Understand the Difficulties of a Salesforce Negotiation

The enterprise Salesforce purchase is evolving. While savings for new purchases and renewals have been historically difficult to achieve, things are changing. As market competition grows, the vendor is exhibiting more flexibility at the Salesforce negotiation table – but only for buyers that know which levers to pull.

Enterprises have historically found it difficult to achieve savings on Salesforce purchases and renewals. This has largely been attributed to the vendor’s strong market leadership (thus leverage), cultish following, and impressive ability to lock in and expand its footprint in the enterprise. As a result, firm (and reasonably consistent) pricing and inflexibility at the negotiation table have been hallmarks of a Salesforce purchase or renewal.

But things are changing. NPI is seeing greater pricing disparity among the Salesforce deals it reviews. Above fair market value pricing and subpar discounts for new and add-on purchases, as well as implementation services, are trending. While this is bad news for many customers, it’s an opportunity for savings for those customers that come to the negotiation table prepared. Below, we explore nine ways you can cut costs during your next Salesforce negotiation.

Salesforce Negotiation: 9 Tips for Cutting Purchase & Renewal Costs

Benchmark pricing and discounts

While deal pricing from Salesforce has historically been fair, don’t assume you will continue to get a fair deal. Benchmark to ensure pricing is competitive.

Don’t assume growth assumptions are accurate.

Just as important as base pricing are Salesforce’s quantity growth assumptions and any unit price increases. NPI recommends strongly challenging any growth assumptions if they don’t match actual expected usage and proposed price increases depending on the length of the term.

Bring competitive solutions to the table.

It may be difficult to position feasible alternatives to Salesforce’s main CRM products, but other areas like Social Studio and Marketing products have real competition in the marketplace. Explore credible alternatives and deployment scenarios to apply leverage during a Salesforce negotiation.

Cap renewal increases.

Salesforce is notorious for price hikes at the end of any term. Be sure to cap increases during initial purchases to protect your business from this cost exposure at the end of your current agreement.

Shop third-party implementation providers.

There is no shortage of Salesforce implementation partners and pricing is all over the map. They’re highly motivated to win your business, especially when competitive pressure is applied.

Inspect usage and optimize subscriptions accordingly.

Companies often buy full-use licenses for users who would be better suited for a lower license profile. Define your unique usage requirements and align license types accordingly.

Don’t overbuy support, and explore third-party alternatives.

Not every Salesforce customer needs premier support. In fact, many find their needs can be met with a lower tier of support services. In some cases, customers have utilized third-party support providers to deliver comparable levels of service at a much lower price. Map your support requirements to Salesforce’s available programs, and always explore alternatives to premium options.

Identify potential areas of unanticipated cost and monitor closely.

Salesforce is eager to monetize all monitored inputs into its offerings. This includes stored data, number of objects, number of tabs and fields, etc. Unfortunately, customers often overlook this area of Salesforce costs leading to unanticipated five- and six-figure expenses.

Time purchases wisely.

Salesforce operates on a fiscal calendar that ends in January. The pressure on Salesforce reps to close deals by end of year or quarter varies from rep to rep. With this in mind, customers should sniff out how timing impacts their unique purchase/renewal event and act accordingly.

Why Negotiating with Salesforce is Difficult

The challenges faced by NPI clients during Salesforce renewal negotiations are a common concern among large enterprises. In a recent blog article by NPI, clients expressed frustration and uncertainty about effectively managing their Salesforce spend. The complexity of Salesforce licensing and cost management is comparable to other major enterprise vendors, such as Microsoft, Oracle, and SAP.

The challenges include limited visibility into product usage, dealing with multiple salespeople and inconsistent terms due to acquisitions, pressure to increase spending, and the difficulty of understanding pricing structures and negotiating effectively.

Fortunately, NPI offers specialized services to help clients optimize their Salesforce renewals, achieve significant cost savings, and improve their overall vendor relationship. To ensure a successful renewal process, NPI recommends starting the planning phase early, allowing ample time to secure favorable terms, competitive pricing, and a stronger partnership with Salesforce.

NPI Achieves Material Savings on Salesforce Transactions

NPI helps companies achieve material savings on Salesforce purchases and renewals. Our IT price benchmark analysis, licensing/subscription optimization and negotiation intel services help clients achieve savings like this: