Steps to Change or Adjust Salesforce Contract Terms

Steps to Change or Adjust Salesforce Contract Terms

• Review Existing Contract: Identify terms to adjust.
• Consult Salesforce Account Manager: Discuss proposed changes.
• Evaluate Impact: Assess changes in pricing and service.
• Draft New Terms: Include necessary updates.
• Seek Approval: Get internal and Salesforce agreements.
• Amend and Sign: Finalize the new contract.

Steps to Change or Adjust Salesforce Contract Terms

1. Assess Your Current Usage and Needs

Before making any changes, you must comprehensively understand your current contract and how well it aligns with your business requirements.

• Review Contract Terms: This will help you understand key terms such as license types, number of users, service level agreements (SLAs), and renewal periods.
• Audit Your Usage: Identify the licenses or features that are underutilized or no longer needed. Salesforce can come with modules your company may not use fully, leading to unnecessary expenses.
  • Example: Suppose you purchased Salesforce Sales Cloud and Marketing Cloud, but your marketing team rarely uses the Marketing Cloud. It’s crucial to identify such discrepancies.
• Engage Stakeholders: Talk to different departments that use Salesforce. Do they need more user licenses? Are there tools that no longer serve their purpose? Gather input so you understand exactly what should change in your contract.

2. Renewal Dates and Contractual Leverage

Timing is essential when negotiating or changing Salesforce contract terms.

• Know Your Renewal Window: Salesforce contracts often come with automatic renewal clauses. Familiarize yourself with these dates to prepare to negotiate before the renewal.
  • Example: If your contract renews in March, start discussions with Salesforce at least three months before gaining leverage.
• Look for Contract Flexibility: Identify terms open to adjustments, such as annual commitments, subscription types, or pricing tiers.
• Evaluate Cancellation Clauses: Understanding how and when to exit or modify your agreement will strengthen your negotiating position.

3. Benchmark Your Pricing

To negotiate effectively, it’s essential to understand how your pricing stacks up against others.

• Compare with Industry Peers: Find out what others in your industry pay for similar services. Ask them about their deals if you have connections with other Salesforce users.
• Use External Consultants: Experts or consulting firms specializing in Salesforce licensing can help you benchmark prices.
  • Example: Suppose you’re paying $150 per license per month while others in your industry are paying $120. This gives you grounds to negotiate for a reduction.

4. Draft a Proposal for Contract Changes

Once you’ve gathered the relevant information, it’s time to prepare your proposal for changing the contract.

• Prioritize Your Changes: Identify the key modifications you want, such as reducing licenses, modifying SLAs, or changing product subscriptions.
  • For example, removing it from your agreement might save costs if you no longer need Marketing Cloud.
• Justify Your Changes: Be prepared to present your case. Provide data on current usage, show which features or licenses are underused, and quantify the potential savings.
  • Example: “We want to reduce our Marketing Cloud licenses from 50 to 10 due to low engagement metrics, resulting in an estimated saving of $50,000 annually.”

5. Engage with Your Salesforce Account Executive

Salesforce representatives are open to contract negotiations, but how you approach the conversation can make a difference.

• Set Up a Meeting: Arrange a formal discussion with your account executive about your business changes and the need to adjust the contract.
• Negotiate Multiple Items: Salesforce negotiations often involve a give-and-take approach. Bundle several contract adjustments to maximize your leverage.
  • Example: “We’d like to reduce Marketing Cloud licenses, but we’re interested in increasing Sales Cloud licenses at a discounted rate.” This trade-off can increase your chance of success.
• Highlight Long-Term Value: Emphasize that you’re looking for a long-term partnership. This approach may make Salesforce more open to adjusting contract terms if they see continued business from you.

6. Use Available Tools to Get the Best Deal

• Salesforce Concierge and Support Plans: Salesforce has support structures like Premier Success and Concierge services. Leverage these to request better pricing or free additional services.
  • Example: If you’re already on a Premier Success Plan, try negotiating for free access to specific training modules as part of the renewed contract.
• Volume Discounts: If your user base grows, ask for volume-based discounts. Salesforce might offer a lower rate per user if your license requirements increase significantly.
• Free or Discounted Add-Ons: During negotiations, inquire about additional features or modules that could be added to your current package at no extra cost or at a reduced rate.
  • Example: If you are considering adding the Salesforce CPQ (Configure, Price, Quote) module, ask if it can be included as a value-add for renewing your existing contract.

7. Involve Legal and Procurement Teams

Contractual changes involve legal intricacies that should not be ignored.

• Engage Legal Experts: Have your legal team review any proposed changes carefully. They can help spot restrictive clauses or language that could negatively affect your company.
  • Example: A cancellation fee or specific product bundling requirements could become a hindrance later.
• Coordinate with Procurement: If you have a procurement team, involve them in discussions. They are often skilled in vendor negotiations and can help secure a better deal.
• Consider Risk Mitigation Clauses: Ask your legal team to include risk mitigation clauses that protect your organization in the event of service outages or unmet SLAs.
  • Example: Adding a clause that provides financial compensation if Salesforce fails to meet the agreed SLA can help ensure accountability.

8. Consider Third-Party Licensing Consultants

If you find the process challenging, consider using a third-party consultant specializing in Salesforce contracts.

• Licensing Optimization: Consultants can help identify the licenses needed, reducing excess and optimizing costs.
  • Example: A consultant might help you switch some licenses from full CRM access to a cheaper read-only option if some users don’t need full access.
• Negotiation Support: Consultants are familiar with standard Salesforce discount practices and may know how to get price reductions or added services.
• License Type Evaluation: Consultants can help you evaluate the most cost-effective license types for your use case, such as whether your users need a full or platform license.
  • Example: Switching some users to the more economical “Platform Starter” license could significantly reduce costs.

9. Negotiation Tips for Success

Here are some quick tips that can improve your negotiation experience:

• Avoid Last-Minute Negotiations: Always begin negotiations early. This prevents you from having to accept unfavorable terms due to time constraints.
• Be Willing to Walk Away: Salesforce needs customers as much as you need them. Be ready to cancel unnecessary features or even explore alternatives if negotiations don’t go your way.
• Document All Agreements: Any verbal agreement should be documented in writing. Ensure all agreed-upon terms are documented in your contract or as a supplement.
  • Example: If Salesforce agrees to a 15% discount on specific licenses, ensure this is written in the updated contract.
• Bundle Negotiations: When negotiating, bundle multiple aspects into a single conversation. For instance, simultaneously discuss license reductions, support upgrades, and renewal terms to create a more compelling package.
• Stay Informed About Salesforce Product Updates: Salesforce releases new products and features periodically. Stay updated on these changes, as they could be beneficial leverage during negotiations.
  • Example: If Salesforce introduces a new feature that overlaps with another product you are using, you could negotiate to replace your existing subscription with the newer feature, potentially reducing overall costs.

10. Monitor Performance and Adjust Periodically

After the new contract terms are in place, don’t let things sit idle until renewal time.

• Review Usage Quarterly: Set a schedule to review Salesforce usage and compare it against your contractual commitments. This practice helps in making adjustments at the right time.
• Keep Track of New Features: Salesforce frequently rolls out new features and modules. Some may benefit your team, while others may become redundant over time.
  • Example: If Salesforce rolls out a new AI-based analytics feature that would replace your existing analytics, this could be a point for renegotiation.
• Identify Growth Opportunities: Monitor how your business needs to evolve and align them with Salesforce’s offerings. If your company expands into new areas, identify the Salesforce modules that support those new directions and negotiate terms accordingly.
  • Example: If you expand into customer service, consider adding Service Cloud licenses and negotiating a package that reflects your commitment to Salesforce as a long-term partner.
• Track Contractual Commitments: Ensure you’re meeting any volume or license commitments in the contract to avoid penalties or surcharges. If you’re not meeting them, consider renegotiating these terms beforehand.

11. Building Internal Support for Negotiations

To ensure successful contract adjustments, you need the support of your internal teams.

• Involve Department Heads: Department heads are Salesforce’s end-users. Their insights on what’s working and what’s not are valuable for making informed negotiation decisions.
  • Example: The sales department might be using Sales Cloud effectively, while the service department finds Service Cloud underwhelming. Knowing this can help you adjust your service levels appropriately.
• Create a Unified Front: Ensure all internal stakeholders are aligned when presenting to Salesforce. Disjointed communication can weaken your negotiation position.
  • Example: If your procurement team wants to cut costs, but your IT team wants to expand features, coordinate to present a coherent negotiation goal.
• Quantify Business Impact: Show how the current Salesforce setup affects business performance. Use metrics like license utilization rates, system downtimes, or service bottlenecks to justify the requested changes.
  • Example: “Reducing unused licenses will improve cost-efficiency by 15%, directly impacting our IT budget.”

12. Evaluating Alternative CRM Options

Sometimes, it’s wise to evaluate what else is available in the market to gain leverage. Salesforce competitors may provide comparable features at a better price point.

• Conduct Market Research: Explore other CRM solutions, such as Microsoft Dynamics, HubSpot, or Zoho CRM. Understand what alternatives offer and at what cost.
  • Example: If a competitor offers similar features at a lower cost, use that as leverage in your negotiations with Salesforce.
• Request Salesforce to Match Offers: Once you have competitor pricing, bring it to Salesforce. They might offer discounts or additional features to retain your business.
  • Example: “We’ve received a quote from HubSpot that offers similar features for 20% less. Can Salesforce match this pricing or provide additional value to justify the higher cost?”
• Highlight Switching Costs: While evaluating alternatives, calculate the cost of switching from Salesforce to another CRM, including data migration, training, and potential downtime. Use these insights to push for better terms while emphasizing your preference to stay with Salesforce if conditions are improved.

Read the Salesforce renewal case study.

FAQ: Steps to Change or Adjust Salesforce Contract Terms

What are the first steps to take when considering Salesforce contract changes?
The process begins with reviewing your existing contract. Understand the key terms, including license counts, renewal dates, pricing models, and termination clauses. Once you know your current position, identify the specific adjustments you need, such as increasing user licenses, adding features, or renegotiating pricing.

How do I contact Salesforce to initiate contract adjustments?
Reach out to your Salesforce account manager or customer success manager. They are your primary point of contact and will guide you through the process. To start discussions, clearly communicate your needs and provide a detailed list of the requested changes.

Can contract adjustments affect my current pricing?
Yes, adjustments can impact pricing. Adding features or licenses usually increases costs, while removing services might not always lead to savings mid-term. Salesforce evaluates changes based on usage and future commitments, so be prepared to negotiate pricing.

Is it possible to reduce licenses mid-term?
Reducing licenses during a contract term is rare. Salesforce typically locks in commitments for the entire duration. However, you can negotiate reductions or other changes during renewal periods, which is often more flexible.

How can I negotiate better terms when adjusting a contract?
Timing is critical. The best opportunity for negotiation is during renewal discussions. Highlight your business value to Salesforce, such as increased product adoption or the potential for long-term growth, to secure better terms like discounts or additional support.

What internal steps should I take before adjusting my contract?
Ensure alignment with your internal stakeholders, including finance, IT, and legal teams. Gather data to justify the requested changes, such as usage metrics or business growth forecasts, and secure internal approvals to avoid delays during negotiations.

How do I handle the review process for a new or amended contract?
Thoroughly review all terms in the updated contract, focusing on pricing, license counts, service levels, and renewal dates. Before signing the agreement, involve your legal team to confirm compliance and alignment with your organization’s interests.

What happens if Salesforce rejects my proposed adjustments?
If Salesforce declines your request, seek alternatives. These could include phased adjustments, bundling products, or preparing for a comprehensive renegotiation at the next renewal. If needed, escalate the issue to higher management within Salesforce.

How long does it take to adjust a Salesforce contract?
The timeline varies but typically ranges from two to four weeks. Complex changes may take longer, such as transitioning to new products or negotiating multi-year agreements. Start the process early to avoid disruptions.

Can I add new products or features during a contract term?
Yes, adding new products or features is usually straightforward. These changes often come with additional costs, so discuss pricing and terms with your account manager. Ensure that the new additions align with your business goals.

What should I know about adjusting service levels?
Changes to service levels, such as upgrading to premium support, often involve renegotiation and increased costs. Clearly define your expectations and ensure these changes are explicitly outlined in the revised contract.

Do I need legal assistance during the adjustment process?
Legal counsel is recommended, particularly for significant changes or multi-year agreements. A legal expert can help review terms, identify potential risks, and ensure the updated contract aligns with your business goals.

What should I do to prepare for contract renewal negotiations?
Start planning well—at least six months before the renewal date. Review your current usage, identify areas of over- or underutilization, and prepare a list of desired changes. Use this opportunity to negotiate better terms or pricing.

What are the risks of not adjusting your contract in time?
Adjusting your contract before the renewal deadline can lock you into unfavorable terms for another term. This could include paying for unused licenses or missing opportunities to add features critical to your business.

How should I store and track my Salesforce contracts?
Store contracts in a centralized repository, such as a contract management tool. This ensures easy access and lets you proactively track critical dates, such as renewal periods, to plan adjustments or renegotiations.