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TeamCollaboration Tutorial: Use Advanced Charge Models

Zuora

TeamCollaboration Tutorial: Use Advanced Charge Models

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This portion of the TeamCollaboration tutorials walks you through scenarios for customizing the rate plan charges in your product catalog.

The exercises will take approximately 10 minutes to complete.

Scenario

Now that TeamCollaboration is able to sell multiple product editions, each having multiple rate plans and charges, the company wants to fine tune its products and pricing model. Some things that TeamCollaboration would now like to do are:

  1. Add an additional annual phone-based support fee to its Premium edition product
  2. Experiment with volume-based pricing in its Premium edition product
  3. Offer a 3-month discount for new subscribers to its monthly plan on its Enterprise edition product
  4. Introduce tiered pricing into its Premium edition product.

In this section of the tutorial, we will show you how to accomplish these objectives in Zuora.

Exercise 1: Add a Second Recurring Charge to a Rate Plan

TeamCollaboration offers phone-based support to customers of its Premium and Enterprise editions. Basic edition customers only receive email support. However, an increase in customers has increased support calls. TeamCollabotration realizes that phone-based support is not adequately price into its Premium product.

Objective: To add a second recurring charge to this rate plan. An annual fee of $25 will be charged to all new subscribers of the Premium edition. While the the existing recurring charge is incurred monthly, the second charge is defined for an annual recurrence.

  1. Navigate to  Products > Product Catalog in the left-hand navigation section.

  2. Click the TeamCollab Premium product.

  3. Click + add new in the Recurring Charges / Period column to add a second recurring charge to the Premium Monthly rate plan.

  4. Complete the following required fields and leave the other optional fields empty for this exercise:
    • Charge Name: Phone Support
    • Charge Model: Flat Fee Pricing
    • List Price: 25 USD / Billing Period
    • Trigger Condition: Upon Contract Effective
    • End Date: Align to Subscription End Date
    • Billing Period: Annual
    • Billing Day: Default from Customer Account
    • Billing Period Alignment: Align to Charge
  5. Click save.

TeamCollab has added a second recurring charge to this rate plan. While its customers incur the first recurring charge each month, Zuora allows for the second charge to be defined on an annual recurrence.

Exercise 2: Offer Volume-Based Pricing

TeamCollaboration has historically allowed customers to deploy its software to an unlimited number of users for the same price. Now, it suspects that revenue can be maximized by changing to per unit pricing with volume discounts.

Objective: To offer volume pricing for the monthly plan of the Premium edition product.

  1. Navigate to  Products > Product Catalog in the left-hand navigation section.

  2. Click the TeamCollab Premium product.

  3. In the Premium Monthly rate plan section, hover over the Monthly Fee charge and click Edit.
  4. Update the following fields:
    • Charge Model: Volume Pricing
    • UOM: Seat
    • List Price /: Billing Period
      This is the list price base for the charges.
    • Price Table
      • Enter the following in the first row.
        • From: 1
        • To: 5
        • List Price: 9.99
        • Price Format: Per Unit
      • Click the new tier icon on the far right of the first row, and enter the following in the second row that appears.
        • From: 6
        • To: (leave blank)
        • List Price: 7.99
        • Price Format: Per Unit
  5. Click save.

TeamCollab has changed the recurring pricing model for this product. Now, instead of charging a flat $29.99 per month to all subscribers, it charges a per-unit monthly fee of:

  • $9.99/user/month for subscribers with 5 users or less
  • $7.99/user/month for subscribers with 6 users or more

Exercise 3: Offer Discount Pricing

To drive more sales of its Enterprise edition, TeamCollaboration is considering a new promotion that provides a discount to new customers. All new Enterprise edition subscribers to the Monthly plan will receive a 75% discount on the recurring charge for the first 3 months.

Objective: To set up a discount charge model for new customers of the Enterprise monthly plan.

First, enable the Discount charge model in your tenant:

  1. Click your username at the top right and navigate to Settings > Billing.

  2. Click Enable Charge Types / Models.

  3. Select Discount-Percentage.

Second, create a discount charge:

  1. Navigate to  Products > Product Catalog in the left-hand navigation section..

  2. Click the TeamCollab Enterprise product.

  3. In the Enterprise Monthly rate plan section, and click + add new in the Recurring Charges / Period column.
  4. Complete the following fields:
    • Charge Name: 3-Month Discount
    • Charge Model: Discount-Percentage
    • Discount Percentage: 75
    • Level: RatePlan
    • Trigger Condition: Upon Contract Effective
    • End Date: Fixed Period after the Charge is triggered, 3, Months
    • Billing Period: Month
    • Billing Day: Default from Customer Account
    • Apply Discount To: Only select Recurring
  5. Click save.

TeamCollab has added the ability to offer a 3-month discount to new subscribers of this product rate plan.

Exercise 4: Offer Tiered Pricing

After some time, TeamCollaboration learns that offering volume-based pricing on its Premium edition has indeed grown revenues, but there may be an opportunity to do better. A large number of subscribers to this edition are only signing up for 1 or 2 seats. TeamCollaboration feels that it can accomplish dual goals of driving more application usage and increasing revenues if it uses a tiered pricing model, where a flat fee of $35/month is charged for up to 5 users and then each additional user costs $7.99/month.

Objective: To create a tiered pricing model that charges a flat fee for each seat until a minimum threshold is met and then switches to a per unit fee for additional seats.

  1. Navigate to  Products > Product Catalog in the left-hand navigation section.

  2. Click the TeamCollab Premium product.

  3. In the Premium Monthly rate plan section, hover over the Monthly Fee charge and click Edit.
  4. Update the following fields:
    • Charge Model: Tiered Pricing
    • UOM: Seat
    • List Price /: Billing Period
      This is the list price base for the charges.
    • Price Table
      • Enter the following in the first row:
        • From: 1
        • To: 5
        • List Price: 35
        • Price Format: Flat Fee
      • Click the new tier icon on the far right of the first row, and enter the following in the second row that appears.
        • From: 6
        • To: (leave blank)
        • List Price: 7.99
        • Price Format: Per Unit
  5. Click save.

TeamCollab has changed the pricing model for this product to one that should both increase its revenue and drive more customer usage of its product.

What's Next?

Learn: Customer Accounts