Search

Five Tips for Negotiating Salesforce® Pricing


Tip # 1 Best Time to Negotiate

The Salesforce.com Calendar Year End is January 31st

  • As a publicly traded company, Salesforce wants to end each quarter strongly (April 30, July 31, October 31); there are many stories of aggressive pricing that transpired late at night on one of these critical dates.

  • During February, Salesforce realigns accounts; accounts can be assigned to new salespeople or realigned to new vertical, market or geographic segments.

  • In anticipation of the annual realignment, salespeople may be even more aggressive in their efforts to close a deal before January 31st.

  • Focus on obtaining your best contract terms by year end (Jan 31st) otherwise you may be working with a new sales team.

Tip # 2: Don’t Overbuy

Buy Only What You Need – You Can Always Add More Users

  • Salesforce favors enterprise-wide license adoption which often includes contracting licenses for future users (which may remain inactive for years).

  • To optimize your contract costs, create a detailed matrix of whom you anticipate the users to be - by department, business unit or geography – and on what date you anticipate on-boarding your users.

  • Salesforce may bundle additional product offerings; understand what is being bundled, how much it truly costs, and whether you need it - or if your users will ever even use these products.

Adding Licenses Later Gives You Leverage

  • You can always purchase additional licenses, but you cannot cancel contracted licenses.

  • Each time you purchase additional licenses, you have negotiating leverage with Salesforce which can also be used to purchase additional products.

You Will Learn About Your Users Only After They Start Using Salesforce

  • Certain users will rarely log in; other users will use very limited functionality. For example, customer service users may prefer their legacy systems; finance users may run reports only quarterly or annually. Consider a single department user as these situations present themselves, as opposed to purchasing licenses for everyone.

Tip # 3: Consider Less Expensive License Types

There are Many Less Expensive License Types

  • Salesforce Enterprise (now called Lightning Enterprise®) is the most common subscription.

  • Professional Edition (now called Lightning Professional®) is approximately 50% of the cost of a full Enterprise license and may be adequate as you start out.

  • Force.com® licenses are dramatically less expensive - they are not full Salesforce licenses - but offer limited functionality which can be expanded over time.

  • There are also of Force.com licenses. Users who don’t require access Accounts or Contacts can benefit from Force.com licenses.

  • Partner Licenses offer very similar functionality to full Salesforce Licenses but at a drastically reduced rate.

Buy International Licenses from Your USA Salesperson

  • Salesforce licenses purchased outside the USA are normally priced higher than those for USA customers.

  • Consider including these potential international users in your license count for your overall purchase. This will increase the total license count for your negotiations, as well as eliminate the foreign mark-up your subsidiary might pay if they buy in their own country.

  • All Salesforce Enterprise licenses offer translation and localization capabilities, so you can deploy these licenses purchased in the USA, elsewhere.

Tip # 4 Pay Attention to Renewal Terms

Three or Five Years May Seem Like a Long Way Off

  • Salesforce encourages multi-year agreements in exchange for the most favorable pricing terms.

  • Include language regarding the anticipated renewal price you intend to pay when that day comes.

  • Ask for a renewal clause that renews your existing subscription at the current price, if you are renewing the same, or a greater number of users.

Consider a Renewal on Other Items Initially Negotiated

  • If the initial agreement includes additional products and services, negotiate renewal pricing on those items as well. Ask for conference passes to be part of the renewal , not just in the initial year of the renewal.

Tip # 5 Protect Yourself from Unexpected Charges

Storage is Not Unlimited

  • Salesforce has storage limits. If you exceed your allotted storage, you could be facing additional annual costs that could be in the five-figures.

API Calls are Not Unlimited

  • API calls are limited each 24-hour period. Information from a third-party ERP systems, could exceed the API limit if it is too low, presenting you with additional charges later.

  • Ensure you accurately calculate your storage and API needs when you first purchase Salesforce to save additional charges later as the data in the system accumulates.

Sandboxes

  • There are many types of Sandboxes; Full, Partial or Developer Sandboxes may incur additional fees.

  • Never assume the standard Sandbox provided will have all the functionality you will need.

  • You may require a Full or Developer Sandbox later, and you will be facing additional charges.

Ask for a List of All Salesforce Products Offered

  • Storage, APIs, numerous Sandbox types, Event Monitoring, certain HIPAA or PCI data encryption protocols, - these are a few examples of products and services offered by Salesforce.

  • Many products will not be presented to you during your initial purchase negotiations.

  • If you don’t know what to ask for, ask for a list of all products and services Salesforce offers (and could potentially charge you for) before you sign the initial agreement. Review the full product list carefully to determine items or services you may need later.

Finally, your best negotiation tool when purchasing or renewing Salesforce is to have them truly believe that alternative CRM systems are a real consideration. You will create leverage if you communicate during your negotiations that you are ‘piloting’ or using alternative CRM systems. In addition, telegraphing that certain key individuals inside your company prefer Microsoft® or Oracle® products will send a message to the Salesforce representative that there are alternatives you may truly purchase.

Disclaimer:

The views and opinions expressed in this article are those of the authors and do not reflect the official terms, conditions, license or other restrictions and policies which may be dictated to a customer by Salesforce.com, Inc. or related vendors. Readers are advised that terms, conditions and pricing can change or vary in each situation. Examples cited in this article are only examples. They should not be utilized in real-world situations as they are based only on limited and dated open source information. Salesforce, Salesforce.com, AppExchange, Sales Cloud, Marketing Cloud, Service Cloud, Lightning, Lightning Enterprise, Lightning Professional, Force.com, Pardot, Salesforce CPQ, Salesforce Engage, Salesforce IQ, One App & Dreamforce are trademarks of Salesforce.com Inc. Outlook is a trademark of Microsoft Corporation.

© 2017 Snowforce, LLC. All Rights Reserved - May 2017


12 views

Recent Posts

See All

All Rights Reserved

Salesforce, Salesforce.com, AppExchange, Sales Cloud, Marketing Cloud, Service Cloud, Chatter, and others are trademarks of Salesforce.com Inc.