Salesforce Certified CPQ Specialist Practice

What is a Term Discount in Salesforce CPQ?

1. A discount based on customer loyalty

2. A discount applied based on the subscription term length

3. A discount for payment in advance

4. A discount on bulk orders

The correct answer is: A discount applied based on the subscription term length

A Term Discount in Salesforce CPQ refers specifically to a discount that is applied based on the length of the subscription term. This kind of discount incentivizes customers to commit to longer subscription periods by offering them a reduced price in exchange for their extended commitment. The way this works is that the pricing model takes into account the duration for which a service or product is subscribed. Generally, the longer the subscription term, the greater the discount a customer can receive. This structure not only benefits the customer by reducing the overall cost but also helps companies stabilize their revenue streams by securing longer-term contracts. In contrast, discounts based on customer loyalty, payment in advance, or bulk orders would pertain to different discount types and mechanisms in Salesforce CPQ, which focus on varied aspects of the purchasing relationship rather than the duration of the subscription itself.