Price and Discount Tags

price tags and discount tags are unique and important concepts in nue they serve as additional pricing mechanisms on top of list prices defined in standard or custom price books list prices defined in price books are considered basic unit prices with price tags and discount tags, users can define additional pricing tiers or tier based discounting based on quantity or subscription term, thus helping businesses to offer flexbile pricing options to customers based on their needs and budget do you know? the price tags and discount tags concepts may be new in b2b selling, but they have been a common practice in the consumer world let's take the example of a shoe store when you come across a pair of shoes with a manufacturer's suggested retail price (msrp) of $450, you may notice multiple price tags stacked on top of each other there's a first price tag showing $300 because they're currently on sale and wait, there's more! there is a yellow tag indicating an extra 20% discount because of o a limited time seasonal promotion, followed by a red tag offering an additional 5% off for store members each tag represents a distinct promotion that has been layered onto the product, adding to its value and potential cost savings for customers as the store owner, this layered approach with multiple price tags provides you with valuable insights this level of visibility enables you to assess the effectiveness of different promotions and gauge their impact on sales in nue, price tags and discount tags have exactly the same structure, but serve different purposes price tags set the price (which overrides the price book prices), and discount tags set the discounts while you can have a single price tag, you have the flexibility to include many discount tags based on your requirements this, combined with list prices, multi attribute pricing, price tags, and discount tags, grants you virtually limitless pricing possibilities price tags (or discount tags) a price tag can be a price type price tag, or a discount type price tag, hence we call them price tag and discount tag respectively structurely, throughout this document, we refer to both price tag and discount tag and price tags create price and discount tags you can follow the steps below to create price and discount tags login into nue app navigate to price builder → price tags click "new price tag" to create a price tag, or "new discount tag" to create a discount tag attributes on a price tag include (examples will follow after these definitions first) price tag name give your price tag a name code if your price tag will be used as a promotion or coupon code, enter it in the code field description description can be used to provide a short description of the price tag uom dimension the dimension will define whether the price model (volume vs tiered) will be applied to quantity or term if quantity is selected, you will need to select a quantity unit, e g user, hour, agent, etc , so that this price tag is only applicable to products having this quantity dimension if term is selected, you will see term dimensions available in tiers, allowing you to customize the term the tag is valid for price model this option will determine whether the price tag will be applied to total volume or based on a tiered or ramp pricing model start time this is the date/time the price tag will be applied any quotes with a start date earlier than this date/time will not be able to apply the price tag end time this is the date/time the price tag will end any quotes with a start date after this date/time will not be able to apply the price tag active when enabled, the price tag will be active if disabled, the price tag can no longer be applied tier type available values are volume, tiered, ramp volume if selected, the price of all the units you’re selling is within the set price range it works great for selling products or services in bulk tiered if selected, the price per unit you’re selling is within a particular price range once you fill up one tier you move to the next it works best for usage it gives your customers incentives to use and purchase more ramp if selected, the price of the current subscription term is calculated based on the price of the previous subscription term effective dates start time / end time note that since price tags are also used for discounting purposes, the effective dates need to be of type datetime instead of dates (e g , the promotion starts at 8pm pst) active \ indicates if the price tag is active when enabled, the price tags will be applied; otherwise they will no longer be applied the start time, end time and active status determine when and whether this price tag will be applied price tiers (or discount tiers) a price tag contains one or more price tiers you can click 'add tiers' to quickly add one or more price tiers each price tier contains the following attributes tier type available values are flat fee, per unit the default tier type is per unit you can mix and match flat fee and per unit tier types in a price or discount tag for example, for 0 100 units it's $1 each, and for all units above 100, it's $100 flat starting unit / ending unit the defined range of this tier the tiers are based on an "exclusive/inclusive" starting and ending unit by default, the starting unit starts from 0, instead of 1, in case that your uom is not an integer for example, if the starting unit is 0 and ending unit is 100, then the quantities fell into this tier are greater than 0, and less than or equal to 100 if this is a term based price or discount, then the starting and ending unit use subscription term as the unit dimension for example, you can set starting and ending unit as \[0, 12] for the prices of the first year starting term dimension / ending term dimension ( this feature is available in release 2502) these fields define the duration units (e g , days, months) for term based price models you can combine different units between starting and ending ranges to create flexible pricing tiers for example, atier could start at 15 days and extend to 3 months amount the dollar amount of this tier for a price tag, this sets of the prices (either per unit price, or a flat fee price for the entire tier); for a discount tag, this sets dollar amount of the discount discount percentage the discount percentage of this tier applicable only for discount tags tiered, volume and ramp pricing what’s the difference between tiered, volume and ramp pricing? this is probably the most commonly asked questions in (advanced) pricing strategies when you create a price tag, you can pick from 3 price models tiered, volume, and ramp they look similar but at the same time very different volume pricing focuses on offering discounted rates as the quantity purchased increases this model is commonly used in wholesale scenarios for instance, buying a single watermelon may cost $2, but purchasing a dozen could give you a 10% discount similarly, buying 100 watermelons might result in a 20% discount, and so on tiered pricing involves different price points assigned to various quantity tiers this model is commonly utilized in usage based pricing models for example, in telecommunications, making less than 100 minutes of international calls may be free, while exceeding 100 minutes incurs a charge of $0 10 per minute however, if the usage surpasses 1000 minutes, the price is capped at $100 per month subscription ramp pricing docid\ cao1vo3zv3soiywbwt3a5 is specific to subscription based services, allowing users to "get in" with lower prices, often including free trials over time, as users continue to use and derive value from the product, the company gradually raises the price, for example with a yearly increase of around 5% over the previous year remember we can layer price tags together just like those green/yellow/red tags in a grocery store in nue you can easilyachieve complex pricing like this if you purchase a medical device, we throw in 100 minutes of the device usage for free monthly for the first year if your monthly usage exceeds 100 minutes, we offer 10% discount for each additional minutes the price will increase by 10% each year pricing scenarios to help you better understand how to user price and discount tags, we provide the following user scenarios scenario #1 volume pricing for product a, for quantity under 100 units, it’s $100 flat fee; for quantities between 101 200, it’s $0 8 per unit, 201 300, it’s $0 5 per unit; and $0 4 for quantities over 300 if a customer orders 50 units of product a, then it’s $100; if a customer orders 250 units of product a, then it’s $250 0 5 = $125 to achieve this, we create a discount tag as the following price tag tier type uom dimension volume quantity price tiers tier # price model starting unit ending unit amount 1 flat fee 0 100 100 2 per unit 100 200 0 8 3 per unit 200 300 0 5 4 per unit 300 0 4 scenario #2 tiered pricing for product b, for quantity under 100 units, it’s $100 flat fee; for the 101st to 200th units , it’s $0 8 per unit, 201st 300th, it’s $0 5 per unit; and $0 4 for 301st above if a customer orders 50 units of product a, then it’s $100; if a customer orders 250 units of product a, then it’s 100 + 100 0 8 + 50 0 5 = $205 to achieve this, we create a discount tag as the following price tag tier type uom dimension tiered quantity price tiers tier # price model starting unit ending unit amount 1 flat fee 0 100 100 2 per unit 100 200 0 8 3 per unit 200 300 0 5 4 per unit 300 0 4 scenario #3 volume percentage discounting for product c, the original price is $1, 10% discounts will be applied if 100+ are ordered; 20% discounts will be applied if 1000+ are ordered if customer orders 50 units of product c, it’s $50; if customer orders 150, then it’s 150 0 9 = $135; if customer orders 1500, then it’s 1500 0 8 = $1200 to achieve this, we create a discount tag as the following discount tag tier type uom dimension volume quantity discount tiers tier # price model starting unit ending unit amount discount percentage 1 per unit 0 100 n/a 0% 2 per unit 100 1000 n/a 10% 3 per unit 1000 n/a 20% scenario #4 volume amount discounting for product d, the original price is $1 for 100+ units ordered, there will be a $25 discount; for 1000+ units ordered, there will be a $300 discount if a customer orders 50 units, then it’s $50; if a customer orders 150 units, then its $150 $25 = $125 if a customer orders 1500 units, then its $1500 $300 = $1200 to achieve this, we create a discount tag as the following discount tag tier type uom dimension volume quantity discount tiers tier # price model starting unit ending unit amount discount percentage 1 flat fee 0 100 0 n/a 2 flat fee 100 1000 25 n/a 3 flat fee 1000 300 n/a scenario #5 term based discounting for a recurring product e, we price it for $25 user/month the default subscription is 12 months if a customer signs a 2 year subscription contract, then they receive 5% discount on the second year; if a customer signs a 3 year subscription contract, then they receive a 10% discount on the 3rd year moreover, if a customer subscribes to over 100 users, they will receive 10% overall discounts; if a customer subscribes to over 200 users, they will receive 20% overall discounts for example, if a customer subscribes to 150 users for 2 years, then their order total is original price total $25 150 24 = $90,000 term discounts $25 150 12 0 05 = $2250 (only the second year has 5% term discounts) quantity discounts 90000 10% = 9000 order total = 90000 2250 9000 = $78,750 to achieve this, we’ll need to create 2 price tags a quantity based discount tag, and a term based discount tag both discount tags need to be applied to the product at design time discount tag #1 quantity based discount tag tier type uom dimension volume quantity discount tiers tier # price model starting unit ending unit amount discount percentage 1 per unit 0 100 n/a 0 2 per unit 100 200 n/a 10 3 per unit 200 n/a 20 discount tag #2 term based discount tag tier type uom dimension tiered term discount tiers tier # price model starting term starting term dimension ending term ending term dimension amount discount percentage 1 per unit 0 month 12 month n/a 0 2 per unit 12 month 24 month n/a 5 3 per unit 24 month 36 month n/a 10 scenario #6 ramp pricing for a recurring product f, we price it for $1200 user/year optionally, customers can sign up for a 2 year or 3 year contract customers receive 10% off first the first year, but for each subsequent year, they receive 5% price increase over the previous year's price for example, if a customer subscribes to 10 users for 3 years, we will have pricing for the first year per unit $1200 discount for the first year 10% off the original price discounted price for the first year $1200 (10% $1200) = $1200 $120 = $1080 to calculate the subsequent years' prices, we need to apply a 5% price increase over the previous year's price second year per unit price $1080 + (5% $1080) = $1080 + $54 = $1134 third year per unit price $1134 + (5% $1134) = $1134 + $56 70 = $1190 70 if a customer signs up for 10 user licenses, we can calculate the acv and tcv for all three years tcv \= acv (year 1) + acv (year 2) + acv (year 3) \= ($1080 10) + ($1134 10) + ($11,907) \= $10,800 + $11,340 + $11,907 = $34,047 to achieve this, we'll create a term based discount tag as follows discount tag tier type uom dimension ramp term discount tiers please note that starting and ending unit are measured in year a negative discount percentage indicates a price increase tier # price model starting term starting term dimensions ending term ending term dimensions amount discount percentage 1 per unit 0 years 1 years n/a 10 2 per unit 1 years 2 years n/a 5 3 per unit 2 years 3 years n/a 5 scenario #7 grandfathered pricing this feature is available in release 2502 customers aim to encourage users to purchase more units/longer terms upfront by allowing them to "lock in their price" based on the original tier in a tiered price or discount tag this ensures that the pricing tier applied at the time of purchase remains consistent for any change orders, rather than adjusting tiers based on updated quantities or subscription terms this flexibility can be applied on a per subscription basis based on the tag applied to the line scenario grandfather pricing with price tags our frictional saas company, vroom inc , offers tiered pricing based on the number of users 1 10 users $10 per user/month 11 50 users $8 per user/month 51+ users $6 per user/month grandfathered pricing in action in january 2024, smart revenue inc purchases a 30 user plan, qualifying them for the $8 per user/month tier vroom later updates its pricing in july 2024, raising the 11 50 user tier to $9 per user/month in august 2024, smart revenue adds 10 more users, bringing their total to 40 users without grandfathered pricing smart revenue would now be subject to the updated pricing, and their entire 40 users would be billed at the new rate of $9 per user/month with grandfathered pricing because their original pricing was “locked in,” their additional 10 users remain at the original $8 per user/month rate instead of moving to the new higher rate scenario grandfather pricing with discount tags in another scenario, vroom inc offers volume based discounts for their cloud storage product through a discount tag that locks in special rates based on the original purchase quantity pricing structure (before grandfathering) 1 10 tb → no discount ($100 per tb/month) 11 50 tb → 10% discount ($90 per tb/month) 51+ tb → 20% discount ($80 per tb/month) smart revenue purchases a cloud storage subscription with 55tb on march 1st 2024 for 12 months later in july 2024, vroom updates its pricing tiers that only offers 10% for the 51+ tb tier without grandfathered pricing (standard approach) if smart revenue renews with 10 additional tb (total 65 tb), they would now be subject to the revised 10% discount ($90 per tb/month) instead of their locked in 20% discount this results in higher costs per tb despite increasing their storage with grandfathered pricing & discount tag applied their original 20% discount remains in effect, even with the renewal and quantity update instead of paying the new 10% discount rate, they continue paying $80 per tb/month for all 65 tb (even though new customers would only get a 5% discount) the benefit here is that smart revenue is encouraged to expand their storage usage, knowing they are protected from price hikes in the future the company vroom also returns a long term customer by maintaining predicable pricing, ensuring customer loyalty if prices drop after the initial subscription, customers grandfathered into the original pricing tiers may prefer to switch to the lower rates companies can accommodate this by removing the grandfathered pricing, effectively applying the latest pricing structure how it works grandfather tier in the line editor, sales users can click on the 'price tag' icon of a line item to view the price or discount tags applied to it to grandfather in the price tiers currently applied to the line item, sales users can click on the 'grandfather tier' action icon upon clicking this icon, a custom price tag or discount tag will be created specifically for the current line item, removing any unapplied tiers and setting the current tier with an infinite end unit this ensures that the current price tier is locked in, so all future subscription changes, such as renewals and quantity updates, will continue to use the locked in tiered price if a price or discount tag is applied to both a parent line item and its child line items, users will be prompted with an option to propagate the custom price tag when a grandfathered tier price tag is created if users choose to propagate, all recurring child line items will automatically inherit the same custom price tag with grandfathered tiers as the parent users can grandfather tiers for all types of prices tags and discount tags, including term based tags once the grandfather tiers are applied, the action button changes to 'use original tiers,' which allows sales users the option to revert back to the original tiers of the price tag change orders & usage rating when the quote or order is saved, the custom price tag containing the grandfathered tiers is saved with the quote line item once subscriptions are created from the quote or order, this custom price tag will be used for any subscription changes, such as renewals with quantity updates in the change order, the grandfathered tiers will be used to calculate the prices if the customer or the sales representative wants to revert to the system provided, latest price tag tiers, they can click 'use original tiers,' and the original price tag (which may now include the latest tiered pricing) will be used for the calculations additionally, if the subscription is a usage subscription, the custom price tag containing the grandfathered tiers will be used to rate the usage at rating time the following video provides a tutorial that guides you through implementing this scenario using grandfathered tiers