Unlocking Pricing Flexibility in Your Bourbon Vanilla CPQ Setup

When it comes to pricing, accuracy and flexibility are crucial. Whether you're managing complex product configurations or tailoring specific customer discounts, a robust price model is the backbone of any successful Configure, Price, Quote (CPQ) system. At cpq.se, we’ve honed our "Bourbon Vanilla" CPQ setup to provide just that—a powerful pricing engine that ensures precision without sacrificing flexibility.

But how exactly is this pricing model structured? And how can it grow with your business needs? Let’s explore how we set up a basic price model and how you can extend it for more advanced configurations.

The Core of the Pricing Model: BOM-Driven Calculations

The Bourbon Vanilla pricing model is rooted in the Bill of Materials (BOM). Every product or component in your catalog is listed with its SKU, quantity, and any applicable attributes, which then drives pricing calculations.

Example Setup for a Basic Price Model:

• BOM Structure: The foundation begins with a hierarchical BOM. Each item is listed with its unique SKU, quantity, and any relevant flags (e.g., isNonStandard, specialRequest).

• Global Data Table: This table stores the list prices for each SKU. When a product’s SKU is referenced in the BOM, the price is automatically fetched from the table.

Basic Calculation Flow:

1. Retrieve List Price: The model fetches the price from the global table based on the SKU in the BOM.
2. Apply Quantity: The system multiplies the list price by the quantity of each item.
3. Calculate Total List Price: The list prices of all items are totaled to give a base price for the entire BOM.

In this basic setup, the system provides an accurate starting point for your quote. This simple structure is enough for businesses with straightforward pricing needs. However, real-world pricing often requires more flexibility, which is where the Bourbon Vanilla setup shines.

Adding Flexibility: Deal Discounts and User Inputs

The next step is adding flexibility through user inputs. This is where your sales team can adjust the system-generated prices to account for discounts, promotions, or special agreements with customers.

Example of an Extended Price Model:

• Item-Level Discounts: You can override the calculated list price of any individual item by applying a deal discount. For example, if you want to offer a 10% discount on a particular item, you can input this directly into the system, and it will recalculate the net price.

• Summary-Level Discounts: Alternatively, you can apply a discount to the entire BOM. This is particularly useful for bulk discounts or promotions. For instance, if the total price exceeds a certain threshold, you might want to apply a 5% discount to the entire quote.

Here’s how it works:

1. Deal Discount Input: At the item level, the user can input a specific discount percentage. If no item-level discount is entered, the model looks for a summary-level discount.
2. Net Price Calculation: After applying the deal discount, the net price is recalculated based on the adjusted total.
3. User-Overridden Net Price: In some cases, you may need to directly input a final net price for the entire BOM. The system allows this override, recalculating the overall discount based on the difference between the calculated and overridden prices.

How We Set Up a Basic Price Model

Now that we’ve explored the capabilities, let's look at a quick lesson on setting up a basic pricing model in Bourbon Vanilla:

Step-by-Step Setup for a Basic Price Model:

1. Create the BOM: Start by defining your product structure. Each product or component should have its SKU, quantity, and relevant attributes listed.

2. Populate the Global Data Table: Ensure every SKU in the BOM has a corresponding price in your global data table. This table acts as your pricing source, storing the list price for every product in your catalog.

3. Set Up Item-Level Calculations:

   • List prices are retrieved for each SKU.
   • Quantified prices are calculated by multiplying the list price by the quantity for each item.

4. Add Flexibility with Deal Discounts:

   • Allow user inputs to adjust the discount on an item-by-item basis or apply a summary-level discount across the entire BOM.

5. Calculate Net Prices: After applying all discounts, the system generates the final net price for each item, which is then summed for a total price quote.

This setup is perfect for businesses that need efficient pricing but want to keep things simple.

Extending the Price Model for Complex Scenarios

For more complex needs, the Bourbon Vanilla pricing model can easily be extended. Below are a few ways to enhance the model to support advanced configurations:

1. Regional Pricing Adjustments

If your business operates in multiple regions, you can extend the model by adding a regional multiplier. For example, list prices in the global data table can be adjusted based on currency conversion rates or regional taxes.

How It Works:

• A new field is added to the data table that applies region-specific factors (e.g., price * regional adjustment).

2. Custom Pricing Tiers

Some businesses offer tiered pricing based on order size or customer category (e.g., VIP customers, high-volume buyers).

How It Works:

• Additional fields in the global data table specify pricing tiers. When the BOM is processed, the system checks customer profiles or order quantities to select the appropriate tier.

3. Multi-Level Approval for Discounts

For organizations that require approvals for specific discount thresholds, the price model can be extended to integrate a multi-level approval process.

How It Works:

• When a deal discount exceeds a pre-set percentage, the system triggers an approval workflow. This ensures that larger discounts are reviewed before they’re applied to the quote.

Take Your Pricing to the Next Level

If you're ready to implement a flexible pricing model that scales with your business, our Bourbon Vanilla CPQ setup is designed to help you move fast and stay accurate. To learn more about how cpq.se can enhance your quoting process, visit our pricing solutions page or schedule a virtual coffee with Magnus or Patrik at https://www.cpq.se/meetcpqse.

Let’s create a pricing model that works for your business, no matter how complex or dynamic your needs may be.