RLM Thought Leadership: Pricing Management

Comparing Salesforce CPQ and RLM Pricing Mechanisms

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Salesforce offers two powerful tools for managing a business’s revenue motions: Salesforce CPQ (Configure, Price, Quote) and Revenue Lifecycle Management (RLM). While both aim to streamline quoting & transaction management processes, their functionalities show both commonalities and distinct differences. This blog is meant to capture some of the key differences in the offerings.

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CPQ Price Rules vs RLM Pricing Procedure:

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CPQ Price Rules allow users to define pricing logic based on a variety of factors such as products added, quantity, attributes, or custom logic. These rules enable precise control over pricing calculations, ensuring accuracy and consistency throughout the quoting process. This record data driven mechanism fires within the defined calculation sequence at four separate events which can be leveraged for dynamic pricing use cases. Where CPQ’s Price Rules meet limitations, custom Apex within the Quote Calculator Plugin (QCP) allows appropriate solution extension for the most complex pricing models.

RLM's Pricing Procedures and subsequent Pricing Elements provide a robust framework for managing pricing strategies throughout the revenue lifecycle. This framework facilitates the implementation of advanced and adaptable pricing models at both the Quote and Order stages, even in scenarios where the conventional CPQ Price Rules only apply to the Quote object. Moreover, RLM’s Pricing Procedures Interface offers a convenient way to preview pricing mechanisms in real-time using the "Simulate" feature. This eliminates the need to generate mock data outside of the interface to initiate the pricing QA process, thus reducing the overall time to production. The Pricing Procedure also offers flexibility in determining the timing of pricing actions, while featuring a user-friendly point-and-click interface for easy management and maintenance by the pricing strategy team, ensuring responsiveness to market dynamics.

CPQ Rounding vs RLM Rounding Rules:

Managing rounding issues within Salesforce CPQ can be challenging due to its nature as a managed package and its reliance on proration multipliers, which are limited to one per instance. These constraints can lead to difficulties in accommodating various rounding requirements that businesses may have. 

In contrast, Salesforce RLM offers rounding rules that provide greater flexibility to meet the diverse rounding needs of businesses. With RLM, organizations can implement specific rounding methodologies tailored to their unique pricing strategies and customer preferences. This capability not only enhances accuracy in pricing calculations but also removes the need for complex customization & begins to streamline the process of addressing rounding discrepancies.

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CPQ Static Waterfall vs RLM Dynamic Pricing Procedure & Hover over Waterfall:

The CPQ Pricing Waterfall, as a standard layered pricing mechanism, serves ultimately to determine the final price. Although it effectively handles various multi-level discounting and pricing scenarios, it lacks sequence customization & flexibility. Consequently, users frequently encounter confusion regarding the order of prices and discounts, along with a lack of guidance within the user interface regarding how the final price is calculated.

In contrast, RLM's Pricing Procedure functionality offers a more agile approach by placing pricing calculation sequencing in the hands of the business users. RLM’s Pricing Procedure allows for businesses to control which pricing tiers come first, how many there are, and the chronological approach amidst an enhanced user experience with a popup available through the transaction cycle. In addition to the flexibility, RLM’s waterfall is shown at the time of transacting so as to empower sellers to know exactly how their final price was calculated.

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CPQ Custom Solution for Promotion/Discount Management vs RLM Calendar Discounts:

At present, CPQ lacks pre-built features for handling promotion management or calendar-based discount management. Consequently, there's a need for tailored solutions to manage promotions and discounts, which often lead to increased technical debt. While CPQ offers the flexibility within its mechanisms, it's imperative to strategically and systematically implement custom solutions to prevent long term issues.

In contrast, RLM introduces Calendar Discounts, a feature that automates the scheduling and application of discounts based on predefined calendar events. This streamlines promotional activities by eliminating the need for manual intervention, ensuring timely and consistent application of discounts throughout the revenue lifecycle.

In summary, while both Salesforce CPQ and RLM offer robust pricing mechanisms, they cater to different needs and use cases. CPQ excels with consolidated pricing processes for quoting and sales operations, while RLM provides a more comprehensive & robust solution for managing pricing strategies across the entire revenue lifecycle. Depending on the complexity of pricing requirements and the desired level of automation, businesses can choose the solution that best aligns with their objectives and operational workflows.