Negotiating Salesforce Limited Use Licenses for Contractors

Negotiating Salesforce Limited Use Licenses Summary

• Assess contractor needs to avoid over-licensing.
• Engage your Salesforce Account Executive for discounts.
• Bundle Limited Use with full licenses for savings.
• Leverage competitor CRM pricing as a negotiation tool.
• Ensure licensing scalability for contractor flexibility.

What Is a Salesforce Limited Use License?

Salesforce is one of the most popular global customer relationship management (CRM) platforms, powering organizations of all sizes.

Managing Salesforce licensing can be particularly challenging for businesses with temporary staff or contractors, especially considering the high costs of full-user licenses. That’s where Salesforce Limited Use Licenses come into play.

These licenses can effectively and economically provide contractors with the necessary access while keeping costs in check. However, negotiating for these licenses requires strategy, preparation, and a clear understanding of Salesforce’s licensing terms.

This article will guide you through negotiating Salesforce Limited Use Licenses for contractors, covering key aspects such as understanding the licensing options, negotiation strategies, common pitfalls, and tips for effective contractor management.

Salesforce Licensing

Before diving into the negotiation details, it’s essential to understand the different types of Salesforce licenses. Salesforce provides a variety of licenses, each tailored for specific use cases.

Key Salesforce License Types

1. Full User Licenses: These licenses are for core users who need access to all of Salesforce’s features, such as Sales Cloud or Service Cloud.
2. Limited Use Licenses: Limited Use Licenses are ideal for users who need restricted access, such as contractors or temporary workers. They cost a fraction of the cost of full user licenses.
3. Community and Platform Licenses: These licenses provide even more limited access, allowing users to interact with specific parts of Salesforce, such as communities, portals, or custom apps.

Limited-use licenses are attractive for contractors because they provide tailored, reduced-cost access. The key is to determine which type fits the contractor’s needs without overprovisioning, which could lead to unnecessary costs.

Why Use Limited Use Licenses for Contractors?

Limited-use licenses are ideal for contractors who need access to Salesforce data but do not require the full functionality available to core staff members. Here’s why they can be advantageous:

• Cost Savings: Full Salesforce licenses are expensive, and contractors typically do not need access to all features. Limited Use Licenses offer a much more affordable option.
• Role-Specific Access: Contractors can be given specific access to only the parts of Salesforce they need, reducing costs and security risks.
• Flexibility: Limited-use licenses are often easier to scale up or down depending on the number of contractors, making them suitable for project-based hiring.

When Are Limited Use Licenses Applicable?

Not every contractor will need the same level of access. Consider these scenarios:

• Data Entry Contractors: They may only need access to input data into specific records, meaning a Limited Use or a Community license could suffice.
• Read-Only Users: A limited-use license is sufficient if the contractor only needs to monitor Salesforce data, such as leads or contacts.
• Sales Assistants: Platform licenses can work well for sales assistants who only need to update certain fields or records.

Read about how to negotiate Sandbox environments.

Preparing for Negotiation

Negotiating with Salesforce for Limited Use Licenses requires preparation. Here are the crucial steps to get started:

1. Assess Contractor Needs

Determine what type of access your contractors need. Over-licensing is common, especially when organizations aren’t clear about their contractors’ usage requirements.

• List Features Needed: Identify which Salesforce features each contractor requires. Does the contractor need to edit opportunities, or is simple view access enough?
• Identify Usage Levels: Will the contractor use Salesforce daily or only occasionally? Limited Use Licenses come in different tiers, and understanding usage patterns helps choose the right one.

2. Create a Usage Map

A usage map visually represents access needs, showing which features different contractors will need.

• Example: For a data entry contractor, the usage map might include access to Contacts, Accounts, and basic Leads while excluding Reports, Dashboards, and Campaign Management.

3. Estimate the Number of Licenses Needed

Quantify the number of contractors you need licenses for and categorize their expected level of access. This data will make negotiations more straightforward and help demonstrate why Limited-Use Licenses are appropriate.

Negotiation Strategies for Limited Use Licenses

1. Leverage Salesforce Relationships

When negotiating Salesforce licenses, relationships matter. Here’s how to leverage your existing relationship with Salesforce:

• Work Through Your Account Executive (AE): Engage with your Salesforce Account Executive. AEs have targets to meet and may be willing to provide discounts if it helps secure or expand your contract.
• Highlight Expansion Opportunities: Salesforce wants growth. If you plan to expand Salesforce usage, mention it as a potential point of leverage during negotiation.

2. Bundle Licenses

When negotiating, bundling licenses can provide opportunities for significant savings:

• Bundle Limited Use with Full User Licenses: If you are expanding your licenses for full-time employees, bundle Limited Use Licenses for contractors in the same deal. Salesforce is often more flexible when larger deals are involved.
• Negotiate Flexibility: Ask for flexibility in scaling up or down. If your contractor count changes month-to-month, ensure that your agreement includes the ability to adjust licensing as needed.

3. Compare with Competitor Pricing

Salesforce is a market leader, but they have competitors. Mentioning competitive offerings or price points can create opportunities for negotiation:

• Research Alternatives: Platforms like HubSpot, Zoho CRM, or even Microsoft Dynamics have competitive pricing models. This information can help Salesforce assess the risk of losing your business, leading to better terms.

4. Timing is Crucial

Salesforce’s fiscal year ends in January, and quarters end in April, July, October, and January. These are the times when AEs are most eager to close deals:

• Negotiate Near End of Quarter: You may get better deals towards the end of a quarter or fiscal year when Salesforce AEs are pressured to meet their targets.

5. Push for Custom Licensing Packages

If the standard Limited Use License doesn’t fit perfectly, don’t hesitate to ask for custom licensing options. Salesforce is sometimes willing to tailor licenses to meet unique needs, particularly for large accounts.

Common Pitfalls and How to Avoid Them

1. Over-Licensing Contractors

Many companies often default to providing contractors full user licenses because it’s the simplest solution. However, this can lead to substantial unnecessary costs.

Solution: Always evaluate access needs before assigning licenses. If the contractor only needs occasional access, Limited Use or even Community Licenses are likely more suitable.

2. Misunderstanding Licensing Terms

Salesforce licenses come with complex terms that often confuse businesses, particularly regarding which licenses allow what type of access.

Solution: Read and understand Salesforce’s licensing documentation, and don’t hesitate to ask your account executive to clarify anything that is unclear. You can also consult a Salesforce licensing expert for guidance.

3. Lack of Scalability

Sometimes, organizations buy a fixed number of Limited-Use Licenses without considering scalability. This can create issues when the contractor needs to fluctuate.

Solution: Negotiate upfront for scalability, ensuring that your licensing contract allows you to adjust the number of limited-use licenses based on your changing requirements.

Maximizing License Use for Contractors

To get the most value from Limited Use Licenses, consider these management strategies:

1. Role-Based Access Control (RBAC)

Role-based access control (RBAC) can help you effectively map contractors’ needs to the appropriate licenses.

• Define Roles for Contractors: Create specific roles in Salesforce that limit what contractors can access. This will prevent over-provisioning and help you assign the least costly licenses to those roles.
• Audit Access Regularly: Conduct audits of contractor accounts to ensure they aren’t accessing features beyond their assigned roles, which could result in compliance issues.

2. Train Contractors on Salesforce Use

Providing training to contractors can maximize their productivity while minimizing support costs:

• Focus on Efficiency: Train contractors on what they need to know, avoiding deep dives into features they won’t use. This keeps productivity high while reducing the learning curve.
• Highlight License Limitations: Make sure contractors understand the limitations of their licenses so they don’t inadvertently try to access restricted features, which can lead to errors and potential licensing issues.

3. Automate License Management

License management can be tedious, especially if you are managing a high turnover of contractors.

• Use License Management Apps: Apps like License Manager for Salesforce can help automate license provisioning and de-provisioning, track usage, and provide anomaly alerts.
• Deactivate Inactive Users: Regularly monitor contractor activity and deactivate users without access. This will help you free up licenses and optimize usage.

Case Study: Successful Negotiation of Limited Use Licenses

Consider a mid-sized marketing firm that employs contractors on a project basis to manage campaigns. Initially, they purchased Full User Licenses for each contractor, significantly increasing their Salesforce costs. After evaluating their needs, they determined that Limited Use Licenses would suffice for data entry, basic lead updates, and limited reporting.

Negotiation Approach:

• Usage Assessment: They conducted an in-depth usage assessment that demonstrated to Salesforce how contractors only needed minimal access.
• Leveraged Future Expansion: They indicated that as their business grew, they would purchase more licenses, which prompted Salesforce to provide a discount.
• Negotiated Flexibility: The firm negotiated flexible terms to increase or decrease licenses based on project needs, preventing the need to over-commit.

Outcome: The company reduced its Salesforce licensing costs by over 40% while maintaining productivity and managing contractor access without compromising capabilities.

Read about how to do a cost-benefit analysis for Salesforce licenses.

Key Takeaways for Negotiating Salesforce Limited Use Licenses

1. Assess Contractor Needs First: Don’t over-license contractors. Understand their actual access needs to determine the correct licensing model.
2. Engage Your Account Executive: Build relationships and leverage your Account Executive to get the best deals. Timing your negotiations to quarter or fiscal year-end can provide additional leverage.
3. Use Competitor Knowledge as Leverage: Mentioning other CRM options during negotiation may prompt Salesforce to offer better terms.
4. Bundle Licenses When Possible: Bundling Limited Use Licenses with full licenses can save costs.
5. Push for Scalability: Ensure your agreement is flexible, allowing you to adjust licenses as contractor numbers change.
6. Train Contractors to Maximize Efficiency: Ensure contractors understand their licensing limits and train them effectively to get the most out of their licenses.
7. Automate License Management: To optimize usage, use tools to automate license provisioning, de-provisioning, and tracking.

Negotiating Salesforce Limited Use Licenses FAQ

What are Salesforce Limited Use Licenses? They are lower-cost licenses designed for users like contractors who need restricted access to Salesforce rather than full-feature access.

When should I use Limited-Use Licenses for contractors? Use Limited-Use Licenses when contractors need limited access to Salesforce features, such as data entry or viewing specific records, instead of full functionality.

How can I assess contractor licensing needs? Determine which Salesforce features contractors need, their level of access, and their frequency of use to avoid over-licensing and assign the appropriate license type.

How can I negotiate with Salesforce for Limited Use Licenses? Engage with your Salesforce Account Executive, bundle licenses if possible, and emphasize potential future expansion to leverage better pricing.

What should I consider when bundling Salesforce licenses? When negotiating, bundle Limited Use Licenses with full licenses to get overall discounts. Larger bundles often lead to better negotiation outcomes.

How can I leverage competitor pricing during a negotiation? Research competitor’s CRM options like HubSpot or Zoho CRM and mention their pricing to demonstrate that you are considering alternatives, which may help secure better terms.

When is the best time to negotiate Salesforce licenses? The best times are towards the end of Salesforce’s fiscal quarter or year. Account Executives are more inclined to close deals and may offer better discounts.

Can I ask for custom licensing packages? Yes, Salesforce may be willing to create custom licensing packages, particularly if your contractor needs are unique or if your business is a significant client.

What are the risks of over-licensing contractors? Over-licensing leads to unnecessary expenses. Contractors may not need full-featured licenses, so you should match licenses based on the feature requirements.

How can I ensure scalability in Salesforce licensing? Negotiate upfront for scalability to adjust the number of licenses as contractor requirements fluctuate. This flexibility prevents the need to over-commit.

How do I ensure contractors maximize Limited Use Licenses? Define roles clearly and train contractors on license limitations to prevent attempts to access restricted features, which helps avoid confusion and support issues.

What tools can help manage Salesforce licenses? Tools like License Manager for Salesforce can automate provisioning and de-provisioning, help track license usage, and simplify management.

Is training important for contractors using Salesforce? Yes, training ensures contractors understand their access limitations and maximize productivity. It reduces support issues and improves user satisfaction.

How can bundling licenses reduce costs? Bundling Limited Use and Full User Licenses in a single deal often results in discounts, as Salesforce prefers larger deals and ongoing commitments.

Should I hire a Salesforce licensing expert for Salesforce negotiations? Hiring a Salesforce licensing expert can help secure favorable terms and avoid pitfalls if your licensing needs are complex or negotiations are challenging.