here. If you want to understand more about the application of the system discounts and their effect on the **Pricing Waterfall** then you can start reading my blogs here.

**Let’s quickly revise the definitions of these discount schedules**:

**What is a Discount Schedule in Salesforce CPQ?**

**Discount schedules** are system discounts. They provide tier driven discounts to the List Price in the quote lines. They are a used to derive Regular price in the **CPQ Price Waterfall**. They are instrumental in derivation of the Net Price in a Quote. Discount Schedules are generally, **Volume, Term and Slab Discounts**.

**Examples**

**Volume Discount**-Tango Foods is listing Lunchboxes at a List Price of $15. There is a volume discount of 10% on 25-50 and 20% on 51-75 lunchboxes. If there is an order of 37 then 10% discount will be applied on the List Unit Price of $15. The price of 37**lunchboxes**will be 37 * [15 – (10% of 15)] = $499.5. This price is the Regular price and if there is no further discount then this becomes the net price.

**Term Discount-**Let’s assume that Lunchbox product with Tango Foods is a subscription product and a**monthly subscription of Lunchbox Costs**$250 in which the buyers get 20 lunchboxes in a month. There is a Term discount on this subscription. The term discount schedule is as follows- 3-5 months – 10%

- 6-8 months – 15%

- 9-12 months – 20%

If the buyer goes for a 5 months subscription then there is an entitlement of 10% percent discount applicable on List Price. On a List Price of $250 for a monthly subscription, the price of 5 months subscription will be [$250 – (10% of 250)] * 5 = $1125. If there are no additional discounts then this becomes the net price.

**Slab Discount**– Tango Foods is listing Lunchboxes at a List Price of $15. There is a volume based**slab discount**of 10% on 25-50, 20% on 51-75 lunchboxes and 30% on 76-100 lunchboxes If there is an order of 78 Lunchboxes then the pricing will be calculated as follows

For 50 boxes – 50 * [15- (10 % of 15)] = $675

For next 25 boxes – 25 * [15 – (20% of 15)] = $300

For next 3 boxes – 3 * [15 – (30% of 15)] = $31.5

Total price is $1001.5 based on the **Slab discount** and if there is no further additional discounts then this becomes the Net Price.

**Applicability of Discount Schedules**:

**Discount schedules**are applicable in all domains, industries and products. This is a generic pricing strategy.- There can be different types of discount schedules used with different products and different industries but being system discount they are applicable in all domains. For example, McKesson a big distributor or medicinal supplies can apply slab based discounts on some products while volume and term based on discounts on some other products. Term discounts are generally applied on Subscription products.

**How to set the Discount schedules**

**Volume Discount**– Discount Schedule is an object in**Salesforce**with Multiple LookUps as it can be applied in many places. Most generally it is applied at the product level. A**discount schedule**record is created and the tiers on the discount schedule record are filled. For example if there is discount of 10% on 1-10 quantities then 10% the tier name is given along with 1 in lower bound and 10 in the upper bound of the tier along with the discount percent of 10%. Product can assigned from within the discount schedule or the discount schedule can be assigned to the product from the Product object also from a specific product record.**Term Discount**– Term discount is created just like a volume discount but with minor differences. It is applied only to subscription products through the Term Discount field on the subscription product records. The other difference is that the tiers in the term discount contain the length of the term. For example if on a subscription product, 10% discount is offered from 3-6 months of subscription and 20 % from 8-11 months then these terms have to inputted in the tiers column along with lower and upper bounds.**Slab Discounts**– Slab discounts are defined by the type of a discount schedule. If a**discount schedule**is to be a slab discount then the Discount schedule Type filed value should be Slab. The discount schedule value type for volume and term discount is ‘Range’. We have already seen the working of Slab discounts in the examples above.

**Important Tips and pointers on Discount schedules:**

- Besides products, discount schedules can be applied in many other objects allowing a targeted application of discount schedules. They are created in the way explained above but can be applied in other objects. To be noted that if applied at many places there is an order in which the application of discount schedule to quoteline is prioritized.
- Contracted Price – 1

- Price Dimension – 2

- Product Option – 3

- Feature – 4

- Product – 5

Notice that application of **discount schedule** on the product is the most generic application and has least priority.

- Usually discount schedules are based on the Quote Line Quantity field. Salesforce CPQ gives us the option to define
**custom discount schedules**. These are based on fields other than quote line quantity. For example on a**volume discount**of 10% for quantity ordered between 5 and 10, the discount is getting evaluated on the quantity field. Let’s say we wanted to evaluate the discount on the field other than quantity or**subscription term**, then the field needs to be defined and it becomes a custom discount schedule. Another example could that the**discount schedule**is defined on shipping method – like a 10% on a 5 day standard delivery and 5% on a 2 day shipping. This becomes a case of custom discount schedule. There can be other examples of custom discount schedule.

I hope that I have been able to explain the gist of **discount schedules** to you all. This marks of How to **set up Pricing Series**. I am doing some interesting reading and will come possibly with a comparison of **Vlocity CPQ** offering Vs **Salesforce Steelbrick**. Your comments, shares and likes will keep me motivated.

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