We have a unique situation with clients sometimes where we use a tiered cost for our services. Example a 5 year contract is signed but the pricing fluctuates by Year. Year 1: $100,000, Years 2-3: $90,000, Years 4-5: $85,000. I understand the Amount of the Deal will always be correct ($450,000) but how can we properly project our Annual Revenue for the years down the road where we offer a discount? Any thoughts? We thought about creating 3 seperate Deals but that seems like a lot of work and we would have to mark Closed Won and adjust the close date to a future date which seems like a very bad practice. Keep in mind this isn’t a SaaS product. Thanks!
Hi @SComeau,
Thank you for the detailed query. Could you elaborate on this?
@SComeau wrote:
how can we properly project our Annual Revenue for the years down the road where we offer a discount?
If this is not for a SaaS product, I’m assuming you’re not working with the recurring revenue analytics. What exactly is the process of projecting your annual revenue? Is this in some way automated or handled with HubSpot reports and if so, how? In other words, which input would this process be expecting?
If it’s a matter of easily seeing how the full deal amount breaks down into pricing tiered by year, than this could also be handled with a pinned note, for example.
Best regards!
No we are not working with recurring revenue analytics. It is a contract in which the longer you sign, the more you save on our yearly fee. A pinned note would explain this but it will not help us with reporting. If the entire Contract is $450,000 for 5 years, this would calculate to an Annual Revenue Projection of $90,000 per year. This isn’t really the case since it will be $100,000 the first year, Years 2-3: $90,000, Years 4-5: $85,000. I am just trying to figure out a way to reflect this in reporting.
Hi @SComeau,
Thank you. The point I’m stuck at: Which tool is using the deal amount to calculate an annual revenue projection?
Best regards
We have a custom field. It takes the Total Amount of the Deal and divides by the Term of the Contract to give us our ARP. But, even if we use the Annual Recurring Revenue field, that would still be incorrect. I am just trying to figre out how other companies do this with a tiered discount. We do use line items and input the data there as well. the ARR and the ARP fields match.
Hi @SComeau,
Got it, thank you.
If your report is expecting one value, then there must be one final field – and a logic for how that field computes. Either the highest pricing, the lowest pricing, or the average. The average seems like the best approximation to me here for a deal that combines different yearly pricing into one field.
For anything beyond that, you would probably have to move to yearly reporting and break down multi-year deals into separate yearly deals to achieve this level of deal in reporting.
Within one deal, with one property, I don’t think this can be achieved.
Best regards!