05, Jun, 2024 | By Mahesh Siddireddy

What are the Types of Products in Salesforce CPQ?

• Salesforce CPQ, previously known as Steelbrick, is a Configure, Price, Quote (CPQ) software that allows the creation of quotes based on client requirements. CPQ stands for configure, price, and quote. Salesforce CPQ is a software solution that helps businesses automate and streamline their Quoting and Sales processes. It enables sales teams to quickly and accurately generate customer quotes, proposals, and contracts. Sales teams need to manage the prices of the products rapidly according to the business requirements. 
• In the previous blog, we have discussed ‘What is a PriceBook?’. A price book in Salesforce is a list of products and their associated prices. Each product and its price is called a price book entry. Salesforce provides standard and custom price books. You can create multiple price books to maintain different prices for the same product based on your business needs.
   

  What are the Types of Products in Salesforce CPQ?
  Salesforce CPQ (Configure, Price, Quote) offers various product types that enable businesses to create dynamic and customizable offerings, apply pricing rules, manage complex product configurations, and streamline the quoting and sales process.Here’s an overview of the main product types in Salesforce CPQ:
  

  1. Subscription Product
  2. Non-Subscription or One-Time Product
  3. Bundle Product
  4. Multi-Dimensional Quoting (MDQ) Product
  5. Usage Based Product
  6. Perpetual Product
     

1. Subscription Product:
What is a Subscription Product in Salesforce CPQ?
A subscription product is a product that has some recurring payment element to it, whether it be a monthly payment, or an annual subscription.
Contracting these products becomes a Subscription associated with the Contract and renewals can be generated.
Example: Netflix or Amazon Prime. Or buying a cell phone subscription for a month.

2. Non-Subscription/ One-Time Product:
What is a Non-Subscription Product or One-Time Product in Salesforce CPQ?
These products are purchased and billed only once, with no recurring charges or renewals involved.Upon converting these products convert to asset options chosen in the Asset Conversion Field ( One per unit, one per quote line, or None)
Example: Purchase Pizza and a laptop Bag. Or buying a product only once without any recurring charges.

3. Bundle Product:
What is a Bundle Product in Salesforce CPQ?
Bundle Products are groups of products sold together that can be selected by the salesperson or customer while creating a price quote. CPQ bundles enable customers to purchase multiple items at once and help businesses to sell related items together, providing added value.
Example: A SmartPhone can be a bundle with a charger and an Earphones/ Headset as its components. Color and memory can be the options to choose from.

4. Multi-Dimensional Quoting (MDQ) Product:
What is an MDQ Product or Multi-Dimensional Quoting Product in Salesforce CPQ?
In Salesforce CPQ (Configure, Price, Quote), MDQ stands for “Multi-Dimensional Quoting.” MDQ products allow for the configuration and pricing of products with varying dimensions over time, such as different billing periods or usage metrics. This feature is handy for products that break down pricing into segments based on time periods or other dimensions if needed.
Example:  A data plan might charge $10 per GB for the first 100 GB, $8 per GB for the next 100 GB, and $6 per GB beyond that. Each tier can be treated as a different segment.

5. Usage Based Product:
What is a Usage-Based Product in Salesforce CPQ?
Usage-based pricing allows you to configure products such that their prices are determined based on how much of the product or service is consumed. The price of the products will be based on the predefined rates for future consumption of the product.  This is particularly useful for utilities, telecommunications, cloud services, and other industries where consumption can vary significantly.
Example: Telecommunications Postpaid Plans.

6. Perpetual Product:
What is a Perpetual Product in Salesforce CPQ?
These products are EMI-based or One-time contract-based, once the contract or EMI’s over these become Assets.​ Price is not prorated
The major difference is perpetual product can become one-time or several payments can become Asset at last. Perpetual products are part of Non-subscription which we can say.

Salesforce CPQ offers a versatile range of product types designed to meet the diverse needs of businesses and their customers. Understanding these product types and their applications allows businesses to create dynamic, customizable offerings that align with market demands and customer preferences, ultimately leading to more efficient sales cycles and improved business outcomes.