Step-by-Step Process for Managing Bundles with Fluctuating Product Performance

Track Performance Data in Real-Time:

Using Salesforce CPQ and RLM, you should have real-time data on sales and revenue for each product in the bundle. This allows you to identify when a product starts underperforming (e.g., declining sales, customer dissatisfaction, increased return rates).

Revenue Segmentation:

Product revenue recognition can be handled differently depending on whether the product is sold as part of a subscription or a one-time purchase.

• Subscription Products: Revenue is recognized over time, typically monthly or yearly.
• One-Time Sales or Consumables: Revenue is recognized immediately upon delivery or consumption.

You’ll want to ensure the finance team uses revenue segmentation to differentiate these streams and forecast any impact if you decide to remove or replace a product from the bundle.

Review Profitability of Each Product:

Conduct an SKU-level profitability analysis for the underperforming product. If the product is dragging down the profitability of the overall bundle, you’ll need to determine if it should be replaced, modified, or removed.

Align with finance to understand the cost-to-serve for each product, considering production, fulfillment, and service costs. If the cost of maintaining the underperforming product outweighs its benefits, it may be time to consider alternatives.

Assess Product Dependencies within the Bundle:

• Some products in a bundle may have strong dependencies on others. If an underperforming product is a core part of the customer value proposition (e.g., a critical feature of a software bundle), you’ll need to consider how removing it would impact the rest of the bundle.
• For subscription products, assess how product removal could affect subscription renewal rates. You may want to offer a discounted or upgraded replacement to retain customers without disrupting the subscription structure.

Adjust Bundles with Minimal Disruption:

If you decide to remove or replace an underperforming product, you must ensure minimal disruption to sales and the customer experience. This is where Salesforce CPQ’s dynamic bundles come into play.

• Create an updated bundle that removes or swaps the underperforming product with a higher-performing alternative. You can leverage CPQ’s automation capabilities to offer seamless transitions and maintain price consistency.
• For subscription bundles, prorate or adjust the subscription terms for mid-cycle customers to ensure that revenue recognition continues smoothly.

Integrate Changes with Revenue Lifecycle Management (RLM):

Salesforce RLM ensures you align these changes with revenue recognition policies:

• Subscription-Based Bundles: If you adjust the product within a subscription, RLM will automatically calculate the change in revenue to be recognized over time (such as pro-rated revenue based on subscription cycles).
• One-Time Sales: If a product in a one-time purchase bundle is swapped or removed, RLM ensures that recognized revenue for the replaced product is correctly adjusted in the financial reporting.

RLM also tracks any modifications to contracts or renewals to ensure no revenue recognition errors due to product changes mid-term.

Continuous Monitoring and Reporting:

Continuously monitor the performance of products within bundles, particularly after making changes. Use Salesforce analytics and dashboards to track:

• Customer satisfaction and renewal rates (for subscription bundles).
• Sales velocity and profitability (for one-time sales bundles).

Sync regularly with finance to ensure any revenue recognition impacts are accounted for and aligned with adjustments to financial forecasts.