Pricing Structures

Use this topic to understand the pricing structure in the Launch application.

Price List

A price list is a set of standard prices for products and services. You can use multiple price lists to offer different prices for the same product as well as specify a price list. The price list specifies a price and the currency for that price. For example, you can use separate price lists to charge business customers 30USD a month for internet service and charge residential customers 50USD a month for the same service.

You can use multiple price lists to offer different prices in different market segments (such as consumer or business customers, as stated in the earlier example), with different currencies, through different sales channels (such as products purchased online or at a store), and to different geographic locations.

You can define the type attribution for a price list based on customer segment, location, or any logical extensible value. For example a price list type can be residential, business, and so on.

As a product administrator, you can create a price list so that it can be used in both simple or bundle offers. Additionally, you can also look at all the simple or bundle offers associated to a price list. As a pricing specialist, you can remove your offer from a price list so that it no longer appears on the price list's list of offers. As a marketing product manager, while editing an offer, you can modify the price items on the price list.

As a marketing manager, while creating or editing a simple or bundle offer, you can view existing price lists, select a new price list, edit or delete an existing price list, so that the offer appears with the specified price on the selected price list.

Simple Pricing Types

Other than price lists, there are simple and advanced price types available to you. You can use the existing price lists while creating simple or advanced pricing types.

Here are some of the simple price types:

One-Time Fee: This is a nonrecurring charge, such as setup or cancellation fees. You purchase a broadband plan and it incurs a one-time setup fee of $100.
Recurring Fee: These are ongoing charges that aren't generated or affected by usage, such as a monthly subscription fee. You set up this fee to recur automatically based on the frequency of recurrence. For example, a $10 monthly subscription fee.
Usage Fee: These are charges for the use of a service, such as telephone calls or data usage. Usage fee is measured by the metering rule. You add usage specifications through REST APIs and while creating an offer, associate a usage specification and service specification with the product specification and specify a metering rule. For example you can set up price of $50 for 100 GB of data usage.
Existing Price Plan: A price plan specifies how to calculate the cost of a price type configured. It has the price model, price constraints, and rules which determine the actual price. You can reuse any of your existing price plans supporting different price models across simple offers, instead of creating price plans every time you create an offer. Reusing price plans gives you the ability to perform bulk or mass update to prices.

Here's an example. Let's consider a price plan monthly subscription fee of 100$ which has a General Ledger Identifier and tax code, and is used in a mobile offer. Based on business requirements, the same monthly subscription fee could be reused in the mobile data offer. If you make a change from 100$ to 200$ in one of the price plans, both the offers will reflect the new price.

Additionally, after you have created a price plan, which also includes your financial information, you can reuse any of your existing price plans across simple offers, instead of creating price plans every time you create an offer. When you update a specific existing price plan, you perform bulk updates for pricing across offers, which use the same price plan. This helps you make updates across offers without needing you to revisit individual price plans.

As a product administrator, you can also create and define currency and noncurrency balance elements through API and use noncurrency balance elements to specify the allowance for a specific price. As a pricing specialist, you can use the desired balance elements while specifying the prices for your offer. For your price lists, you can specify the currency type, ISO codes, currency symbols, rounding mode, and decimal points, whereas for prices of your offers you could define the allowance types. Additionally, you can also define the consumption rules for the balance elements.

Here are a few examples of different simple pricing schemes:

Pricing Scheme	Example
Fixed subscription pricing	9 monthly for unlimited subscription $15 for 100 GB mail box
Usage charges for any units of measure	$1.99 per MB of consumed data
Nonservice based charges	$10 purchase fee $20 setup fee
Physical good pricing with discounts	128 GB variant of phone - $100 with 10% discount
Fixed subscription with discounts	$50 monthly with $1 discount
Usage charges with discounts	$1.99 per MB of consumed data with $0.1 discount
Termination charges	10% flat fee or balance of contract

Advanced Pricing Types

Here are the advanced pricing types available to you:

Allowance
Volume
Tiered
Attribute-based pricing

Attribute-Based Pricing

Attribute-based pricing is a combination of characteristics to formulate a price. As a pricing specialist, you can price a simple offer based on the combination of attributes or characteristics of its usage specification, product specification, customer profile specification which gives flexibility for dynamic pricing and prevents product proliferation.

Attribute-based pricing is where the price of a charge on a product offer is determined by rules which are the enumerated values of one or more attributes applied on an offer through its usage specification, product specification or custom profile characteristics. In a simple scenario, the price is based on a single attribute. For example, a recurring charge for a bandwidth product could be priced based on the bandwidth value, such as 50$ for 5 MBPS, 75$ for 10 MBPS, and so on.

In a complex scenario, the price of a charge is based on more than one attribute, where the attributes may be based on different characteristics. For example, the price of a recurring charge for a bandwidth product could be priced based on the bandwidth value in conjunction with the geographic location of the network service and the customer profile characteristics. Attribute-based pricing is provided based on specific attributes of a service specification, customer profile specification, or usage specification or a combination of the specifications. However, you can use usage specification only if the usage fee is used for the attribute pricing, while customer specification profile, product specification profile, and service specification can be used for other pricing structures, such as one-time or recurring fees.

Here's an example of a combination of customer specification profile and service specification attributes:

Customer Profile: Customer Type	Product Specification Bandwidth	Price	Allowance	Price Format
Platinum	10 MBPS	100$	20 GB	Per unit or fixed price
Gold	10 MBPS	100$	30 GB	Per unit or fixed price
Platinum	20 MBPS	1500$	40 GB	Per unit or fixed price

Here's an example of a combination of usage specification attributes:

Usage Specification: Call Origin	Usage Specification: Call Destination	Price	Price Format
India	US	1$	Per unit or fixed price
India	ROW	0.9$	Per unit or fixed price

Attribute-based pricing with Allowances

Additionally, you can also add allowances with attribute-based pricing, based on a combination of customer profile specification, and service specification. Here's an example, where monthly allowances are provided:

Bandwidth	Customer Type	Price	Allowance
10 MBPS	Gold	100$	10 GB per month
10 MBPS	Silver	120$	8GB per month
20 MBPS	Gold	130$	10 GB per month
20 MBPS	Silver	140$	8GB per month
-	-	299$	-

Here are a few examples of advanced pricing:

Pricing Scheme	Example
Fixed allowance subscription pricing	$50 monthly for up to 10 GB mobile data
Attribute-based pricing	You define a 128 GB variant phone to be priced at $250 and a 256 GB variant to be priced at $400.
Fixed allowance with overage	Overage is charged at a rate of $1 for every 15 minutes increment
Tiered and volume subscription pricing	$29 monthly for up to 10 accounts $25 for 10 to 100 accounts $23 there after
Multi-dimensional attribute-based pricing	128 GB phone- $100 256 GB phone- $123
Tiered usage pricing	$1 for first 10 GB $1.2 for 10 GB to 20 GB $2 thereafter
Tiered and volume discounts	$0.10 discount for 1-10 movies $0.20 discount for 11-20 movies
Effective date based pricing	$10 for Jan 1st to Mar 31st $11 from April 1st onward

Note:

Irrespective of the pricing structure that you use, simple pricing or advanced pricing, you could specify your tax codes and indicate whether your price is either inclusive or exclusive of tax. Tax codes are used by taxation systems for billing. You can have vendor-specific tax codes or simple tax codes. If you choose to use tax codes, you must load your tax codes using REST APIs and use it in the price plans.

Price Plans with Commitment Period

You can set up price plans with commitment terms for atomic offers of type service and bundle offers of type commercial, service, and package. Setting up price plans with commitment terms enables you to avoid proliferation of offers every time you want to set different prices for different commitment terms in your offer. You begin by creating a price for your offer on the pricing train stop.

The next step is to create a commitment term. A commitment term is a condition in which the product offer is sold to a customer. For example, you can set a two-year commitment period for a product offer. This effectively means that when you sell this offer, the customer has committed to this offer for a period of two years. The commitment may or may not be absolute. You can also provide early termination options for an easier exit route for the customer. Alternatively, you can set up penalty for early termination with the following options:

None
Flat: A flat fee, such as 100 US dollars or 75 euros.
Fixed Proration: A flat termination fee for a contract duration with proration percentage penalty for each remaining month in the contract. The system calculates and evenly spreads the penalty percentage across the contract duration.
Variable Proration: A flat termination fee with different proration percentages for different periods of time within the contract duration.
Balance of Contract: The balance remaining in the customer's contract.

Here's an example of Fixed Proration. Consider that you have a wireless voice service that has a contract period of 24 months and you set a proration termination penalty of 400$. Then the application determines a 4.17% penalty per month (100/24 = 4.1666%). If a subscriber terminates the service in 14 months with 10 months left in the contract period then he has to pay a prorated penalty of 10 x 4.17% x $400 = $166.80.

Here’s an example of Variable Proration. Consider that you have a wireless voice service that has a contract period of 24 months and total penalty of 400$. And you set a variable proration penalty for different periods as follows, cancelling the subscription in the months 1 to 8 carries a penalty of 10%, months 9 to 12 carries a penalty of 5%, and no penalty after 12 months. A subscriber cancelling the subscription 4 months into the contract will incur a termination fee of $400 – 4x10%x400 = 260$.

Here's an example of balance remaining in the customer's contract. A customer with a one-year commitment period with a $50 monthly fee would pay a penalty of $50 for each month remaining in the contract. A customer canceling with 5 months remaining would pay $250, and a customer canceling with 3 months remaining would pay $150.

After you have set up your commitment term, you can associate it to a price list and use it for your offer. Components in a package bundle can have their own commitment terms but can be overridden to fit the pricing and commitment needs of the package

For simple offers: As a product manager, you can create, edit, and associate multiple commitment terms for an atomic service offer from the pricing train stop. As a pricing specialist, you can set up different prices for each of the commitment terms configured on the offer instead of creating multiple offerings for each commitment term period. Additionally, you can also set one of the terms as a default price term. Here's an example:

Commitment Term	One-Time Charge	Recurring Charge	Usage Charge
12 Months (default)	100	150	1$ per unit
6 Months	190	200	2$ per unit

Additionally, you can also define a no terms price. The no terms price is used when there is no commitment period for an offer and you pay as you go for the service. You can define no terms in both atomic and bundle offers. For example,

Commitment Term	Subscription Charge	Purchase fee
2 Year Term	10 USD	100 USD
No Terms	5 USD	100 USD

For bundle offers: As a product manager, you can create, edit, and associate multiple commitment terms for a bundle offer. For each of the simple offers used in the bundle offer, the terms and the prices defined in the simple offer pricing train stop is used. If you choose to, you can specify a term period for the bundle offer and based on the term that matches the simple offer, the bundle price gets determined. When the bundle price tenure doesn't match the atomic offer prices used in the bundle offer, and if you have set the no term price as the default, then the default price is used as the price for the bundle offer. Here's an example:

Product manager creates Offer A with 6 months and 12 months commitment terms; where default is the 6 month commitment term.
Product manager creates Offer B with 6 months commitment terms, as default.
Product manager creates Bundle AB with Offer A and Offer B.
Product manager modifies prices for specific or all price types.

Offer A:

Commitment Term	One-Time Charge	Recurring Charge	Usage Charge
12 Months	100	150	1$ per unit
6 Months (default)	190	200	2$ per unit

Offer B:

Commitment Term	One-Time Charge	Recurring Charge	Usage Charge
6 Months (default)	190	200	2$ per unit

Bundle AB (6 month commitment term default): Here the default term price is used as there is no 12 months tenure.

Offer Components	Commitment Terms	One-Time Charge	Recurring Charge	Usage Charge
Offer AB	-	380	400	-
Offer A	6 month term	190	200	2$ per unit
Offer B	6 month term	190	200	2$ per unit

Bundle AB (12 month commitment term):

Offer Components	Commitment Terms	One-Time Charge	Recurring Charge	Usage Charge
Offer AB		290	350	-
Offer A	12 month term	100	150	2$ per unit
Offer B	6 month term (product manager chooses 6 month term price to apply for 12 month term at bundle level)	190	200	2$ per unit

Alteration cases in bundle AB for a 12 month commitment term.

Offer Components	Commitment Terms	One-Time Charge	Recurring Charge	Usage Charge
Offer AB		280	349	-
Offer A	12 month term	100 (10% discount)	150	2$ per unit
Offer B	6 month term (user chooses 6 month term price to apply for 12 month term at bundle level)	190	200 (1$ discount)	2$ per unit

Alter Prices

You can alter prices for your bundle offers and if required specify the price type to which the discount or markup amount is applied. When you can perform bundle-level alteration at service bundle, package, or commercial bundle, you can specify the particular price type to which the alteration must apply.

Here are the different ways you can alter price:

Discount amount and percent: You can apply a discount to price. The discount can be an absolute or a percent of the original price. For example, if the original price was $100, and you applied a discount of $10, then the adjusted price would be $90. Similarly at the 5% discount, the adjusted price would be $95.
Markup amount and percent: You can inflate the price by an absolute amount or percentage value. For example, if the original price was $100, and you applied a markup of $10, then the adjusted price would be $110. Similarly, if you applied a markup percent of 5%, the adjusted price would be $105.
Price override: You can override the price by an absolute value. This amount becomes the adjusted price. This is applicable only for bundle product offer. You can also use price override on the components of a bundled or simple product offering.

You can use relative effectivity of price to manage scenarios such as offering zero charge for the first three months and then applying monthly fee in a product offering. You can use this option when defining price alterations for atomic offers.

You can also make these alterations limited for a period of time. In this scenario the alterations or discounts that you apply to the base price is only applicable for the duration that you define. Outside of this period, the regular base price without the alterations are applied. The date for these alterations can be a calendar date, relative to the purchase date, or relative to the activation date.

You can also reuse the existing price alterations on atomic offers to avoid price proliferation.

Device Programs

You can use device programs to offer alternatives to your customers instead of making them pay full prices for the devices. Device programs that you can offer to your customers include Installment Plans and Leasing Options. See Device Trade In for more information.

Lease

The Lease device program enables your customers to own the latest devices and accessories at lower upfront cost using lease plans. They can use a device for the lease term period in exchange for a monthly equipment rental fee. As a product manager, for a device or accessory offer type, you can provide lease plans with an agreement and specify the lease terms that includes the return checklist for devices and accessories. You can set up a lease plan with a recurring fee. You can set up several leasing plans, based on duration, or terms. See Set Up Lease Plan for information on setting up Lease.

As a catalog administrator, you can create the return checklist template to support the return of leased devices and accessories. The template should include criteria to determine the working condition of the leased device, tasks to be performed by the subscriber before returning the device, and instructions to ship the device or return it to a store.

Installments

The installment device program enables you to provide payment alternatives to your customers. As a product manager, for a device offer, you can provide installment plans, with multiple installment terms, set prices, specify the credit approval and minimum down payment, and decide if the plan is inclusive or exclusive of tax. You can also set the default terms as well as the upgrade rules for a plan.

You can set an installment agreement against a one-time purchase fee. You can also configure any advanced pricing, such as attribute-based pricing, that may be required for down payment or monthly installments. The attribute-based selector in the attribute-based pricing section enables you to define different installment plans based on tenure, for the various entities that you choose to configure.

As a product manager, while creating a device installment plan you can specify the qualifiers such as customer type, loyalty tier, credit score, or rewards membership of customers to define their eligibility. For example, you can have a North American operator to model the installment plans based on credit score and an APAC operator to model the installment plan based on loyalty tier. See Set Up Installment Plan for information on setting up Installments.