Price components represent each of the multiple products, skus, or parts that make up an offering. The total price of your or your competitor's offering is expressed as the sum total of the relevant price components per the relevant price unit.
Price components can be created by:
- Adding and calculating a custom price component.
- Selecting an existing one from a library.
Price components can be added and edited in all three modules (value modeling, price setting, and value communication). In the value modeling module, price components can be accessed on the second tab, Units & Prices, or on the sixth tab, Summary.
This article will focus on how to add and edit price components from the Units & Prices tab in the value modeling module only. However this process will be the same elsewhere.
Adding a Custom Price Component
To add a new custom price component, select the "Add Custom" link in the price component section for either the competitor's or your offering.
Either selection will open a price component formula box that will become a new price component for either your offering or your competitor's offering. Below is a new price component for an offering from our example company, Superior Red Paint.
The price component formula box contains the following:
Price component name
- "New Offering Component" is the default name for new offering price components, while "New Competitor Component" is the default name for competitor price components. To edit price component names, click on the existing name in this formula box and type in a new name.
- Use this link to add a new or existing variable to your price component.
- As you begin to type the variable name, the type-ahead functionality will list below existing variables from either the value model or libraries that match it. Either select a type-ahead variable or continue typing until a unique variable is created.
- Note: an existing variable will automatically pull in data already associated with it. Changing data of an existing variable will also change the data of that same variable everywhere else that it appears.
- The system will automatically assign a variable type (i.e., currency, percentage or numeric) based on the name. This can be changed as appropriate. See below
- Define the formula in the Formula section.
- Use letters at left of data input field (e.g., a, b, c) to refer to specific variables that you have added
- Use standard mathematical operators: + - * / ^ ( )
- You may also use constants, including decimals.
- For example: ( (a+b) * 0.75 ) - (c/a) + d^3
Use custom value
- Check the box to override the price component formula and enter an estimated quantified value as an input.
Unit of measure
- Select the appropriate unit of measure for your calculation. The default unit is the price unit for either your or your competitor's offering, but you can choose any unit defined in the Units & Currency dialog.
- Optional field to add any explanation related to price components or to enter notes for other users working on the value model.
The following describes functionality menu related to variables, which is accessed by the down arrow to the right of the data field (see below).
The key parts are:
- Defines the variable type, currency, percentage or numeric. The system will automatically assign a variable type based on the name, but the type can be changed by clicking. The specific currency is defined from the More button, Units & Currency.
- Sets the decimal display from 0 to 6 places.
Convert to Subformula
- Click to make the variable into a subformula. The subformula will be shaded and indented. Use variable letters to define the mathematical logic just like formula. Note that variables within a subformula will be relabeled a, b. c.
- Subformulas can be expanded or contracted by clicking the “fx” The current expand/collapse state will save.
Convert to Choice
- Click to make the variable into a choice dropdown. A new dialog will open prompting you to 1) add at least one choice 2) select a default choice for your dropdown 3) enter unique values associated with each choice.
- Choice variables will factor into calculations as the value of the selected choice. For example, if choices "Yes" and "No" are created, with a value of 0 and 1, respectively, a dropdown selection of "Yes" will be valued as 1 and "No" will be valued as 0.
- Use if the variable name is used in other places within this model, but requires different data in each place.
- Note the variable name will be appended with a number, much like a copy of a document on your computer. You may then edit the name of the variable as described above without affecting the other version.
- Use to search for data outside the current value model. It will open a Find Data dialog where the variable name (and matches) will be displayed and sorted by relevance. You can filter selections by Libraries, Value Models, Value Propositions or Unique Value Propositions. You can then Select to add the data to your model.
- Use to document Source and Notes related to the variable/data.
- Use to add or edit variable tags. Tags are used to organize display of variables. See Tags
- Variables that are locked cannot be changed by Sales users. You have the option to lock within a minimum/maximum range. Note: the default setting is Unlocked.
- Removes variable from the formula. However the variable will remain on the list of variables regardless of whether used in other calculations.