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Overage rate Salesforce CPQ explained

Did you know the Overage rate Salesforce CPQ offers plenty of options for faster quoting and pricing? I was recently doing routine research for the customer when I noticed there is a gap in the knowledge about overage rates in Salesforce. I did not find any non-technical explanation of what it is.

What is the Overage rate of Salesforce CPQ?

Overage rate is the rate you would charge a customer every time the quantity inside the bundle exceeds bundled amount.

Overage rate is the rate you would charge a customer every time the quantity inside the bundle exceeds bundled amount. For example, you have 50 pcs in a pile and charge $100 for the whole heap. Starting from peace 51, you will have to charge extra. Suppose you charge $1 for every additional piece. In such a scenario, if the customer purchases 51 pcs of something, you will charge $100 for the first 50 pcs plus $1 for one extra piece exceeding what was included in the bundle. Simple as that.

Why should you consider overage rates function?

There are many cases in which the Overage rate could do an excellent job for your business, from retail to complex manufacturing cases, where bundling is essential. I can provide you with a great example, however, from managed services business.

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    Our Blondie Care packages included a limited number of hours per month. These hours are available for the customer, and once a customer uses them, we bill for extra hours. Suppose our package contains 20 hours of services monthly and we bill $2000 for the box. The package not only contains hourly costs but contract maintenance fees and dedicated agent support. Every time a customer exceeds the limit, we invoice extra hours at a rate of $80 per hour. This is a perfect example of the Overage rate in the Salesforce CPQ module.

    What are Overage rate Salesforce CPQ limitations?

    The only limitation relevant to business users is that the overage rate function is available with the CPQ package from Salesforce. You don’t have this option with standard quoting. By the way, I have written a great article on what are standard quoting limits recently. Take a look at it.

    System Thinker, Technology Evangelist, and Humanist, Jeff, brings a unique blend of experience, insight, and humanity to every piece. With eight years in the trenches as a sales representative and later transitioning into a consultant role, Jeff has mastered the art of distilling complex concepts into digestible, compelling narratives. Journeying across the globe, he continues to curate an eclectic tapestry of knowledge, piecing together insights from diverse cultures, industries, and fields. His writings are a testament to his continuous pursuit of learning and understanding—bridging the gap between technology, systems thinking, and our shared human experience.

    No hocus pocus, just strategic focus.

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