Percent of Total

“Percent of Total” is a pricing model that allows users to set the total price of a product as a percentage of the total value of a set of other products in the same quote, order, or bundle.  It is a modeled as a type of Product Relationships in Nue.  

 

For example, if there are three products in an order with a total value of $100, and the "Percentage of Total" for Product A is set at 10%, the price of Product A would be $10 (10% of $100).

 

This pricing model offers a way to establish relative pricing relationships among products based on their collective value, enabling businesses to implement tiered pricing strategies or incentivize the purchase of certain items within a bundle or package.

PERMISSIONS   This feature requires the following functional permissions to be configured for the user role:  Advanced Pricing and Discounting View Product Relationships Manage Product Relationships

Examples

Here are a few examples of using "Percentage of Total" as a pricing model:

Example 1: SaaS 

Let's consider a software-as-a-service (SaaS) platform that offers various subscription plans. In this pricing model, customer support is included as part of the service and is calculated as a percentage of the total subscription fees. For instance, if the monthly subscription fee is $100 and the customer support fee is set at 20% of the total subscription fees, the customer would pay an additional $20 for customer support, making the total monthly payment $120.

 

In this example, the support service is a recurring service, billed in advance, and is 20% of the total recurring services fees. The support services and the recurring services may have the same billing cycle.

Example 2: Co-working Space Business

Suppose you are running a co-working space business. You offer different membership plans with various amenities and services. In this pricing model, additional services such as access to meeting rooms or printing facilities can be priced as a percentage of the total membership fees. For instance, if the monthly membership fee is $500 and access to meeting rooms costs an additional 10% of the total membership fees, the customer would pay an extra $50 for meeting room access, resulting in a total monthly payment of $550.

 

In this example, the meeting room access is a service that may be of Credit Burndown model.

Example 3: Reseller Commission

Consider an online marketplace where sellers can list and sell products.  In this case, the platform charges sellers a commission based on a percentage of the total sales they generate.  For example, if a seller's total sales for a month amount to $10,000 and the platform's commission rate is 5% of the total sales, the seller would be charged $500 as the platform's commission.

 

In this example, the commission rate is a service billed in arrears of the total consumption of the platform.

 

In each of these examples, the pricing model determines the cost of a specific service or feature as a percentage of the total value or fees associated with the product or service being offered.

Bundle-level Percent of Total

Bundle-level Percent of Total Product Relationship is a widely used concept, particularly in the SaaS industry for customer support, services, and more. This relationship indicates that the price of a specific product within a bundle is a certain percentage of the total prices of other products in the same bundle. It helps in understanding the cost distribution and the relative value of each product in the bundle.

 

We'll be using the following scenario throughout the tutorial to walk you through how to configure and use Percent of Total product relationships.  

 

SCENARIO   Aion Technology sells serverless databases. One of their flagship products is the Aion Enterprise Bundle, which includes a number of databases with various computing power, from Large to 4xLarge, Enterprise Support, and Unlimited Online Training.   Customers have the option to configure the number of users, the number and size of the databases.  The prices of Enterprise Support and Unlimited Online Training will be calculated according to the formula below:   Enterprise Support is 10% of the annual database subscription fee, with a minimum of $5,000 per year, and a maximum of $100,000 per year.   Unlimited Online Training is 5% of the annual database subscription fee. Where the annual database subscription is calculated as: {Total Number of Users} x {Sum of Total Prices per each database type}   For example: If a database with Large size is priced at $200 per month, and a customer purchases a 12-month subscription with 30 users, the annual database subscription is $72,000. The Enterprise Support is $7,200 per year, and the Unlimited Online Training is $300 per month.   If a database with Large size is priced at $200 per month, and a customer purchases a 12-month subscription with 10 users, the annual database subscription is $24,000. The Enterprise Support is $5,000 per year, which is the minimum requirement. The Unlimited Online Training is $100 per month.

Configure Products and Bundles

We can configure the following products and bundles to implement this scenario: 

 

Product Options

The following products and product options are created for this scenario.  "Aion Enterprise Bundle" and "Databases" are both bundles.  "Databases" is a child bundle of "Aion Enterprise Bundle".  

PRODUCT NAME	PRODUCT NAME	PRODUCT NAME	SKU	STANDARD PRICE	UOM	ADD-ON TYPE	CONNECT TO BUNDLE QUANTITY
Aion Enterprise Bundle			aion/enterprise	$500	Each/Month
	Databases		db/bundle	$30	User/Month	Required	No
		DB Instance - Large	db/large	$200	Each/Month	Optional	Yes
		DB Instance - XLarge	db/xlarge	$300	Each/Month	Optional	Yes
		DB Instance - 2xLarge	db/2xlarge	$400	Each/Month	Optional	Yes
		DB Instance - 4xLarge	db/4xlarge	$600	Each/Month	Optional	Yes
	Enterprise Support		aion/enterprise-support	$5000	Per Year	Required	No
	Unlimited Online Training		UNLIMITED_ONLINE_TRAINING	$100	Per Month	Optional	No

Create Percent of Total Product Relationships

After configuring the products and bundles, we can create a couple of product relationships to model the calculation of the prices for Enterprise Support and Unlimited Online Training.

 

In Nue, the bundle-level product relationships are created external to a bundle definition, so that you can configure a product relationship that is applicable to more than one bundles.  

 

Let's first create this Percent of Total: 

 

Enterprise Support is 10% of the annual database subscription fee, with a minimum of $5,000 per year, and a maximum of $100,000 per year.  

 

Please follow the steps below: 

• Login to Nue App
• Navigate to Price Builder → Product Relationships, or simply search for Product Relationships in the menu search bar
• Click New Product Reoationship and select Percent of Total in the split button.  

• In the Create Product Relationship popup, fill up the form using the following information: 
  • Description: Enterprise support calculation: 10% of the sum of annual price of enterprise bundles
  • Base Product: Enterprise Support
  • % of Total: 10 
  • Target Product: Click 'Advanced', and build the filter: Where SKU like db
    • Optionally, you cansume the "Simple" filter to type in all database products if the variation of database products is limited. 
  • Scope: Bundle
  • Price Between: $5000 and $10000 per Year
  • Notification Level: Error
  • Status: You may choose to set the status to Draft now and activate later, or set it to Active immediately.  

Now you can click 'Save and Create New" to create the second Percent of Total product relationship: 

 

Unlimited Online Training is 5% of the annual database subscription fee

 

For the second product relationship, we'll issue a Warning message when the relationship is violated.  

 

Please refer to the following screenshots of the two product relationships we just created: 

 

We can repeat the same steps above to create the second Percent of Total: 

 

Validate and Activate Product Relationships

If you choose to activate the Product Relationship at a later time, you can easily do so by clicking on the 'Activate' icon in the selected product relationship row within the Product Relationship List page. This allows you to manage and activate product relationships as needed with just a simple click.

 

When a product relationship is activated, Nue does the following validation to make sure it does not conflict or in a chaining relationship with other product relationships.  

 

VALIDATION RULE	EXAMPLE	ERROR MESSAGE
Cannot create a product relationship with overlapping Base and Target products	The following product relationship is invalid because Product A is used both as a base product and as a target product, which is not allowed:   Product A is equal to 10% of all recurring services, where Product A itself is a recurring service.   This rule prevents a product from being both the base and the target of the same relationship.	The base products cannot overlap with the target products of this product relationship, or the target products of any other active product relationships.
Cannot create more than 2 active Percentage of Total relationships with chaining relationship	The following two product relationships are considered to be in a chaining relationship, which will trigger a validation error if either one is activated while the other is already in Active status: The total price of Product A equals 10% of the total price of Products B and C. The total price of a product with a revenue model of One Time equals 10% of the total price of Products D and E, where Product C has a revenue model of One Time.   This ensures that conflicting or dependent pricing relationships do not exist simultaneously, maintaining the integrity of the pricing structure.	The base products cannot overlap with the target products of this product relationship, or the target products of any other active product relationships.

 

Since the two product relationships we created do not violate any of these rules, we can go ahead and activate both of them.

 

This is it! We have successfully created and activated two Percent of Total product relationships. Next, we can see them in action in the Line Editor.

Create a Quote with Percent of Total Product Relationship

In Salesforce, create a quote, and add Aion Enterprise Bundle to the Line Editor.  In the Configure Product popup, configure 2 "DB Instance - Large", and "3 DB Instance - XLarge", as shown in the below image, click Confirm. 

 

In the Line Editor, we can see that the sum of annual database subscription fee is $15,960.  The Enterprise Bundle is 10% with a minimum of $5000, thus it is calculated to $5,000.  The Unlimited Online Training is 5% of the annual database subscription fee, thus it is calculated as $798. 

 

If you attempt to reduce the Total Price of Enterprise Support from $5000 to $4000, an error alert icon will instantly appear in the line, indicating that an error has occurred. You can click on the alert icon to view the detailed error message. Once you change the Total Price back to $5000, the error will disappear, and the alert icon will be removed.

 

Similarly, if you attempt to change the total price of Unlimited Online Training to $700, you will receive a Warning alert.  

 

NOTE   The Notification Level configured for the Product Relationship determines the type of message triggered when the product relationship is violated.   For instance, if the Notification Level is set to "Warning," a non-blocking warning message will be displayed. If set to "Error," a blocking error message will be triggered. While a quote containing at least one error message can be saved and even finalized into an order, the order cannot be activated until the errors are resolved.    You can change the total price of a base product to be higher than the prices calculated from the product relationship without triggering a message, as long as the total price does not exceed the minimum value configured. This allows flexibility in pricing adjustments within the specified limits.

 

Now let's change the price of Unlimited Online Training to $700 and Enterprise Support to $4000. Additionally, change the quantity of Databases to 5. We will observe that the prices of both products are recalculated and overridden by the pricing engine. A notification panel will appear at the top of the Line Editor, displaying the details of the changes.

 

You can click the "Undo" icon to revert the changes, or the "Redo" icon to reapply the changes, providing an easy way to manage and review pricing adjustments.

 

Now let's set the Total Price of Unlimited Online Training to $1000 and click Quick Save. After the quote is saved, an Alert icon will appear next to the quote name, indicating that there are messages associated with the quote. There may be multiple messages available. You can click the Alert icon and use the Back and Forward arrows to browse through the messages. Messages are displayed with Errors first, followed by Warnings and Info.

 

While a quote containing at least one error message can be saved and even finalized into an order, the order cannot be activated until the errors are resolved. 

 

Now let's finalize the quote into an order, and activate the order.  Optionally, you can mark the associated opportunity as Closed Won if this quote is a primary quote.  

Upsell and Renew Subscriptions with Percent of Total

When users make changes to existing subscriptions, the Percent of Total product relationships will be executed when an order containing the changes is created.

 

After the order is activated, an Aion Enterprise Bundle subscription is created. You can navigate to the account detail page and click "Manage Customer Lifecycle" to access the Lifecycle Manager. In the Lifecycle Manager, click the "Subscriptions" tab and select the "Renew" action for the Aion Enterprise Bundle to renew the subscription for 12 months, while adding 10 more licenses. Finally, check out the changes in the Change Cart into an order.

 

In the Line Editor of the order, you can observe that the changes are calculated for all the database instances, which are part of the Target Products in both product relationships. As a result, Nue creates Adjust Price change lines for both Enterprise Support and Unlimited Online Training, with amounts corresponding to 10% and 5% of the sum of the change amounts of the target products, respectively.

 

This means that with the addition of 10 new licenses upon renewal, the prices for both Enterprise Support and Unlimited Online Training must also be increased.

 

You can also make changes in the Line Editor of the change order, whether for base products or target products. The prices will be automatically recalculated according to the Percent of Total relationships.

 

Please note the Minimum and Maximum prices defined in the product relationships will also be enforced in a change order. 

 

Messages are persisted with the quote or order. If you make changes to any of the active product relationships, you can click the Recalculate button in the Line Editor to trigger a recalculation of the entire quote or order.

 

Messages triggered by product relationship violations include references to the relevant product relationships. While you can deactivate a product relationship that has associated messages, you cannot delete it. An error will occur if you attempt to delete a product relationship that has at least one associated message.

Putting It Altogether

The Percent of Total Product Relationship at the bundle level is designed to manage and maintain the pricing integrity of products within a bundle. This feature allows you to define relationships where the price of one product (base product) is set as a percentage of the total price of other products (target products) within the same bundle.

Key Aspects:

1. Relationship Configuration:

   • Product relationships can be configured to ensure that the price of a base product is a specified percentage of the total prices of target products. This helps maintain a balanced and consistent pricing structure.

2. Notification Levels:

   • The feature includes configurable notification levels, such as "Info", "Warning" and "Error," which determine the type of message triggered when the product relationship is violated. Warnings allow for non-blocking alerts, whereas errors prevent further actions until resolved.

3. Automatic Recalculation:

   • When changes are made to the base or target products in an order or quote, the prices are automatically recalculated according to the defined Percent of Total relationships. This ensures that the pricing remains accurate and consistent.

4. Line Editor and Change Orders:

   • Users can make changes directly in the Line Editor, and the adjustments will be recalculated automatically. This includes adding new quantities or modifying existing ones. Changes are reflected in the pricing of related products like Enterprise Support and Unlimited Online Training.

5. Error Handling and Validation:

   • Validation errors are triggered when overlapping base and target products exist within the same relationship, or if conflicting relationships are activated simultaneously. Additionally, messages related to product relationship violations are persisted with the quote or order, ensuring that users are aware of any issues.

6. Activation and Deactivation:

   • Users can activate or deactivate product relationships as needed. However, product relationships with associated messages cannot be deleted, maintaining the integrity of historical data and preventing errors.

7. Lifecycle Management:

   • The feature integrates seamlessly with the customer lifecycle management process. For instance, renewing a subscription and adding new licenses will trigger recalculations and adjustments based on the defined relationships.

Overall, the Percent of Total Product Relationship feature provides a structured and automated approach to managing complex pricing scenarios, ensuring consistency, accuracy, and ease of use in product bundling and pricing strategies.