Pricing Management
Summarize
Summary of Pricing Management
The Pricing Management application within ServiceNow enables organizations to establish, manage, and optimize pricing strategies for Sales Customer Relationship Management (CRM) solutions. It ensures your sales team can quickly generate leads, opportunities, quotes, and orders with accurate and competitive pricing. Pricing Management is foundational to maximizing profitability while aligning with customer expectations.
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Key Features
- Pricing Plans: Control how pricing adjustments and calculations like list prices and discounts are applied. Organizations can use the default plan or customize multiple plans but only one active plan per domain.
- Price Lists: Define product and service prices. Multiple price lists can be created based on currency or customer accounts, allowing tailored pricing such as account-specific defaults for personalized quotes and orders.
- Pricing Methods: Support for one-time fees or recurring fees (monthly/annual) linked to product offerings and reflected in price lists.
- Sales Agreement Price Lists: Automatically generated from completed quotes in sales agreements, reflecting final unit prices and maintaining product offer hierarchies. Used in subsequent orders within the agreement timeframe.
- Cost Books: Define unit costs for product offerings, enabling sales agents to assess profitability by comparing costs and quoted prices. Cost books can be copied and updated for flexible cost management.
- Price Adjustments: Apply markdowns, markups, or overrides based on product attributes (e.g., model, color), non-product attributes (e.g., region, sales channel), or bundled product components, allowing granular pricing control.
- Pricing Matrices: Use decision rules for complex adjustments and default selections of price lists or cost books. Includes matrices for default price list, cost book, standard price adjustments, and bundled product configuration adjustments.
- Matrix Validations: Validate pricing rules with system-defined or custom validation rules to ensure data integrity in decision tables.
- Revenue Metrics for Subscription Pricing: Automatically calculate subscription-related revenue on opportunities and quotes to support forecasting and sales performance tracking.
- Pricing Extensions: Integration points allow customization of the pricing engine, such as altering default price list or cost book selection, sourcing pricing and cost data externally, and extending pricing adjustment logic to fit unique business needs.
What This Enables for ServiceNow Customers
By leveraging Pricing Management, your organization can implement sophisticated, flexible pricing strategies that accommodate diverse product offerings, customer-specific pricing, and dynamic sales scenarios. It supports accurate quote and order pricing, profitability analysis, and subscription revenue forecasting. Additionally, the extensibility of the pricing engine allows you to integrate external pricing data and customize pricing workflows to align with your unique business processes.
Overall, Pricing Management helps streamline sales operations, improve pricing accuracy, and enhance profitability while maintaining compliance with your pricing policies and customer agreements.
The Pricing Management application enables your organization to set, manage, and optimize pricing strategies for any Sales Customer Relationship Management solution. These pricing strategies enable your sales team to generate leads, opportunities, quotes, and orders with accurate and competitive pricing quickly.
Pricing plans
A pricing plan is a sequence of steps that control how pricing adjustments and calculations, such as the list price and discounts, are applied to price lines. You can have multiple pricing plans for your organization, but only one active plan for each domain.
Pricing Management provides a default pricing plan with predefined steps. You can use the default pricing plan, or you can customize the default plan by copying it and adding steps or changing certain steps as needed. To learn more about customizing a pricing plan, see Configurable pricing plans.
Price lists
Price lists define the prices for products and services offered by your organization. Your agents use price lists to find product pricing quickly when creating quotes and capturing orders. Your pricing admins or managers create price lists and add price list lines that define the list price for each of your product offerings. They can also copy a published price list and its price list lines and use the copy to update the pricing or reuse the price list without having to create a new price list.
- Support for multiple price lists
- Pricing Management supports multiple price lists, such as price lists based on currency or customer account. The initial, default price list that you create is based on the currency used, but you can change
the default price list used by your agents. For example, you can create account-based price lists that are tailored to the needs and preferences of a specific customer or provide pre-negotiated prices for them. You can set an
account-based price list as the default, which is then used by your agents when they create quotes or orders for that particular customer.
Figure 1. Example of account-based price list - Pricing methods
- The pricing method is either a one-time fee or a recurring pricing fee with monthly and annual frequencies. The pricing method is set in product offerings and is displayed in price list lines.
For details on setting up and managing price list features, see Configuring product pricing.
Sales Agreement price lists
If you're using the Sales Agreement feature, a published sales agreement price list is generated automatically when a sales agent creates a sales agreement from a completed quote. The sales agreement price list reflects the final unit price for each product that is captured as part of the sales agreement. The sales agreement price list is valid for the start and end dates specified for the agreement. To learn more about sales agreements, see Sales Agreement Management.
When a quote is created for a sales agreement workflow, the sales agreement price list created is also used for orders generated from the sale agreement. The price list lines that are created maintain the offer hierarchy (parent offer and any child offers) captured in the quote and sales agreement. The price list lines have a reference to the parent product offer and the root product offer, for tracing the offer hierarchy. In addition, the unit net price in a sales agreement line is used as the list price in the associated price list line. The effectivity dates for price list lines are based on the start and end dates of the corresponding sales agreement line item.
Cost books
Cost books define the unit cost for product offerings. This information is used in the Quote Management application to provide sales agents with the unit cost, unit margin amount, and unit margin percentage for products in quotes. With this information, your sales agents can perform a simple profitability analysis by subtracting the cost of the product offer from the quoted selling price.
Your pricing admins or managers create a cost book and add a cost book line to set the unit cost for each product offering. They can also copy a published cost book and its cost book lines to revise costs in the cost book (update the copy) or reuse a cost book without having to create a new one. For details on setting up cost books and cost book lines, see Create and publish a cost book and Create a cost book line. For information on activating the cost book and cost margin features in Quote Management, see Install and configure Quote Management.
Price adjustments
- Product attributes: Define a price adjustment based on product characteristics, such as model or color. For more information, see Create and publish a product attribute-based pricing adjustment.
- Non-product attributes: Create a price adjustment based on characteristics that aren’t related to a product, such as shipping information or sales channel. For example, you can create a pricing adjustment for customers in a particular region. For details, see Create a non-product attribute pricing adjustment.
- Bundled products: Create price adjustments for product offerings in a bundled product. For example, you might want to specify a markdown amount for certain product offerings in the bundle, because the bundle provides discounted pricing. For more information, see Create pricing adjustments for bundled products.
Pricing matrices
- Price List Defaulting: Select the default price list to be used, such as the standard price list or an account-specific price list. For more information on configuring this price list matrix, see Control the default price list on transaction header or header line.
- Cost Book Defaulting: Select the default cost book to be used, for example the standard cost book or an account-specific cost book. To learn more about configuring this matrix, see Control the default cost book on transaction header or header line.
- Standard Price Adjustment: Apply an adjustment based on context variables that represent non-product attributes, such as shipping location or account. Pricing Management provides certain system-defined, non-product context variables that you can use in this matrix, but you can also create your own custom variables, for example, market segment. Your pricing administrator can work with your administrator to develop custom context variables that can be used in pricing matrixes. For details on configuring these adjustments, see Create a non-product attribute pricing adjustment. For more information on configuring custom context variables, see Create a custom context variable and Map a custom context variable to a transaction entity.
- Configuration Component Price Adjustment: Adjust the price of a product when it's sold as part of a product bundle. For details, see Create pricing adjustments for bundled products.
Matrix validations
As an admin, you can use system-defined validations or set your own validations to validate rows entered into the decision tables for pricing and product eligibility rule matrices. For more information on these validations, see Configuring matrix validation rules.
Revenue metrics for subscription pricing
In the Opportunity and Quote Management applications, certain subscription-related revenue amounts are automatically calculated when your agents add products to opportunities and quotes. Agents and sales managers can use this information to forecast subscription revenue and track sales performance. For details on these metrics, see Subscription revenue metrics.
Pricing extensions
- Select Price List (DefaultPriceListExtensionPoint): Change the selection logic for using the default price list on a quote or order header.
- Select Cost Book (DefaultCostBookExtensionPoint): Change the selection logic for using the default cost book on a quote header.
- Get Product List Price (ListPriceExtensionPoint): Get pricing directly from another data source or extend the current price list derivation.
- Apply Attribute Adjustments (AttributeAdjustmentExtensionPoint): Get attribute adjustments from another data source, such as product manufacturers, or extend the current adjustment derivation logic.
- Get Cost (CostExtensionPoint): Get the unit cost for a product offering directly from another data source or extend the current cost book derivation logic.
- Apply Pricing Adjustments (PricingAdjustmentsExtensionPoint): Get pricing adjustments for a product offering from another data source, or extend the pricing engine logic by not relying on the Standard Adjustment and Component Configuration Rule Matrices to get the adjustment values.