Get Started with Promotions and Discounts

Learning Objectives

After completing this unit, you’ll be able to:

• Define promotions and discounts and why businesses need them.
  
• Explain the difference between promotions and discounts.
  
• Describe how they’re used in Industries Configure, Price, Quote (CPQ).
  
• List the benefits of promotions and discounts.
  

Before You Start

Before you start this module, make sure you complete the following required content. The work you do here builds on the concepts and work you do in that content.

• Industries Shared Catalog
  
• Industries EPC Foundations
  
• Industries CPQ Foundations
  

Also, consider completing the following recommended content.

• Manage Quotes, Orders, and Assets with Industries CPQ
  
• Get Started with Product Designer
  

Introduction to Discounts and Promotions

Why do businesses adjust product prices? The answer might seem simple: To generate more revenue, just increase the price of your products and services, right? Not necessarily. Lowering prices is a common strategy for businesses to increase a product’s market share. This benefits both the consumer, who saves money and gets additional value-add services, and the company, which gains new customers.

Your products and the surrounding market are evolving, so your pricing should too. Refine your pricing regularly to keep up with your competitors, the state of the economy, and the market as a whole. Industries CPQ gives you some easy ways to optimize your product pricing.

Hello Ada

Say hi to Ada Wilson, pricing manager at Infiwave, a communications service provider. Ada’s job is to set up pricing for Infiwave’s products and services. She also builds and maintains advanced pricing structures to align with marketing and selling strategies.

Ada wants to design and implement promotions and discounts to build a new customer base and encourage existing customers to buy more. To accomplish this, she’d like to create a Back to School Student Offer geared toward college students, a relatively untapped market for the company.

She’s confident the offer will increase the profit margin and give her company a competitive edge in the marketplace. However, before creating the promotion, Ada’s keen to understand how promotions and discounts work in Industries CPQ.

Sign Up for a Training Playground

We don’t have any hands-on challenges in this module. Still, if you want to practice and try out the steps, you need a special training org that contains Industries CPQ and our sample data. Regular Trailhead playgrounds and those from other modules don’t have what you need. Here’s how to get your free training org for this module.

1. Sign up for your Industries Training Playground for Communications, Media, and Energy.
   
2. Fill out the form.
   
   • Enter your first name and last name.
     
   • Enter an active email address.
     
   • Enter your company name.
     
   • Click Sign me up. A confirmation message appears.
     
3. When you receive the confirmation email (sometimes this takes a few minutes), log in to your training playground using the credentials in the email.
   

If you’d like to practice, check out the practice guides in the Resources section for each unit.

Promotions and Discounts in Industries CPQ

A key part of price management is using promotions and discounts to advantage. Depending on Infiwave sales objectives, Ada can use them separately or together. To help her decide whether to use promotions, discounts, or both, let’s dig a little deeper.

Promotions

A promotion is a set of rules that define how and when a customer gets a discount or other incentive to motivate them to make a purchase. Promotions may also reward customers for their loyalty. They typically run for a limited time, target a specific customer group, and apply to particular products. A promotion may or may not include a discount.

To maximize sales and increase customer loyalty, you can apply special pricing or rewards to products and product bundles using promotions. Because promotions are separate from product offers, product details like pricing stay intact. Once a promotion is active, a customer service representative (CSR) or salesperson can add it to an order, quote, or opportunity in the cart.

An example of a promotion is the Holiday Offer Bundle that Infiwave uses to entice shoppers to commit to a 24-month contract. It includes $300 off an Infiwave Phone 10, 20% off Unlimited Text + Talk for 3 months, and a free 2-year protection plan.

Discounts

Like promotions, discounts are also used to adjust prices, but promotions and discounts are different things. A discount is limited to a reduction in price, whereas a promotion has broader qualities. With Industries CPQ, you can use discounts in different ways. One way is in the context of the cart, and other ways involve accounts or negotiated contracts.

For an account-based discount, imagine that an Infiwave customer is unhappy with their cellular coverage, so they want to cancel their cell phone contract. To retain the customer, the Infiwave CSR offers them a 20% discount on all purchases for a year. In response, the customer agrees to continue their contract, so the CSR retains the account and strengthens customer loyalty.

Another way to use discounts is with a negotiated contract. An example of a contract-based discount is when an Inifiwave account executive negotiates a 5% discount on mobile phones for employees of ABC, a partner that provides Infiwave Phone cases. Once the discount is stored under ABC’s account and activated, anytime a new employee joins the company, the 5% discount automatically applies when they add an Infiwave Phone to their cart.

Discounts like these incentivize customers and accounts as part of a loyalty and retention (L&R) program or as a frame agreement such as a master service agreement (MSA).

Businesses and Their Challenges

All businesses strive to maintain top-quality relationships with their customer base, to keep their brands relevant and their employees happy. Being able to overcome obstacles sets a good business apart from its competitors. This section discusses some of the challenges involved in discounting and promoting products and how Industries CPQ Promotions and Discounts solves them.

CSRs and salespeople often strive to increase product upsell and average revenue per unit (ARPU). Increasing ARPU means that you’re onboarding more of the right customers and selling them on the value they’re interested in. This helps you create a more efficient sales and marketing system. However, it’s not easy. Businesses usually struggle to upsell, cross-sell, and increase ARPU.

Promotions and Discounts can highlight a more expensive product or value-added feature that raises the customer’s perceived value of the offering. For example, if they’re considering upgrading their Infiwave Phone 10 today, the CSR can offer a pre-built discount of 20% off on all Infiwave Phone accessories in the sales catalog. This not only helps to close the sale but also raises the ARPU, an indicator of the product’s profitability based on the amount of money generated from each Infiwave’s customers.

Promotions and Discounts also help enhance Net Promoter Score (NPS), and customer loyalty. NPS measures customer experience and predicts business growth by answering, “How likely is it that you would recommend Infiwave to a friend or colleague?” Respondents are grouped as Promoters (score 9–10), Passives (score 7–8), or Detractors (score 0–6). Using Promotions and Discounts, Infiwave can transform Detractors into Passives or Promoters through incentives to acquire new accounts and retain existing customers.

The market is changing drastically, so businesses need a swift response to market conditions to stay ahead of competitors. With Industries CPQ Promotions and Discounts, Infiwave can quickly add and automate promotions and discounts without cumbersome spreadsheets and wasted employee hours.

Benefits of Using Promotions and Discounts

Before Ada takes her Back to School Student Offer to Infiwave executives for approval, she wants to understand the benefits of offering promotions and discounts to make a persuasive argument. Let’s help her strengthen her case.

What’s Next?

In this unit, Ada explored the differences between promotions and discounts and how companies can use them to their advantage. In the next unit, follow along as she ventures further into the world of promotions.