Dive Into Discounts
Learning Objectives
After completing this unit, you’ll be able to:
- Describe what discounts are and how to use them.
- List the three types of discounts.
- Summarize how discounts are used in the cart.
- Explain how to delete discounts.
Get Started with Discounts
As you’ve seen, promotions provide an excellent way for Ada to adjust prices for a limited time and help generate revenue for Infiwave. Discounts are another way to reduce the price of:
- A product or category of products
- An entire catalog of products
- Individual items in the cart
- The entire contents of the cart
Discounts can be percentages, such as a 20% price reduction applied to the Infiwave Phone 10, or an absolute value, like a $15 off the price.
Your product team designs and builds discounts in your catalog. After you apply the discounts, you can manually adjust them to suit your customer. There’s even an option to create and apply custom discounts in the cart. So, what can you do with discounts?
- Define discounts and apply them to future orders linked to specific accounts and contacts.
- Edit the amount or percentage of discount offered, the number of months the discount is active on an account or contract, the end dates, the applicable sales catalog, and more.
- Apply discounts to a product or a group of products in the sales catalog, such as all phone accessories.
- Create new discounts in the cart.
Types of Discounts
To be available to CSRs, discounts must be active and associated with the selected price list for the quote or order they’re working with. Discounts may also have rules attached to help CSRs choose the right one for the situation.
Industries CPQ gives you order-based, account-based, and contract-based discounts. Here’s a closer look.
Order-Based Discount
An order-based discount is a one-time discount applied at the time of purchase against a specific product, a collection of products such as sales catalogs, or all items in the cart. It’s a great way to motivate the customer to buy additional products. To close more sales, an Infiwave CSR offers customers a 20% discount on all phone accessories.
Account-Based Discount
An account-based discount is saved against an account for future discounting and applies toward any later purchases until the validity of the discount ends.
Account-based discounts are excellent ways to retain loyal customers as part of a loyalty-and-retention (L&R) program. For example, Acme negotiates a 15% discount with Infiwave on all internet services. The negotiated discount is stored on Acme’s account, and any future orders for Acme automatically receive a 15% discount on internet services.
Contract-Based Discount
Contract-based discounts apply a discount specified in a contract to a quote or order. Contracts may have a corresponding frame agreement that defines the negotiated terms. You use frame agreements to set up product-, category-, and account-level discounts and drive pricing for future sales.
For example, Acme negotiates a 5% discount with Infiwave on all accessories for Acme employees who purchase Infiwave Phone products. The discount is stored and activated on Acme’s account and automatically applied whenever an Acme employee adds any Infiwave Phone products to their cart.
Use Discounts in the Cart
As you’ve seen, discounts are a great way to reduce the price of an individual product, a collection of products, or all of the products in the cart. Add and edit pre-built discounts in just a few steps, or you can even create a custom discount.
Admins create most discounts, which the CSR can view by clicking the Add Discount button in the cart.
This opens the Apply Discount window with all the available discounts under two tabs—Qualified Discounts and Disqualified Discounts. In addition, any existing discounts already applied to the cart are shown under Applied Discounts. Just click Add beside the discount to attach it to the order.
As you saw with promotions, a small change can make the customer eligible for the discount, so it’s worth showing the disqualified discounts, too.
When none of the predefined discounts suit the business scenario, you can create a custom discount for a set of products in your sales catalog. You can also assign a custom discount amount with a custom time frame if required. After you save it, the custom discount gets added to the Discounts tab in the cart.
Rejection isn’t the only reason you might need to delete a discount. Maybe you made a mistake or need to start fresh. Whatever the reason, you can always delete a discount. From the cart workspace of your order, in the Applied Discounts section, select the action menu of your discount, and click Delete. The discount no longer features in the Applied Discounts list.
Discount Approvals
By default, discounts are automatically approved in the quote and order process. However, if your organization has implemented a discount approval process, a discount approval button shows in the cart. Also, new quotes and orders containing discounts have an Approval status of Required.
If a discount requires approval, the cart shows an alert at the top of the order. Click Request Approval, and the Approval status changes to Pending. Once the discount is approved, you’re ready to submit the order. Then the order status changes to Activated. If the discount isn’t approved, the status changes to Rejected. To perform any further actions on the order, you need to amend or delete the discount.
What’s Next?
Now that Ada is familiar with promotions and discounts, she needs to decide which pricing adjustments are suitable for the Back to School Student Offer. In the next unit, follow her to pick the right pricing adjustment.
Resources
Quiz Scenario
Ada created an order-based discount to reduce the price of mobile phone accessories by 20%. This discount allows Infiwave CSRs to incentivize a sale at order capture. Ada has also set up a discount approval process at Infiwave. Remember that unhappy customer who wanted to cancel his service? However, the CSR feels that 20% isn’t enough to satisfy the customer, so they want to increase the discount to 25%.