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OnTime Logistics Software: An Introduction to Pricing

This video includes a general overview of how pricing is setup in OnTime logistics software and includes examples of price modifiers that are used to fine tune your final prices.

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In this video, we're going to give you an introduction to pricing across OnTime. This turns out to be a very important feature of OnTime because OnTime uniquely allows you to program in virtually every aspect of your pricing ahead of time, making it very easy for your customer service representatives, dispatchers, and customers to place orders and get ratings on their shipments.

In order to configure pricing, we're going to use the OnTime Management Suite program. I'm going to start mine up and go over to the Prices area. You'll notice in the upper left-hand corner that there are two views: one is for Price Sets and the other is for Price Modifiers. We'll talk about the modifiers a little later. The Price Sets themselves represent the contract between you and your customer or group of customers. Contracts or Price Sets can include things such as the name, the guaranteed level of service, the due dates, the schedules, the pricing, and any additional charges that may go on top of that such as surcharges and taxes.

Let's take a look at one of these Price Sets. When you create a new Price Set, there are some things that you will want to put in. First of all, the Name. You'll notice two fields here: the Name and the Service level. The Name represents the internal name for your business; how you want to identify this contract or Price Set. So, you can name this whatever you want that will be helpful in identifying this across your organization. Your customers never see this name. What they do see, however, is the Service level. This allows you to give a friendly, meaningful name that your customers can identify using.

Also in this area, you'll notice that we have room for Dispatcher notes and Customer notes. The Dispatcher notes will appear in the OnTime Dispatch program when one of your representatives is placing an order through the Order Entry screen. These notes will appear when they choose this level of service or this Price Set and they will remind dispatchers of things they need to do when filling out that order. Perhaps even an incentive to upsell the customer.

On the other side, we have Customer notes. This acts in a similar way, except these appear in the OnTime Customer Web Portal and can be useful reminders to your customer to look at perhaps making some notation on the order or purchasing additional services with their order.

Under the Schedule section, we have the ability to setup the Schedule that this Price Set is available on. By default, Price Sets come set to be available at anytime, but you can choose to change this to different schedules. For instance, if you want it to be available only during the weekdays, only during the weekends, or maybe you have holiday rates and want to set those specific dates up. Very nice, flexible arrangement for scheduling when these prices will be active. When the Price Set falls out of the scheduled period, in other words, the current date and time is not contained in the schedule, the Price Set will just fail to appear as being available for a customer to use in the Web Portal or a dispatcher in the Dispatch program.

Below, we have an opportunity to set the Offset due date. This makes it easy to automatically project the delivery time and date into the future by a certain amount. Now, in this particular example, we have the Service level of "4 hour," that is what we're guaranteeing. And, to harmonize with that, we are setting an Offset due date out four hours into the future. So, when this order is placed, by default, the delivery time will be four hours into the future. Of course, that can be extended if need. This is a great way of forcing your contracted times because the customer will not be capable of setting that to less than four hours from the current date and time. So, it will help enforce your workflow.

Under Zone Based Prices, this presents a grid that you may be familiar with if you use zone based prices. This gives all of the Zones that you service across the top and down the side. Depending upon the box that you type a number into, that is the price that will be used by OnTime when two locations in the shipment match up with those zones. To enter a price, just select a box and type in a number to put that price in. Notice that when I enter 5, it will automatically put 5 in another cell. That is because I have Reciprocal Pricing turned on. You can click this and turn it off, but what Reciprocal Pricing does is make it easy to put the $5 charge in both directions. In other words, we want to charge $5 whether we are going to-and-from or from-and-to, it will be the same price.

Another tool we give in here to speed up the filling out of this Zone-to-Zone grid is under Additional Actions. You can choose to Fill Empty Cells With a particular value. For example, I can choose to fill all of these with 4.25 and hit OK. Now all of the fields are filled in with that information. Also, if I decide I need to increase or decrease all of my prices by a consistent amount, I can do that by choosing Adjust All Values. I can choose to bring these up, for example, by 0.25 and they all go up. And then if I wanted to come in and adjust by percentage, I could bring everything down by ten percent. So, I will enter -10, choose Treat as percentage, click OK, and now all of the prices have dropped by ten percent. That can be a quick way of working with a large number of prices.

Incidentally, with Zones, if too many Zones are being displayed and, for a particular Price Set you want a smaller set of Zones, yo can do that by going to the Selected Zones tab. Check off only the Zones that you want to appear for this particular Price Set. Any zones that are not checked will be ignored and not part of the pricing in this Price Set.

Price Modifiers represent small charges that can influence the base price up or down and can perform a calculation to do that. For instance, we may have established our base price under Zone Base Price, but we can use the Price Modifiers section to include calculations that will nudge that amount up or down. Price Modifiers are where you can do calculations such as surcharges, tax, and many more. If I scroll down the list to the Fuel Surcharge, we can see I've checked that in the left column. That indicates that this charge will be available in this Price Set; this customer will get an 8% fuel surcharge. Over to the right, I have two additional checkboxes: one is for Required, one Initial Selection. If I have Initial Selection checked, that means that the fuel surcharge will automatically be turned on when the person places an order using this Price Set; however, they could potentially uncheck it. If I want to make this a required item, then you will want to click this box, Required. That forces a fuel surcharge to always be in this Price Set and the customer cannot remove it. In the case of some of your Price Modifiers, if they are percentage based, we will have this button to the right that says Set %. If you click on that, it will allow you to configure a percentage of what will be calculated of off. For instance, in this case of a fuel surcharge, we are charging 8% and the question is, "8% of what?" Are we just adjusting the base price or are there other items in this order that we want to charge 8% on as well? This gives you an option to choose which items you want to be included in that 8% fuel surcharge.

Finally, under the Price Set, we look at the Customers area. This gives a list of all of the customers that we have in our account and we can check off which customers subscribe to this Price Set. That means that whenever an order is placed for one of these customers, all the Price Sets that they are subscribed to will appear as an optional level of service when placing their order.

That covers Price Sets. Now, let's take a look at Price Modifiers.

As we said earlier, Price Modifiers allow you to take that base price that you've established in your Price Set and move it up or down. So, we can include things like weight charges, fuel surcharges, dimensional weight, taxes, and discounts. Whatever your calculation is, that can be accomodated by a Price Modifier. So, let's take a minute to look at some common price modifiers and how those are setup.

In this first example, we'll look at White Glove Service. In this case, it's a very simple charge where we want to include an $85 fee to the customer if they choose this option. To do that, I open a Price Modifier and the first thing I want to do is insert the Name. Unlike the Price Set editor that allowed us to specify two names (one internally and one externally), the modifiers are a little more simple and just have one name. So, be sure to name it in a way that is identifiable both internally and externally. This name may even appear on things like the customer invoice, so it is good to make it clear what it represents.

We are going to skip over the three boxes above and movedown to the boxes below. This is where we really set up the pricing and tell OnTime how we want this modifier to calculate. The first field we have is Action. This describes the type of arithmetic you would like OnTime to use when calculating the modifier. There are flat amounts, overage amounts that have to meet a certain threshold or be within a range, and there are incremental overage amounts, which allow you to do steps and constant calculations. In this case, we just want to assess a flat $85 fee, so we will choose Flat Amount.

Down here, under Value, we have the amount that we charge: in this case, $85. That is all we need to do to set up this Price Modifier, very simple.

We don't want to leave these calculations to chance and hope that they work right for the customers. We always want to be able to test and verify that the system is acting the way we intend. So, we do include this testing area that allows you to test your modifiers and it will show the arithmetic used and allow you to verify that the calculations are as you expect. In this case, let's imagine that the base price of the order is $100 and let's test this modifier. Notice the diagram showing that the white glove service is assessed at $85, added to the base price of the order itself, which is $100, for a total of $185. Again, a very simple example that starts to show you how these price modifiers work.

Now, let's take a look at a slightly more complex example. In this example, we will look at a fuel surcharge of 8%. How would this be setup? Again, the first thing I do is set the name to something clear that expresses to the customer exactly what this charge is for.

Then, in the Action field, instead of choosing a Flat Amount, we choose a Flat Percentage. This tells the system that we want to take a clean 8% off of the base price and any other prices that we select. So, 8% is inserted into the Value field here and now we want to test it.

Again, we'll assume that the base price of the order is $100. If our math is correct, we're expecting to get an $8 fuel surcharge out of the $100, so that should be $108. Let's see how that works. Again, you can see after testing that the diagram is shown here. You can see the math as it happens and we do get our $8 charge for a total of $108.

Now let's move on to an even more advanced example. In this example, we'll take a look at a weight charge, which is, again, a very common way of charging customers. This one is going to work incrementally, though. Again, the first step that I do is make a descriptive Name for my customers to see. Then, when it comes to the Action, I'm going to choose an Incremental Overage Amount. This carries a lot of flexibility with it because you can do things such as define what an increment is. An increment doesn't have to be just one item or one unit at a time. The fact that it's an overage amount allows you to set the Watch Value, which means that you can tell OnTime which field to look at and gather information from. It also opens up these fields over here on the right involving thresholds and ranges and places to start calculating at. Because I've chosen incremental, the first option I have is to choose what the increment is. Usually the default is going to be 1. In this case, I'm charging for weight. In the US, we're charging by pound, so this is going to be for every one pound I want to assess this charge.

How do we know what weight the customer put in? That's what the Watch Value does. It allows me to choose from several of the common fields that are on the order entry form and when the customer fills out the Weight field, in this case, it's going to be able to collect that information and use it as a variable in the calculation. Again, here is our Value field. This is going to be what our charge is to the customer, in this case, ten cents for every one pound. And then, on the right hand side, I can define the Range. By default, this may be 0 to None, meaning there is no range. But in this case, I wanted to finetune my pricing and only assess this additional weight charge if they go over 50 pounds. So, I'm going to give them the first 50 pounds included in the base price of the shipment, but anything over 50 pounds, I'm going to start charging for. So, I've defined a starting Range of 50 and, also as far as calculation is concerned, I want to Start calculating the charge at 50 pounds, as well. In some cases, if you were to set this, for instance at 0, once it crossed 50 pounds you could almost retroactively go back and charge them for that first 50, as well. There are some cases where that may be necessary.

So, we've set this up, let's give it a test. Again, we will use $100 as the base price and we will put in a Weight. Because this has a Range, let's try putting in something outside of the range first. Because it needs to hit 50, let's try putting in 25 pounds and testing. Notice how it alerts us that, in this case, the modifier would not apply. It would come back with a price of zero because it's not within the Range yet. Let's take this up to 100 pounds and test and now we get expected results. We can see, again, the arithmetic that's used to arrived at a $5 additional charge for this weight. That, again, is charging ten cents per pound for the 50 pounds we went over. Now, just illustrate how the increment could work depending upon how you want to scale things, let's say that we wanted to charge in increments of 10 pounds instead of per pound. In this case, I could just change the Increment to 10. But then notice what it does when we test the modifier: it drops our charge down to 50 cents. Because we scaled the increment up, we also need to scale the Value up. In this case, we'll want to change from ten cents up to $1. Now, if we test, we get that $5 charge again. For larger freight, you may need to use bigger brackets, so maybe you charge per 100 pound. In that case, we would change the Value to scale at $10. We'll test that and notice that we get a figure that reflects accurately the $10 charge for being at 100 pounds in that increment. So, that gives you an idea of the flexibility that can be applied when you're working with these Incremental Overage Amount modifiers. Again, all of these are also available in percentage based variants, so you have a lot of flexibility to do your pricing.

Let's take a look at one last example that describes how we can bring multiple modifiers together in a group. In this final example, we'll look at insurance and see how that can be used to illustrate this example of grouping modifiers. As we've seen in the previous examples, when you design a Price Modifier, it tends to do one specific calculation. However, if you have many of those, you can use them as building blocks to create more advanced and complex pricing schemes. I'm going to show you how to take two simple, individual modifiers and group them together to make them more complete as a final modifier. In this example of insurance, I have created two modifiers: one that describes the base price and one that describes the incremental, increasing price. So, let's take alook at the base price first: very simple, I want to charge $2 as a Flat Amount if the customer chooses insurance as an option. So, I choose Flat Amount and enter a $2 Value and that's all this is going to do. Now let's take a look at the second modifier describing the incremental or increasing amount. In this case, what I want to do is charge them $1.25 for every $100 that they declare in the Declared Value field and I've set a range on that to start at 100. What that means is that the base $2 insurance charge is going to cover the customer up to $100 of declared value, but as soon as they declare more than that, it's going to start charging $1.25 additional per 100 over and above. So, we have set this as an Incremental Overage Amount, we are looking at the Declared Value, we've set the Increment and the Ranges properly, so that is going to behave as we expect. Now, it would be awkward to present those two separate calculations to the customer, so ideally, we want to group those together and present them to the customer as one final modifier that they can work with. That's where this grouped modifier idea comes into play. To create a grouped modifier, all you need to do is right-click in the modifier list and choose New Group. I've already created one here, so let's take a look at that. Again, at the top I've given it a Name. Notice that I've given the other two slightly more descriptive names (Insurance - Base and Insurance - Incremental), but in this case I'm just naming it Insurance because I want it to be simple and clear to the customer. The customer's never actually going to see these other two, they're used behind the scenes. So, we are naming the one that they can see in a very clear way. Over here on the right, we have a list of all the modifiers that we've created. I've gone through this list and found Insurance - Base and Insurance - Incremental and dragged them from the right-hand list to the left. Incidentally, you can put as many modifiers in this group list as you would like. What OnTime will do is evaluate each of those modifiers one-by-one and then do whatever the Behaviour field tells it to. So, the Behaviour says Use the highest priced modifier, Use the lowest priced modifier, or take all of them and sum them up to give us the total. That's what we're doing in this case: Use the sum of all modifiers. When the Insurance - Base modifier is evaluated, it's always going to come back with that $2 flat price. The second is a different story, though, because it is incremental, it is based on a range (over $100 of declared value), and then depending on how far over, it's going to count that and assess $1.25. So, whatever this one ends up evaluating to, it's going to add that to the base. For instance, if we were to do an order of $150 Declared Value, then we could expect that to be a charge of $3.25 total for insurance. So, that's how the grouping would go to put these together to make more complex pricing. You can also put groups within groups, so you can carry this idea of grouping as far as you need to accomplish your pricing goal.

So, that covers setting up Price Modifiers. To put it all together and as a reminder, how do we take these modifiers that we've just built and get them back into the Price Set so that the customer has them available as levels of service. Again, to do that, go over to your Price Sets list, open up a Price Set, go to Price Modifiers, and then scroll down the list until you find the modifier that you've created and check it off to associate it with this Price Set. In this case, we have Insurance and we are turning it on by default. We have our Fuel Surcharge here, as well, which is turned on by default, but also a required field so that they can't take the surcharge off. As a final step, we want to make sure that the Price Set is associated with the appropriate customers. There are two ways to do that. The first way is from right here in the Price Set editor. Click Customers and check the customers that you want associated with this Price Set. But you can also do it from another perspective. If I close this and go to my Customers list and open up a customer, I can view it from the customer side and get a list of all of the Price Sets. Then I can check off the ones I want to be available to this customer, even setting one as a default. You'll notice this green checkmark. That indicates that it's the default Price Set: whenever a customer starts a new order, that one's going to be selected. To set a default Price Set for a customer, right-click it in the list and choose Set as Default Selection.

So, I hope that's helped explain how pricing works across OnTime logistics software. Again, it's a very flexible platform that you can use to accomplish virtually any type of pricing. If you have any questions on how pricing might work for your business in OnTime, please don't hesitate to call OnTime Customer Support. We're available and happy to help.

Thank you, thank you! Love you guys!

Justin Bergener | Medstar Cabulance, Inc.