Multi-Dimensional Quoting (MDQ) Simplified: How to Implement MDQ Products in Salesforce CPQ

Sasha is a sales manager at a fast-growing tech company, AZ Solutions, known for its cutting-edge project management software. One of her top clients, DeAx Infotech, approaches her with a unique requirement: they need a flexible pricing structure that can accommodate 50 users with a quarterly subscription, plus premium support and advanced analytics. Creating an accurate quote for such a detailed request seems daunting, but Sasha manages it seamlessly and impresses the client, all thanks to Multi-Dimensional Quoting (MDQ) in Salesforce CPQ.

In this blog post, we will delve into how MDQ products can simplify complex pricing scenarios like this one. You’ll learn how to implement MDQ in Salesforce CPQ, understand its benefits, and see real-world applications that can revolutionize your quoting process.

Whether you’re dealing with time-based subscriptions, usage-based pricing, or bundled services, MDQ can help you deliver precise and tailored quotes with ease. Let’s explore the transformative power of MDQ and how it can enhance your sales efficiency and customer satisfaction.

Understanding MDQ Products

MDQ stands for Multi-Dimensional Quoting. It’s a feature typically found in sales quoting software like Salesforce CPQ. It allows you to create and manage subscription products with more granular pricing and quantity control.

Here’s how it works:

• Breakdown by Segments: An MDQ product breaks a subscription into smaller segments like months, quarters, or custom periods.
• Independent Pricing & Quantity: Each segment can have its own pricing and quantity. This gives you the flexibility to offer discounts or adjust pricing based on the subscription period.

Example: Imagine a software subscription with a yearly term. You can use an MDQ product to define different prices for the first year (introductory offer) and subsequent renewal years.

Here are some benefits of using MDQ products:

• Sales Reps Get More Control: Sales reps can tailor quotes to fit specific customer needs by adjusting pricing and quantities within each segment.
• Complex Subscriptions Made Easy: MDQ products are useful for handling complex subscriptions with varying pricing structures throughout the term.
• Clearer Visibility: By segmenting the subscription, the customer gets a clearer picture of the cost breakdown over time.

Key Features of MDQ Products

By utilizing MDQ products in Salesforce CPQ, you can handle complex pricing scenarios with ease, providing accurate and tailored quotes that enhance your sales efficiency and customer satisfaction. This makes it possible for you, as Sasha, to meet DeAx Infotech’s unique requirements effortlessly and maintain a strong client relationship. Here’s how it helps:

Multi-Dimensional Pricing:

With MDQ, you can define pricing across multiple dimensions such as different time periods, usage levels, or quantities. For DeAx Infotech, you need to set up pricing that varies by the number of users, the subscription duration, and additional features like premium support and advanced analytics.

Example: You set the base price at $18 per user per month for a quarterly subscription. For 50 users, this dimension alone simplifies your pricing model.

Flexible Quoting:

MDQ allows you to create quotes that reflect complex pricing structures, ensuring they are accurate and tailored to the client’s needs.

Example: When you input DeAx Infotech’s details into Salesforce CPQ, the system automatically adjusts the quote based on the number of users, subscription length, and selected features, ensuring an accurate and customized quote.

Customizable Time Slices:

MDQ products can be broken down into time slices (e.g., monthly, quarterly, annually). Each slice can have its own pricing and discount structures, making it easy to handle subscription-based products with different pricing over time.

Example: You set up the quarterly subscription for DeAx Infotech with different pricing for each time slice. This means that if they decide to change the subscription duration later, the system can easily adjust the pricing accordingly.

Segmented Bundling:

Products can be bundled together with MDQ capabilities, allowing for segmented pricing and discounts within the bundle.

Example: DeAx Infotech wants both premium support and advanced analytics. With MDQ, you can bundle these features with the base subscription, applying separate pricing rules to each component. This means you can offer a discount for the premium support when bundled with the analytics feature.

Usage-Based Pricing:

For products priced on usage, MDQ allows for detailed tracking and quoting based on expected or actual usage.

Example: If DeAx Infotech later decides they need pricing based on the actual number of active users each month, MDQ can handle this by adjusting the quote dynamically based on their usage data.

Renewals and Amendments:

MDQ products are well-suited for handling renewals and amendments to existing contracts. Changes in pricing or product configurations can be easily managed over the contract’s lifecycle.

Example: DeAx Infotech wants to renew its contract but with 10 additional users and a switch to an annual subscription. With MDQ, you can quickly amend the existing quote to reflect these changes, maintaining accurate pricing and contract details.

How to Implement MDQ Products in Salesforce CPQ?

Step 1: Create MDQ Products

Start by creating a new product in Salesforce CPQ. Fill in all the required fields such as the pricing method, subscription term, product code, and product name. This forms the foundation of your MDQ product.

Step 2: Define Your Price Dimensions

Next, define the key dimensions that will influence your product pricing. These dimensions could include time periods (monthly, quarterly, annually), quantity tiers, and configurable attributes. You can also add a one-time setup fee by accessing the related object of Price Dimensions. Select the type of dimension you need, and this configuration will be reflected in the Quote Line Editor for your product.

Step 3: Test and Refine

Before rolling out MDQ products to your sales team, thoroughly test the configurations to ensure they work accurately. Make any necessary adjustments and refine the setup based on feedback from initial testing. Ensure the MDQ product appears correctly in the Quote Line Editor and functions as expected.

Step 4: Train Your Sales Team

Finally, train your sales team on how to use MDQ products effectively. Ensure they understand the benefits of MDQ and know how to leverage its features to create detailed and accurate quotes. Provide hands-on training and resources to help them get comfortable with the new system.

Key Points to Remember

• Automatic Date Assignment: The Quote Start and End Dates automatically become the start date of the first segment and the end date of the last segment, respectively.
• Segment Definition: To appropriately break the segments, the end date of the first segment must be defined.
• Subscription Limitation: Only monthly subscription items can be defined as Multi-Dimensional.
• Settings Adjustment: You can adjust the CPQ Settings for Pricing and Calculation if you need to configure non-consecutive segments.
• Usage-Based Pricing: MDQ Products do not support usage-based pricing.
• Bundling Restrictions: An MDQ Product cannot be a bundle itself, meaning product options cannot be associated with them.
• Part of a Bundle: An MDQ Product can be part of a bundle, although the quantity for the MDQ segments is independent of the parent bundle’s quantity.
• Multi-Currency Consideration: For multi-currency organizations, you must define separate Price Dimensions for each currency.

FAQs about Multi-Dimensional Quoting (MDQ) in Salesforce CPQ

Q: What is Multi-Dimensional Quoting (MDQ)?
A: MDQ in Salesforce CPQ allows you to create quotes that incorporate complex pricing structures based on multiple dimensions such as time periods, quantities, and additional features.

Q: How Do the Quote Start and End Dates Work With MDQ?
A: The Quote Start and End Dates automatically become the start date of the first segment and the end date of the last segment, respectively.

Q: How Do I Break the Segments Appropriately in MDQ?
A: To break the segments appropriately, you must define the end date of the first segment.

Q: Can Any Subscription Item Be Defined as Multi-Dimensional?
A: Only monthly subscription items can be defined as Multi-Dimensional in Salesforce CPQ.

Q: Can I Configure Non-Consecutive Segments in MDQ?
A: Yes, you can adjust the CPQ Settings for Pricing and Calculation if you need to configure non-consecutive segments.

Q: Does MDQ Support Usage-Based Pricing?
A: No, MDQ Products do not support usage-based pricing.

Q: Can an MDQ Product Be a Bundle?
A: No, an MDQ Product cannot be a bundle itself, meaning product options cannot be associated with it. However, an MDQ Product can be part of a bundle, although the quantity for the MDQ segments is independent of the parent bundle’s quantity.

Q: How Does MDQ Work in Multi-Currency Organizations?
A: For multi-currency organizations, you must define separate Price Dimensions for each currency to ensure accurate pricing across different currencies.

Q: What Are the Benefits of Using MDQ in Salesforce CPQ?
A: The benefits include accurate and flexible quoting, enhanced sales efficiency, customized pricing models, and the ability to handle complex pricing scenarios easily.

Q: How Do I Set up an MDQ Product in Salesforce CPQ?
A: You define the MDQ product by specifying the dimensions (e.g., time periods, quantities) and associated pricing rules in the Salesforce CPQ setup.

Q: Can MDQ Products Be Used for Annual Subscriptions?
A: MDQ Products are primarily designed for monthly subscription items, but you can configure them to handle various time slices, including annual subscriptions, by adjusting the segment definitions.

Q: What Should I Consider When Including an MDQ Product in a Bundle?
A: When an MDQ Product is part of a bundle, remember that its segment quantities are independent of the parent bundle’s quantity, requiring separate management.

Q: How Can I Manage Renewals and Amendments for MDQ Products?
A: MDQ Products are well-suited for managing renewals and amendments. You can easily adjust pricing and product configurations over the contract’s lifecycle in Salesforce CPQ.

Q: Are There Any Limitations To Using MDQ Products?
A: Limitations include the inability to support usage-based pricing and the restriction that MDQ Products cannot be bundled themselves. Additionally, a specific configuration is needed for multi-currency setups and non-consecutive segments.

Q: How do MDQ Products enhance customer satisfaction?
A: By providing accurate, detailed, and tailored quotes that meet complex requirements, MDQ Products ensures customers receive pricing that reflects their specific needs, improving overall satisfaction.

Need Help Setting Up Salesforce CPQ or Customize It for Complex Quoting Requirements? Talk to Us!