Specific and Generic Price Rules
How Price Rules Work
This customer specific pricing has many different facets to it, but it can include what are referred to as "price rules." Price rules are very powerful. The concept is that this could come in from an integration, and usually does, so the sales team might be managing this customer-specific pricing information in a CRM or in some other line of business application, like an ERP.
Then, based on the price rules that are determined for a customer account, they could be very complex where they could literally be at the product level. This customer gets this percentage off if they purchased this much total in their entire order.
Or it could be something like—if it's this month of the year and it's this exact product, they get this many dollars off, so not a percentage, but a dollar amount. It could also be things like this particular customer on all their product's gets a 2% discount, but they also get another discount if they're in this one subcategory. Then, instead of being 2%, it's 3% total off, and then if they purchased this one product, they get $10 off for every single one that they purchase.
The price rules are really powerful because they can enable these generic rules that have inheritance so that the more granular the rule is, the more it wins, in a sense, over the macro level, high level rule.
And where there isn't a more granular rule specified, the more macro high level rule wins, and so it allows this application of these multi-tiered very faceted price rules.
In addition, there are common pricing mechanisms within a lot of ERPs that are just simply based on customer role, and they're very generic, and they might be based on quantity breaks. So, it could be that this customer generally gets a discount of this type, and then if they purchased this much quantity, they get an additional discount applied. Or it could just be simply that the customers just straight up get a quantity discount.
These are just some of the scenarios for customer specific pricing. It really can be extremely granular per customer with just general rules where those granular rules are not in existence.