Adding or Removing Services at Salesforce Renewal
- Analyze Current Usage: Identify underutilized or redundant services
- .Align with Business Needs: Add features that support future goals.
- Request Scalable Options: Ensure flexibility for growth or downsizing.
- Evaluate Costs: Assess the financial impact of adding or removing services
- Confirm Compatibility: Verify changes align with existing Salesforce configurations.
Adding or Removing Services at Salesforce Renewal
Salesforce contracts typically have multi-year terms, often spanning one to three years. When the renewal date comes up, you can adjust services to better suit your needs.
This period offers an opportunity to align Salesforce services with your evolving business landscape. But there are key points to consider:
- Renewal Is a Negotiation Window: Unlike mid-term adjustments, renewals give you flexibility. Salesforce wants you to continue, so it’s a good time to push for favorable changes.
- Time Is Crucial: Plan at least 3-6 months before your renewal date. Late negotiations usually end up rushed, leaving less room for maneuvering.
- Align Services with Business Goals: Consider whether your current Salesforce setup matches your future business needs. Is there a new feature you need? Or maybe you want to get rid of some underused add-ons.
Why Companies Adjust Services at Renewal
Companies choose to add or remove services for various reasons. Let’s look at some of them:
- Growth and Expansion: Expanding businesses may need more Salesforce licenses, add-ons like CPQ (Configure, Price, Quote), or enhanced support.
- Cost-Cutting: If budgets are tight, cutting unnecessary licenses or unused features helps reduce costs.
- Changes in Strategy: A pivot in business direction might mean you no longer need specific Salesforce Clouds, such as Service Cloud or Marketing Cloud.
Common Scenarios and Practical Insights
Let’s dive into some typical scenarios and see how companies manage Salesforce renewals:
Scenario 1: Rapid Expansion
Business Context: Your company is expanding and hiring rapidly. The sales team is expected to double within the year.
- Needed Adjustments: Add more licenses and consider new tools for scaling operations.
- Negotiation Tips: Ask Salesforce for discounts based on volume. Use the promise of future growth as a bargaining tool. If they know you will expand next year, they may offer competitive pricing now.
Scenario 2: Budget Cuts
Business Context: Your company is undergoing budget cuts, and the focus is on reducing costs across all software services.
- Needed Adjustments: Assess which services are underutilized and remove them. Focus on eliminating redundant features.
- Negotiation Tips: Be firm with Salesforce. They will likely offer discounts to retain services. Stick to your plan and make sure any agreement is in writing.
Scenario 3: Strategic Repositioning
Business Context: Your company is pivoting to a new business model or shifting focus.
- Needed Adjustments: Remove services that no longer fit your strategy, like switching from Marketing Cloud to Sales Cloud.
- Negotiation Tips: Ask for repackaging options. Salesforce might allow you to drop some features while adding others without a major cost change.
Steps for Adding Services at Renewal
If your business is expanding and needs to add more services, here’s how to go about it:
1. Assess Your Needs
Before adding anything, start by understanding what exactly your business needs. This can be broken down into:
- Licenses: Do you need more user licenses due to team expansion?
- Add-Ons: Can additional functionalities, like Salesforce CPQ or Pardot, bring value?
- Support Level: Will upgrading to Premier Support help minimize downtime?
2. Evaluate New Salesforce Offerings
Salesforce frequently releases new features. Take time to explore:
- New Clouds or Features: Look at Salesforce’s latest solutions, such as Slack integration or Einstein Analytics.
- Ask for a Demo: Request a demo or a trial period to ensure that the new feature meets your needs.
- Stay Updated: Salesforce releases updates multiple times a year. Review release notes to see what’s new and whether these new features could benefit your team.
3. Bundling and Discounts
Adding services at renewal can be expensive. However, Salesforce loves bundling:
- Package Discounts: If you’re adding Marketing Cloud or another product, ask for a bundled discount.
- Multi-Year Commitments: Salesforce often gives incentives for multi-year deals. Be cautious, though—only commit if you’re sure it’s worth it.
- Consider Usage Scaling: Bundled pricing may benefit if your team grows. Multi-year pricing can ensure predictability, especially during a period of growth.
4. Negotiating Price
Negotiate for better pricing:
- Benchmark Pricing: Know what other companies of similar size are paying.
- Leverage Alternatives: Let Salesforce know that you’re considering other vendors. This can prompt better discounts.
- Volume Licensing: If you add many users, leverage that for per-user pricing reductions.
- Reference Past Contracts: Use previous agreements as leverage. Highlight areas where previous promises or commitments can benefit you now.
5. Trial and Adjustment
Don’t commit before you’re sure:
- Trial Period: Request a trial for new features if possible.
- Flexible Agreements: If the new feature doesn’t meet expectations, try including a clause allowing adjustments in the first few months.
- Pilot Programs: Run a pilot to test if the newly added service is adequate for your team before you scale up entirely.
6. Training and Onboarding
Adding new features may come with a learning curve. Plan for:
- Training Sessions: Ensure that your team receives adequate training.
- Salesforce Resources: Salesforce offers a range of free training materials through Trailhead. Leverage these for onboarding new features.
Steps for Removing Services at Renewal
Scaling back on services is sometimes crucial for efficiency. Here’s how you can effectively remove services:
1. Usage Assessment
Data Analysis is your best friend here. Look at:
- License Utilization: How many of your licenses are actively used?
- Feature Adoption: Are your teams using the features you’re paying for? Tools like Salesforce Optimizer can help you assess this.
- Gather Feedback: Talk to your teams and understand which features they are not finding valuable. User insights can help identify unnecessary costs.
2. Define What’s Not Needed
Decide which services to cut:
- Unused Licenses: Remove licenses for employees who no longer need them.
- Redundant Add-Ons: Check for duplicate features across different Clouds. For example, if you’re using an external email automation tool, do you need Pardot?
- Support Adjustments: If Premier Support is not fully utilized, consider downgrading to a more basic plan.
3. Prepare for Pushback
Salesforce may try to convince you to keep what you’re removing:
- Have Data to Back Your Decision: Show usage reports indicating that the feature is underutilized.
- Be Firm but Open: Explain why you need to remove certain features, but be open to renegotiating pricing or other perks.
- Anticipate Alternative Offers: Salesforce might offer alternative solutions. Be ready with your terms or reject them if they don’t align with your needs.
4. Renegotiate Terms
Reducing services doesn’t always mean reducing costs automatically:
- Avoid Flat Reduction: Salesforce might reduce the total cost by just a bit, even if you’re dropping major services. Ensure you negotiate a proportional cost reduction.
- Repackage the Agreement: Sometimes, it’s wiser to repackage your services. For example, cutting licenses but getting another useful add-on in return for a fairer total price.
- Use Future Commitments: If cutting services now, express your potential for future growth to encourage Salesforce to give you a better deal today.
5. Confirm Contractual Details
- Written Confirmation: Always get written confirmation of reduced licenses and costs to avoid billing surprises later.
- Clause for Future Changes: If unsure about completely removing a feature, include a clause that allows for potential reinstatement without additional negotiation.
6. Impact Assessment
- Impact on Teams: Assess how removing services will impact your workflows.
- Cross-Departmental Collaboration: Make sure all departments understand what changes are coming. For example, removing Marketing Cloud might affect both the sales and marketing teams.
Common Challenges in Adding or Removing Services
While the renewal process seems straightforward, you might face these common challenges:
1. Last-Minute Rush
Leaving changes to the last minute can hurt your chances of favorable terms:
- Salesforce Renewal Notice: Salesforce typically sends renewal notices 90 days in advance, but it’s best to begin sooner.
- Internal Delays: Get the necessary budget approvals well in advance.
- Plan Stakeholder Meetings Early: Gather input from stakeholders across sales, marketing, IT, and finance departments to avoid last-minute pushbacks.
2. Pushback from Salesforce
Salesforce will often resist reductions in services:
- Retention Strategy: Their goal is to retain as much revenue as possible. Be prepared to hear offers to keep services with a discount.
- Pushback Tactics: They may suggest that cutting licenses could affect the quality of support or services.
- Alternative Deals: Sometimes, Salesforce will offer a cheaper or scaled-down version of a service rather than completely removing it. Be prepared to make a firm decision.
3. Confusing Pricing Models
Salesforce’s pricing structure can be confusing:
- Add-On Costs: Adding a new feature doesn’t just add to your budget linearly—it could impact other connected systems.
- Lack of Transparency: Prices can be opaque. Make sure you get every detail in writing.
- Check the Fine Print: Understand the details surrounding pricing changes for additional features. These changes can have cascading impacts on other agreements or overall pricing.
4. Stakeholder Resistance
Sometimes the internal pushback is more challenging than Salesforce’s:
- Departments may resist cutting services they’ve grown accustomed to, even if usage is low.
- Engage Stakeholders early on. Have clear data points showing why cutting or adding services makes sense.
- Demonstrate ROI: Be ready to present the ROI of every change you propose—adding new services or eliminating costs.
Read how to conduct a cost analysis for your Salesforce renewal.
Tips to Master Adding or Removing Services
To handle Salesforce renewals with confidence, here are some pro tips:
1. Early and Proactive Planning
- Start Early: Don’t wait for Salesforce’s renewal reminder. Start planning 6 months out.
- Internal Needs Assessment: Work internally with stakeholders to understand what’s needed and what’s not.
- Scenario Planning: Create different scenarios of growth, budget cuts, and changing priorities to better prepare for discussions.
2. Get a Third-Party Consultant
- Expert Help: Consider hiring a Salesforce negotiation consultant. They understand the nuances and can help you get a better deal.
- Audit Your Usage: Consultants can help you audit your current Salesforce use, ensuring you only pay for what you need.
3. Consider Future Needs
- Scalability: Think ahead. Consider today’s needs and what your company may need in a year.
- Anticipate Growth or Downsizing: Whether your company is growing or downsizing, align your Salesforce needs to match. Prepare clauses in contracts that allow for adjusting service levels as required.
4. Prepare for Renewals Year-Round
- Ongoing Monitoring: Track your usage throughout the contract term. Knowing where you stand makes adjustments at renewal smoother.
- Continuous Feedback: Gather continuous feedback from users to assess the value of each service.
- Internal Review Meetings: Schedule quarterly internal meetings to review Salesforce use and plan for the upcoming renewal.
5. Leverage Salesforce’s Competitors
- Competitive Pricing: Let Salesforce know you’re evaluating other CRM solutions, such as HubSpot or Microsoft Dynamics. A competitive stance helps you get better pricing.
- Demo Other Solutions: Even if you don’t plan to leave Salesforce, demoing other solutions can help you understand your leverage and gain negotiation insights.
6. Document Everything
- Emails and Written Agreements: Keep detailed records of every communication with Salesforce. This helps track commitments made by the sales team and ensure they’re honored.
- Contractual Clauses: Ensure all negotiated terms are mentioned in the contract. Anything that’s verbally agreed upon should be reflected in writing.
Read our Salesforce Negotiation Check-list.
FAQ: Adding or Removing Services at Renewal in Salesforce
What is the purpose of adding or removing services during renewal?
Adjustments during renewal allow businesses to align their services with current needs, whether scaling up, reducing costs, or switching to new offerings. This ensures the contract reflects the customer’s evolving requirements.
How do I initiate changes during a renewal process?
Start by locating the renewal opportunity tied to the customer’s account. Open the opportunity, select the amend option, and use the provided tools to modify the product list, pricing, and contract terms.
What happens to the contract when I add new services?
When services are added, Salesforce updates the contract to include these items, recalculates pricing, and adjusts the billing terms. Your organization’s policies will determine any additional approvals required.
How can I remove unwanted services from a renewal?
Unwanted services can be deselected from the product selection screen. The system will adjust the pricing and terms accordingly, ensuring the revised contract reflects the changes.
Does Salesforce apply discounts to added or removed services?
Discounts depend on the pricing rules set in Salesforce CPQ. If volume discounts apply, they are automatically recalculated when services are added or removed.
Is there a specific order for adding and removing services?
While there’s no fixed order, removing unnecessary items is best. This ensures a clean slate for adding the required products or services without conflicts.
Can I make mid-contract adjustments or only during renewals?
Mid-contract adjustments are possible using the amend contract option, but these changes may trigger immediate billing updates. Renewal changes, however, take effect at the start of the new term.
What approvals are typically required for service modifications?
Approvals depend on your organization’s workflow rules. For example, adding high-cost services or applying large discounts often requires approval from the manager or finance team.
How can I verify that the changes were applied correctly?
Check the revised contract for accuracy. Confirm that the requested changes reflect the product list, pricing details, and billing terms. Generating a quote can also provide a preview of the final agreement.
What happens if I forget to remove a service during a renewal?
A service will automatically carry over into the new contract period if it is not removed. This can result in unwanted charges and may require a mid-term adjustment to fix.
Can Salesforce automatically suggest renewal changes?
Salesforce CPQ’s automation features can suggest changes based on usage history or customer preferences. For example, if a service was underutilized, the system might flag it for removal.
How do I ensure changes align with customer expectations?
Keep detailed notes from client meetings in Salesforce. To ensure alignment, use these notes to cross-check the requested changes with the final contract.
Does adding a service affect the renewal timeline?
Adding services typically doesn’t delay the renewal process unless approvals are needed. However, any pricing negotiations could slightly extend the timeline.
What reporting tools can track added or removed services?
Salesforce provides contract amendment history and reporting tools to track all changes. These reports can be filtered by account, opportunity, or service type.
Are there risks in removing services during renewal?
Removing services can impact the customer relationship if expectations are not communicated. Always ensure the client agrees to any reductions to avoid future disputes.
