By Optimizing Discount Allocation with Salesforce Revenue Cloud’s Discount Distribution Service (DDS)
In today’s competitive business environment, offering discounts is a powerful strategy to win customers and close deals. However, applying a discount at the quote level, instead of individually on each line item, can create pricing inconsistencies, lead to manual errors, and cause difficulties in maintaining compliance with pricing policies. To address these challenges, Salesforce Revenue Cloud’s Discount Distribution Service (DDS) ensures that discounts are allocated consistently and fairly across all quote lines.
Industry-Specific Use Case: Manufacturing
Consider a manufacturing company that sells complex machinery along with installation services and extended warranties. The company wants to offer a total discount of $1,500 across the following items:
- Product A (Machinery): $10,000
- Product B (Installation Service): $2,000
- Product C (Warranty): $500
Without a structured discount allocation system, applying the $1,500 discount manually could lead to discrepancies. For example, applying the same discount across all items equally could result in one item being overly discounted, while others are not sufficiently discounted.
Using DDS, the company can automatically apply the discount either equally or proportionally, depending on the company’s needs. This ensures the discount is allocated fairly across all items.
Example with Proportional Distribution:
Total Price of All Items:
$10,000 (Product A) + $2,000 (Product B) + $500 (Product C) = $12,500
Proportional Distribution Calculation:
- Product A: 80% of total price ($10,000 ÷ $12,500)
- Product B: 16% of total price ($2,000 ÷ $12,500)
- Product C: 4% of total price ($500 ÷ $12,500)
Applying the $1,500 discount proportionally:
- Product A: 80% of $1,500 = $1,200
- Product B: 16% of $1,500 = $240
- Product C: 4% of $1,500 = $60
Thus, the final prices after applying the discount would be:
- Product A (Machinery): $10,000 – $1,200 = $8,800
- Product B (Installation Service): $2,000 – $240 = $1,760
- Product C (Warranty): $500 – $60 = $440
This approach ensures fairness and transparency in discount allocation, and it is fully automated with Salesforce Revenue Cloud’s DDS.
Salesforce CPQ
While Salesforce Revenue Cloud’s DDS streamlines and automates the discount distribution process, Salesforce CPQ do not handle this process out-of-the-box in the same way. Let’s compare how these platforms approach discounting:
Salesforce CPQ:
In Salesforce CPQ, businesses often use the Target Price feature to calculate the total discount needed to meet a target quote amount. However, Salesforce CPQ does not provide flexibility in how the discount is distributed. Once the Target Amount distribution is applied, the discount is always distributed proportionally across all quote lines.
Limitations in Salesforce CPQ:
- Proportional Discounting Only: Salesforce CPQ only supports proportional discount distribution. This means that the discount is applied based on the price of each line item. Larger, higher-priced items receive a larger discount, while smaller items receive a smaller discount. There is no option to apply an equal discount across all line items.
- All Quote Lines Are Eligible: In Salesforce CPQ, once a Target Amount discount is applied, all quote lines are automatically considered eligible for discounting. There is no ability to select specific lines or exclude any line item from receiving the discount. Every line in the quote receives its proportional share of the total discount.
For businesses that need the ability to either apply equal discounts across all line items or choose specific line items for discount exclusion, Salesforce CPQ lacks the necessary flexibility.
How Revenue Cloud Advanced (RCA) Solves This
In Salesforce Revenue Cloud, the Discount Distribution Service (DDS) is designed to handle all the discounting challenges discussed above out-of-the-box (OOB). Whether using Proportional Distribution or Equal Distribution, DDS ensures that discounts are applied automatically to all eligible line items, reducing manual effort and ensuring accuracy.
With RCA (Revenue Cloud Advanced), businesses get the benefit of these advanced features, seamlessly integrating them into their pricing procedures. DDS automates the discount allocation process and ensures compliance with pricing policies, eliminating the need for complex customizations.
Step-by-Step DDS Implementation in Salesforce Revenue Cloud
Prerequisite
1.Set Up Required Fields: Create the necessary fields in Quote and Quote Line Item objects. These fields will be referenced in the DDS element within the Pricing Procedure and mapped through Context Definition Mapping.
| Field Name | Object | Type | Description |
| Discount Type | Quote | Picklist | Values: Amount, Percentage, Override. Specifies the discount type. |
| Distribution Logic | Quote | Picklist | Values: Equal, Proportionate. Defines the distribution method for the discount. |
| Distribution Type | Quote | Picklist | Values: NetUnitPrice, ItemNetTotalPrice. Basis for discount application. |
| Discount Value | Quote | Number | The discount amount, percentage, or target amount. |
| Total Remainder Amount | Quote | Currency | Stores unapplied discount amount. |
| Minimum Net Unit Price | Quote Line Item | Currency | Defines the minimum price below which no discount will be applied. |
2.Context Definition Mapping:
- Navigate to Setup → Context Definitions.Open your extended Sales Transaction Context .Map each field to its corresponding attribute in the context definition.
Step-by-Step DDS Implementation
- Create or Open a Pricing Procedure:
- Navigate to Pricing Procedure Setup and create a new procedure or modify an existing one.
- Add the Discount Distribution Service (DDS) Element:
- Click on Add Elements and select Discount Distribution Service from the list.
- Set a Floor Price Limit (Optional):
- Enable the Set Floor Price Limit option to prevent unit prices from going below a predefined threshold.
- Select Eligible Line Items:
- Define which line items qualify for discounting. DDS will apply discounts to all quote lines unless otherwise specified. You can use a lookup table or conditions for eligible quote lines.
- Apply discounts only when the Net Unit Price does not exceed a specific value.
- Define Required Variables:
- If using the Set Floor Price Limit, specify tags for the required variables.
- Map Variables to Context Tags:
- Ensure that all necessary variables are correctly mapped to context tags to ensure accurate discount calculations.
Key Benefits of DDS
- Fair and Consistent Discounting: Guarantees the discount is allocated equally or proportionally across all quote lines.
- Reduced Manual Effort: Automates the discounting process, minimizing human error and time spent on calculations.
- Pricing Accuracy: Enhances compliance with pricing policies and ensures transparency in revenue recognition.
- Scalability: Works effectively with complex pricing models, such as bundles or subscription services.
Key Considerations
- Manual Recalculation: DDS does not automatically trigger recalculations when a field is updated. Custom solutions may be required for recalculations.
- Element Position in Pricing Procedure: DDS should be the last element in your pricing procedure for accurate discount application.
- Visibility in Pricing Waterfall View: Discounts distributed by DDS do not appear in the Pricing Waterfall View.
Conclusion
Salesforce Revenue Cloud’s Discount Distribution Service (DDS) provides businesses with an automated and consistent way to apply discounts across multiple line items in a quote. Unlike Salesforce CPQ , which require manual configuration or custom development for similar functionality, DDS is built directly into Revenue Cloud Advanced (RCA), offering an out-of-the-box solution that streamlines the discounting process.
By using DDS, businesses can reduce manual errors, improve pricing accuracy, and ensure compliance with pricing policies, all while delivering a better customer experience. For companies with complex pricing structures, DDS provides the scalability and flexibility needed to optimize the discounting process, ultimately driving better business outcomes.
