Step pricing

A tiered pricing strategy that defines a flat-fee for each tier or step.

In Zenskar, step pricing strategy has the concept of steps which is equivalent to tiers in the volume and tiered pricing strategies. In volume and tiered pricing strategies, each tier has a per-unit price associated with it. However, unlike volume and tiered pricing strategies, each step has a flat fee associated with it.

How to add a product based on step pricing in Zenskar

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Important

Refer the products documentation to learn more about the concept of products in Zenskar.

Step 1: Create a product based on step pricing

  1. Navigate to Contracts > Products, and click on the ADD PRODUCT button.
  2. Select the Step Pricing from the drop-down.
  3. Select or deselect Metered:
    1. If the service or product is metered, select the appropriate usage aggregate from the drop-down.
    2. If the service or product is not metered, enter the quantity.
  4. Fill in all other details, and select all the desired features.
  5. Save the product.

Example: one-time purchase

Let us assume that:

  • you sell cloud storage space for three months as a one-time purchase
  • after three months, the customer is moved to the free tier
  • economies of scale allow you to provide the following steps:
Storage step (GB)Flat fee (USD)
1-10015
101-100030
1000-∞60

Example: recurring purchase

Let us assume that:

  • you sell cloud storage space as a monthly subscription
  • if the subscription is not renewed, the customer is moved to the free tier
  • economies of scale allow you to provide the following steps:
Storage step (GB)Flat fee (USD)
1-1005
101-100010
1000-∞20

Step 2

Add product to new contract

  1. Navigate to Contracts > Contracts, and click on the + ADD NEW CONTRACT button.
  2. Click on the + ADD NEW PRODUCT button.
  3. Select the product(s) based on package pricing for the contract.

Add product to new template

  1. Navigate to Contracts > Templates, and click on the + ADD NEW TEMPLATE button.
  2. Click on the + ADD NEW PRODUCT button.
  3. Select the product(s) based on package pricing for the template.

How is step pricing strategy different from volume and tiered pricing strategies

Step pricing strategy is based on a flat fee defined for each step. However, the volume and tiered pricing strategies are based on per-unit pricing for each tier. Therefore, in step pricing strategy, if a step is defined as 1-100 units of a service or product, the flat fee defined for the step will be applicable irrespective of whether the customer purchases 1 or 100 units of the service or product.

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Tiered versus volume vs step pricing

Let us assume:

  • you are in the business of selling software licenses
  • you are selling 250 licenses to a particular customer
  • you have defined tiers as shown below:
Number of licensesPrice per unit in USD
1-100100
101-20090
201-∞80

In stark contrast, steps in step pricing strategy are defined based on flat-fee as shown below:

Number of licensesFlat fee in USD
1-10010000
101-20018000
201-∞20000

Comparing the total cost of 250 licenses in tiered, volume and step pricing strategies:

Number of licensesTiered pricingVolume pricingStep pricing
1-100100 * 100
101-200100 * 90
201-25050 * 80250 * 8020000
Total230002000020000