Understanding and Setting up Partner Discounts in Salesforce CPQ

Ever wondered, “Do discount offers actually increase sales?”

Well, the short answer is yes, they can. Discounts can be a great way to attract customers, especially those who are on the fence about making a purchase. Sometimes, all it takes is a little nudge and a discounted offer!

Even if customers already have reasons to buy, discounts can provide that extra push to seal the deal.

Moreover, bundle discounts are incredibly effective when executed correctly.

Essentially, a bundle discount offers customers a better deal when they buy multiple items instead of just one.

For example, while a customer might purchase item A for $5, they can get a better deal by buying two for $9 or three for $13. These discounts work even better when customers can customize their selections, allowing them to choose the items they want while still enjoying the savings.

Now, imagine! If a discount can help you sell more to your customers, anticipate its impact when you are dealing with your partners.

Partners play a significant role in driving revenue, with 58% of sales generated by their top reps. Additionally, partnering influences a 60% increase in deal size.^[i]

Given these impactful statistics, offering discounts, especially partner discounts becomes crucial for nurturing these relationships and maximizing sales potential. So, how can you effectively manage these discounts?

Turn to a comprehensive CPQ solution, such as Salesforce’s. With its robust features, including pricing optimization and discount management tools, Salesforce CPQ empowers businesses to streamline discount processes, ensure accuracy, and maintain profitability while fostering strong partnerships.

In this article, we’ll understand more about Partner Discounts in Salesforce CPQ and how to apply them.

Let’s get started!

Partner Discount: What It Is and Why It Matters?

Partner discounts are special pricing offered to your business partners, such as resellers, distributors, or wholesalers. These discounts incentivize partners to promote and sell your products or services to their customer base. Partner discounts are important for businesses for several reasons:

Better Market Reach: By offering discounts to partners, you can leverage the partner’s customer base and market presence to reach new audiences and geographic regions that might be difficult to penetrate independently.

Increased Sales Volume: Your partners who receive discounts are more likely to promote and sell the company’s products or services, leading to higher sales volumes and revenue growth.

Strengthened Relationships: Providing discounts helps you foster strong, long-term relationships with partners. It shows commitment to mutual success and can lead to more collaborative and beneficial partnerships.

Competitive Advantage: Offering partner discounts can give you a competitive edge by making your products or services more appealing to partners than those of competitors who do not provide such incentives.

Cost Efficiency: Partnering with others can be a cost-effective way to grow. Partners often handle marketing, sales, and distribution efforts, reducing the company’s direct expenses in these areas.

Brand Awareness and Credibility: Partners can help increase brand awareness and credibility. When trusted partners endorse and sell a company’s products, it can enhance the brand’s reputation and trustworthiness in the market.

Understanding Partner Discounts in Salesforce CPQ

Salesforce CPQ simplifies your management of partner discounts with structured price waterfalls, configurable schedules, custom fields, automated approvals, and robust reporting. Manage relationships, optimize strategies, and drive growth effectively.

1. Price Waterfall

CPQ uses price waterfalls to determine the final price for a product in a quote. Partner discounts are typically applied at a specific stage in the waterfall, following standard discounts and list prices.

How it works: Price waterfalls in CPQ allow businesses to set up a sequential pricing model where discounts, including partner discounts, are applied in a structured manner. For example, a quote might start with the list price, then apply volume discounts, and finally apply a partner-specific discount based on their agreement. This ensures that the final price reflects all applicable discounts accurately.

2. Custom Fields
Salesforce CPQ allows you to create custom fields to store partner-specific information, like unique discount agreements or thresholds.

How it works: Custom fields in CPQ are invaluable for storing and managing partner-specific details related to discounts. For example, businesses can create fields to capture unique terms of discount agreements with specific partners or thresholds that trigger different discount levels. This flexibility ensures that each partner’s discount is managed according to their unique contractual terms and conditions.

3. Approval Workflows

CPQ enables the setup of approval workflows to manage partner discounts effectively. This ensures that discounts are applied consistently and in compliance with internal policies.

How it works: Approval workflows in Salesforce CPQ automate the process of obtaining approvals for partner discounts. For example, when a sales rep applies a partner discount that exceeds a certain threshold, the system can automatically route the quote for approval to the appropriate manager. This ensures that discounts are applied responsibly and per company policies, preventing revenue leakage.

4. Reporting and Analytics

CPQ provides robust reporting and analytics capabilities to monitor the effectiveness of partner discounts and optimize strategies.

How it works: Reporting and analytics in CPQ allow businesses to track the usage and impact of partner discounts over time. For instance, businesses can generate reports to analyze which partner tiers or products benefit the most from discounts, helping to refine discount strategies and improve profitability. This data-driven approach ensures that partner discounts are aligned with business objectives and contribute to overall sales growth.

4 Steps to Using Partner Discounts in Salesforce CPQ

Salesforce CPQ empowers you to manage partner discounts efficiently, streamlining the quoting process and fostering stronger partner relationships. Here’s a step-by-step blueprint to get you started:

1. Define Your Partner Discount Strategy

• Discount Tiers: Establish different discount levels based on factors like partner performance, product category, or order volume.
• Discount Calculations: Determine how discounts will be applied (percentage, fixed amount) and at which stage in the CPQ price waterfall.

2. Configure Price Rules and Conditions

• Price Rules: In CPQ, navigate to the Price Rules tab. Click New to create a new rule for partner discounts.
• Evaluation Scope: Set the Evaluation Scope to “Calculator” to perform calculations during quote line editing.
• Evaluation Order: Assign an Evaluation Order (e.g., 40) to ensure the discount is applied after standard discounts but before other adjustments.
• Price Conditions: Click New under Price Conditions to define the criteria for applying the discount. Here are two common approaches:
• Partner Tier Matching: Use a condition based on a custom field (e.g., Partner_Level__c) that stores the partner’s tier.
• Lookup Query: Create a lookup query that matches the partner’s tier on the quote with the corresponding discount in a custom object (e.g., Partner_Level_Discount__c).

3. Create Price Actions

Price actions allow you to set the discount value dynamically based on the partner tier or other criteria.

4. Activate and Test

• Activate the Price Rule to make it functional.
• Create a test quote with a partner selected and verify that the discount is applied correctly in the quote line editor.

Additional Tips:

By following these steps and best practices, you can leverage Salesforce CPQ to manage partner discounts effectively, strengthen partner relationships, and achieve your sales goals.

Remember: This is a general guide, and the specific configuration steps might vary depending on your CPQ setup and business requirements. It’s always recommended that you consult the Salesforce CPQ documentation for the latest information.

Need More Help With Setting Partner Discounts in Salesforce CPQ? Let’s Talk!

Statistical References
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