Rates

Rates assign pricing model (e.g. tiered, flat) prices, and timing (advance or arrears) to an Offering.

An Offering may have multiple rates (e.g. for different customer segments).

Example: Seats with Implementation Fee (from Offerings page)

Product	Product Type	Quantity	Billing frequency	Price	Subscription Timing
Implementation fee	Onetime	1	Once	$10,000	Advance (upfront)
Seats	Subscription	10	Monthly	$1,000 / seat / year	Advance (upfront)

Rate details

Rates can be thought of as a "Price Book".

Each Offering can have multiple Rates associated with it. A new Rate is based on the following:

Currency
Billing Frequency: the length of time for which a product applies.
- Options: Monthly, Annually, etc. including any number of months.
- Examples:
  - If a contract length (defined in Quoting) is 12 months and frequency is monthly, there will be 12 full monthly periods in the Contract.
  - If contract length (defined in Quoting) is 15 months and frequency is semi-annually, there will be 2 full periods of 6 months each + 1 partial period of 3 months in the Contract.
  - If contract length (defined in Quoting) is 15 months and you seek to invoice all charges at once, set frequency to be 15 months.
Billing Timing
- Advance (aka upfront): billing occurs at the start of each period
- Arrears (aka after): billing occurs at the end of each period
Sales Channel
Plan

SaaS pricing is commonly done in terms of Good, Better and Best with pricing of each done on either a monthly or annual basis. In this case, create six Rates -- Good/Monthly, Good/Annual, Better/Monthly, Better/Annual, Best/Monthly and Best/Annual. No need to create multiple Offerings!

You can also indicate on a Rate whether you want to be offered only on the self-serve channel or to be used by the sales reps for quoting.

📘
Reseller Pricing
Reseller Pricing will be offered in the future using Rates. You would be able to support different prices per reseller.

Pricing Models

Rate offers following pricing models to be assigned to a Product

Volume - Pricing is equal to price per unit times quantity. Note that you can create Volume-based tiers in which case the pricing of that tier will be chosen to calculate the final amount.
Tiered - Pricing is incremental and depends on the all the previous tiers. See the example below.
Flat - Pricing is independent of the quantity
Block - Pricing is based on paying for defined unit blocks across quantity tiers
Percent of Total - Pricing is a % multiplied by the price of other products on the Quote (e.g. support priced at 10% of other core licenses)
Custom - Pricing is decided during quoting

Volume vs. Tiered pricing comparison

As an example, let's say you the following pricing model

Pricing Model	From	To	Price Per Unit
Volume	0	10	5
Volume	11	50	4

If the quantity selected is 12, Pricing = 12 * 4 = $48

Let's say the pricing model is Tiered instead,

Pricing Model	From	To	Price Per Unit
Tiered	0	10	5
Tiered	11	50	4

If the quantity selected is 12, Pricing = 10 * $5 + 2 * $4 = $58

📘
Best Practice
For SaaS, Tiered pricing is recommended. Volume-based pricing applies a common discount on all units purchased, including units purchased earlier. This can create challenges.
In the above example, let's say the customer buys 10 units and they pay you (10 * 5 = $50). The customer likes your product and comes back and buys an additional unit. Total pricing for 11 units = (11 * $4) = $44. Decreasing your revenue by $6 for a larger purchase does not make sense for you or your customer. Volume pricing should be used cautiously.

Block Pricing

Overview

Block pricing is a pricing strategy where customers are charged based on fixed blocks or units of a product or service, regardless of the exact quantity consumed within each block. Unlike traditional tiered or volume pricing, block pricing rounds up partial usage to the nearest complete block.

Key Characteristics:

Customers pay for complete blocks, even if they don't use the full block
Pricing is calculated by determining how many blocks are needed to cover the requested quantity

From	To	Block Size	Price per Block
1	∞	100 units	$1

Pricing Examples

Quantity (Units)	Blocks Used (Calculation)	Amount
50	0.5 blocks → rounds up to 1 block	$1
100	1 block	$1
150	1.5 blocks → rounds up to 2 blocks	$2
200	2 blocks	$2
300	3 blocks	$3

Multi-Tier Block Pricing

Price Model Configuration (Multi-Tier)

Tier	Unit Range	Block Size	Price per Block
Tier 1	1 - 100 units	100	$0 (free tier)
Tier 2	101 - 1000 units	100	$1
Tier 3	1001+ units	500	$4

Pricing Examples

Quantity (Units)	Price Calculation	Amount
50	1 block in free tier	$0
100	1 block in free tier	$0
150	1 free block + 1 paid block ($1 × 1)	$1
500	1 free block + 4 paid blocks ($1 × 4)	$4
1000	1 free block + 9 paid blocks ($1 × 9)	$9
1200	10 blocks (Tier 1 & 2: $9) + 1 block of 500 (Tier 3: $4)	$13
2000	10 blocks (Tier 1 & 2: $9) + 2 blocks of 500 (Tier 3: $4 × 2)	$17

Use Cases for creating new Rates

Pricing experimentation
Pricing in different currencies
Pricing for different subscription periods (e.g. monthly, quarterly, annual)
Pricing across different sales channels
Price the same product using a different business model - For instance, you can sell Users (a Product), based on volume for self-serve and only allow 10 users, while for your sales-led channel you can sell Users on tier-basis and potentially allow infinite Users.

FAQ

How do you set up my product catalog for upfront billing for the entire contract period?
- RevOps or other Admin: Create a Rate called Upfront with a long Subscription Frequency (e.g., 5 years or more) and Advance Timing
- AE / CSM: Use that Rate on the Quote. As long as the Subscription Frequency of the Upfront Rate RevOps created is >= the Contract Length, all charges will be billed upfront and reflected as such in the Billing Schedule.
  - Bonus: use a Custom Display Frequency to show the price in a way your customer will most easily understand it. Most common choice is annual or monthly.