Posted by: Matthieu Hattab | June 24, 2009

Siebel Pricing: Volume Discount


Volume Discount

Volume Discount is probably the easier discount to understand and to implement.The idea is to give a discount if you buy more of the same product. Example:

  • If you buy 4 products ABC, you get 3%
  • If you buy 5 products ABC, you get 3.5%
  • If you buy more than 6 products ABC, you get 4%

You add product ABC to the Quote/Order, you update the Qty field to a value of 4 or greater and you will see your volume discount applied.

Now, there is something the bookshelf very vaguely mentions (see “Volume Discounts Across Line Items): the Volume Discount only works per Line Item in the Quote/Order. Not per product!!!

Example:

You add product ABC to your quote and specify a qty of 2.

Then you add product ABC again to your quote (maybe with a different size/color) and specify a qty of 3.

Your quote now contains 5 products ABC.

Common sense will tell you that you should get 3% discount since you’re buying 5 of the same product (Pricing Engine works with Product Row Id). But the Pricing Engine will evaluate the Volume Discount rule line item after line item. Therefore, you won’t get the discount at all.

If you want the pricing engine to consider all shirts in the quote before calculating the volume discount, you have to implement it in the Pricing workflows. This will be discussed in section: Aggregate Volume Discount.

Note: I will not discuss the differences between Simple and Tier volume discount as this is a no-brainer and the bookshelf is crystal-clear on this.

Finally, the Volume Discount must be linked to each individual product that qualifies for this discount. This is done in the Price List Line Item.

Alternatively, you can also link the Volume Discount to a Discount Matrix, although be careful with this option, make sure the Start/End Dates of the Discount Matrix and the Volume Discount are consistent. Also the Price Waterfall will not be able to show calculations of the Volume Discount, only its result (see my upcoming chapter on this wonderful Waterfall)

How will I know that a volume discount is available for a product?

It is important that your customers know that you are offering such a discount. Knowing that such a discount exist could lead to higher sales volumes.

Unfornately, the only way to know that such a discount exists is to first add a product to the quote and then look in the Discount Negociation Form Applet (Quote Screen > Pricing > Discount Negociation). Similar view exists in Orders and you can always expose these fields to other applets)

In this applet, you will see 3 fields:

  • Current Volume Discount
  • Next Volume Discount
  • Upsell

The first 2 fields are self-explanatory. The Upsell field shows a message that you can customize with Siebel UMS. The message could be: Buy 2 more and get 3% Discount.

The “2” and the “3%” are dynamically generated, depending on the current qty of the product in the Quote/Order.

If you increase your quantity by 2 to get these 3% you may get a new message:

Buy 1 more and get 3.5% Discount.

Etc… until you’ve reached the highest possible Volume Discount segment as per your volume discount rule. At that point the Upsell field would be empty.

I’d like to add one recommendation here: I believe it is important that the existence of a Volume Discount must also be shown in the Product Catalog. Again, the idea is to convince the customer to buy your products. If you sell realms of paper, you get a better chance to sell them if you inform the customer of volume discount while he/she browses the Catalog.

To achieve this you have 2 options:

Option 1:

Expose the volume discount name in the Catalog Applet (there are 2 Catalog Applet to update). But this is not enough. You should also take into account that volume discount have Start and End dates:

  • Create fields in the underlying Catalog BC (again there is 2 to update) to get those dates,
  • Use a calc field that will show the Volume Discount name depending of whether it is active or not
  • Expose this field in the 2 Catalog Applets.

Option 2:

If you want to go a little step further, you can also expose the Next Volume Discount and Upsell (so you can benefit from the Siebel UMS). This is possible since those fields are populated in the Buscomp by the Pricing PSP procedure)

But you need to be comfortable with the Siebel PSP architecture before you can play with this. My opinion is that from a Sales/Marketing point of view, showing the Volume Discount name is already a nice added value; showing more info doesn’t justify the extra man-days implied (unless your Product Catalog is segmented by language or geographical regions).

Note: If your Volume Discount is part of a Discount Matrix you will not be able to recommend it to the customer.

Next article: Aggregate Volume Discount

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Responses

  1. Hmm is anyone else encountering problems with the pictures
    on this blog loading? I’m trying to determine
    iff its a problm on my end or if it’s the blog.
    Any responses would be greatly appreciated.

  2. Do you have a Twitter account that we could become followers of?

    And where could we read more related articles that you
    submitted in the past?

  3. […] Next article: Siebel Pricing: Volume Discount […]

  4. let me know how to fix the price water fall issue fix.. highly expecting ur reply

  5. Siebel bug – Volume discount doesn’t work if we do the ungroup of line items.

    • Hi pankaj,

      can you clarify your scenario:
      I’d like to know:
      what are the line item and product quantity before and after the ungroup.

      Thanks


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