Negotiating Custom Salesforce License Packages
- Know the client’s needs and tailor offers specifically
- Be clear on usage rights and limitations for each package
- Offer flexible payment terms to accommodate budgets
- Include an option for add-ons or upgrades
- Keep open communication for adjustments and feedback
- Ensure clear terms for renewals and revisions
Negotiating Custom Salesforce License Packages
Salesforce licensing can be a significant expense for organizations. However, as a Salesforce license negotiation expert, I can confidently say that securing a custom package is possible and a smart move to get the most value out of your investment.
This guide will take you through the essential steps to successfully negotiate a custom Salesforce license. This will ensure that your business only pays for its needs while getting maximum value.
Why Negotiating a Custom Salesforce License Matters
Salesforce licensing can be confusing, and opting for the default offerings without careful consideration can be costly. Custom license negotiations matter for several reasons:
Optimized User Access: Custom licenses allow you to provide the right level of access to different users. This ensures team members get what they need to be effective without overpaying for unnecessary features.
Cost Efficiency: Generic licenses often include features that may be redundant for your specific needs, leading to unnecessary expenses. Customizing your package ensures you only pay for features that matter to your business.
Better Fit for Your Needs: Every business is different. A tailored Salesforce license allows you to align features with your operational needs.
Step 1: Conduct a Detailed Needs Assessment
The first and most important step in negotiating a custom Salesforce license is understanding what your business needs. This involves:
Identify User Groups and Roles
- Sales Teams: Determine which features the sales team will need, such as lead management, opportunity tracking, and reporting.
- Support Teams: The Service Cloud might be necessary for your support staff, but does every support team member need a full license?
- Back-Office and Admins: Back-office personnel often require limited access. Instead of the more expensive Sales or Service Cloud licenses, platform licenses might suffice.
Example: Suppose your organization has a small finance team. They don’t need full CRM capabilities but still require access to some reports. In such cases, using Platform licenses instead of Sales Cloud licenses can help reduce costs significantly.
Evaluate Core Features Required
- Standard Features: What core features (e.g., lead management, case management) are essential for your operations?
- Add-Ons vs. Custom Build: Identify add-ons that could be valuable versus features that can be built in-house using Salesforce’s platform capabilities.
Tip: Track what features are being actively used. Salesforce is feature-rich, and you don’t want to pay for bells and whistles that don’t add value.
Predict Future Growth
Consider where your business is headed:
Geographical Expansion: Are you expanding to new locations or markets that might need localized Salesforce setups? Ensure you negotiate licenses that allow for seamless growth.
Scalability: How quickly will your team grow? Planning for future user licenses upfront can sometimes lead to better pricing.
Step 2: Understand Salesforce’s Pricing and Licensing Models
Salesforce pricing can vary greatly depending on the product and the type of licenses needed.
User-Based Pricing
Salesforce licenses are typically priced per user per month. Understanding the different types of licenses is key:
- Sales Cloud and Service Cloud: Designed for full users who need access to various CRM features. However, these licenses are the most expensive.
- Platform Licenses are best for users who do not need full CRM capabilities but require access to custom applications built on Salesforce.
- Community Licenses are ideal for customers, partners, or external users who need limited interaction with your Salesforce instance.
Example: If only 50 of your 100 employees need access to advanced CRM tools, you might negotiate 50 full Sales Cloud licenses and 50 Platform licenses instead.
Pricing Structures and Bundles
- Different Cloud Offerings: Salesforce offers multiple clouds (Sales, Service, Marketing), each with its pricing. You need to determine which clouds align with your business.
- Feature Add-Ons: Features like advanced analytics, AI capabilities (Einstein), or API integrations are typically considered add-ons and can increase costs.
- Discount Tiers: Salesforce often offers discounts based on the number of users or a longer-term commitment. Understanding this tiered structure can help during negotiations.
Step 3: Time Your Negotiations Effectively
Timing can greatly influence your success during the negotiation process.
- End-of-Quarter Leverage: like any sales-driven company, Salesforce has quarterly and annual targets. Reaching out during these periods can give you significant leverage, as sales teams are often more flexible in closing deals.
- Plan Around Contract Renewals: If you’re already a Salesforce customer, start discussing renewals months in advance. The threat of a switch to another CRM can lead to better terms.
Example: Initiate negotiations 3-4 months before your current contract expires to allow time for Salesforce to present its best offers and for you to compare options.
Step 4: Leverage the Competition
Salesforce is one of many CRM providers, and you can use competition as leverage in your negotiation.
- Benchmark Against Alternatives: Compare Salesforce to CRM platforms like HubSpot, Microsoft Dynamics, or Zoho. Highlight the value versus the cost Salesforce offers versus its competitors.
- Use Competitor Pricing as Leverage: Show Salesforce sales reps the competitive pricing and feature sets from other vendors. This pressure can encourage them to offer a better deal to retain your business.
Example: If HubSpot offers similar features for a lower price, use that information to request price matching or additional value from Salesforce.
Step 5: Negotiate Discounts and Custom Packages
Salesforce can be flexible if you approach negotiations strategically.
- Volume-Based Discounts: The more licenses you commit to, the better the per-user pricing. Even if you don’t need them immediately, planning for future expansion can lead to significant savings.
- Bundled Services: Ask about bundling different Salesforce clouds for discounts. Bundles often have a lower total cost than individual licenses.
- Add-On Negotiation: Negotiate for free or reduced-price add-ons like Salesforce Einstein or API access, especially if they will be critical to your success.
Example: Request a multi-year discount if you’re willing to commit for the long term. This helps Salesforce achieve more stability, and they often reward that commitment with reduced pricing.
Step 6: Manage Implementation and Support Costs
Implementation costs can make Salesforce much more expensive than anticipated if negotiated incorrectly.
- Free Training and Onboarding: Request training and onboarding services as part of your licensing agreement. Onboarding assistance can save you considerable time and costs.
- Dedicated Support: Ensure a dedicated Salesforce representative can assist your team during setup. This can be especially helpful for larger organizations with complex needs.
- Ongoing Support: Premium support can be included during negotiations. Ask for priority customer service or a free period of enhanced support.
Example: When signing up for the Service Cloud, ask for a complimentary set of training sessions so your customer support team can get up to speed faster.
Step 7: Build in Contract Flexibility
Locking in a long-term contract without flexibility can be risky. It’s essential to build flexibility into the deal:
- Reassignable Licenses: Negotiate the ability to reassign licenses as your team changes. If an employee leaves, you shouldn’t be stuck paying for a license you can’t use.
- Scaling Provisions: As your business grows, ensure your contract allows you to add more users at the original negotiated rate.
- Exit Clauses: Include clauses allowing you to exit the agreement early or reduce license counts if Salesforce doesn’t meet the agreed service levels or your business circumstances change.
Example: Request a clause that allows a reduction of licenses by 10% annually without penalty. This allows you to adjust for team size changes without extra costs.
Step 8: Consider Using a Salesforce Consultant
Hiring a Salesforce Negotiation Expert consultant can be beneficial if you have a significant number of licenses or complicated needs.
- Negotiation Expertise: Salesforce consultants are familiar with typical pricing models and discounts. They can help you get better rates by leveraging their experience.
- Customized Solutions: Consultants can identify the exact features your organization needs and build a customized solution, ensuring you only pay for what you use.
- Industry Benchmarking: A consultant often has access to industry standards and benchmarks, ensuring you’re not paying more than necessary compared to similar businesses.
Example: Hiring a consultant helped one of my clients reduce their Salesforce licensing cost by 20% simply by identifying redundant features and better understanding Salesforce’s negotiation patterns.
Step 9: Negotiate on Non-Monetary Factors
Remember, it’s not all about price. You can negotiate on many other points to improve your Salesforce experience.
- Free Sandbox Environments: Request additional Sandbox environments for development and testing. This is particularly useful if you plan to customize a lot.
- Training Resources: Ask for free on-site training or virtual training credits. This will ensure that your staff is well-prepared to use Salesforce efficiently.
- Upgrade Flexibility: Negotiate the ability to add or upgrade features without extra costs as your business needs evolve.
Example: If you plan to customize Salesforce heavily, getting two or three additional Sandboxes for free can make the development process much smoother.
Step 10: Pilot Programs and Trial Runs
Before committing fully, negotiate for a pilot or trial program:
- Extended Trial: Instead of the standard 30-day trial, ask for an extended trial to fully evaluate Salesforce’s fit with your business.
- Limited Implementation for Feedback: First, implement Salesforce in one department or location. Gather feedback and evaluate whether it will work well across the organization.
Example: One organization ran a three-month pilot with its sales department and used the feedback to negotiate additional customizations in its final agreement.
Step 11: Establish Metrics for Success
Salesforce should ultimately deliver value. Setting clear metrics helps hold the service accountable:
- KPI-Driven Clauses: Include KPIs in your contract. If Salesforce doesn’t help you achieve key metrics (e.g., increase in lead conversion, decrease in case resolution time), you should be able to renegotiate terms or exit.
- Regular Performance Reviews: Schedule regular reviews with Salesforce to ensure the platform continues to meet your needs. During these reviews, adoption rates and ROI will be assessed.
Example: If you’re using Salesforce to manage customer support, a key metric might be reducing the average response time by 20%. If Salesforce fails to help you meet this goal, you can renegotiate pricing or services.
Conclusion: Tips from an Industry Expert
Negotiating a custom Salesforce license package is about understanding your needs, knowing the market, and confidently approaching Salesforce.
Make sure you:
- Do your research on competitors.
- Understand the license types and customize your package.
- Push for flexibility in your contract.
- Leverage end-of-quarter timing to get the best deal.
- Consider a consultant if the negotiations become too complex.
Remember, Salesforce wants to keep you as a long-term customer, which gives you leverage. Don’t be afraid to ask for what you need, whether it’s more discounts, better terms, or more support. With the right approach, you can ensure Salesforce fits your needs today and as you grow.
FAQs
What are the main benefits of negotiating a custom Salesforce license package?
Negotiating a custom Salesforce license package helps you get the most value by tailoring licenses to your unique business needs. You avoid paying for unnecessary features and ensure that each user has the right level of access for their role.
How can I determine what type of Salesforce license my business needs?
To determine your license needs, conduct a needs assessment for each department. Different users (sales, support, finance) require different features. Evaluate each group’s needs to decide whether they need full Sales Cloud or lighter Platform licenses.
When is the best time to start negotiating a Salesforce license?
The best times are near the end of a quarter or fiscal year when Salesforce is trying to hit targets. Also, starting negotiations well before your contract expires gives you more leverage.
How can I use competition to my advantage when negotiating?
Research other CRM providers like HubSpot, Microsoft Dynamics, or Zoho. Presenting alternative pricing and feature comparisons to Salesforce shows that you’re considering other options, which can lead to better offers.
What kind of discounts can I ask for during negotiations?
You can ask for volume-based discounts for multi-year commitments or discounts when bundling multiple Salesforce services. The more licenses or services you commit to, the better your chances of getting a favorable discount.
Is it possible to negotiate implementation and support costs?
Always negotiate for free onboarding, training, or reduced support costs. Salesforce onboarding and premium support can be costly, so including these in the deal can save you significant money.
How can I ensure my Salesforce contract is flexible?
Negotiate clauses that allow license reassignment, adding users at the same rate, and exit options. These clauses protect you if your business changes, ensuring you aren’t stuck with services you don’t need.
What role can a Salesforce consultant play in negotiations?
A Salesforce consultant can help identify your needs, benchmark pricing, and provide negotiation insights. Their expertise can help you avoid pitfalls and save money on unnecessary features.
What are some non-monetary aspects I can negotiate?
Non-monetary aspects include Sandbox environments for development, training credits, extended support, or priority customer service. These extras can significantly improve your Salesforce experience without adding direct costs.
Is it possible to run a pilot program before committing to Salesforce?
You can negotiate an extended trial or a limited pilot to evaluate Salesforce’s fit with your business. This helps ensure that Salesforce meets your needs before a full-scale rollout.
How do I leverage Salesforce’s quarter-end sales cycle during negotiations?
Salesforce sales teams have quarterly and yearly targets. Approaching them at the end of these cycles increases the likelihood of better discounts and terms, as they’re more motivated to close deals to hit targets.
Can I negotiate add-ons for free or at a reduced price?
Yes, if you need specific add-ons like Salesforce Einstein or API integrations, negotiate to get them included for free or at a discounted rate, especially if they are critical for your operations.
What are KPIs, and how can they help during contract negotiations?
Key Performance Indicators (KPIs) are measurable goals, like lead conversion rates or customer response times. Including KPIs in your contract allows you to evaluate Salesforce’s performance. If KPIs aren’t met, you may have the opportunity to renegotiate terms.
How can I ensure that my Salesforce licenses align with my team’s changing needs?
Request flexibility in your contract to reassign or swap licenses if team roles change. This ensures you’re not wasting licenses and helps you adapt as your team evolves.
Can I negotiate for additional user seats at the original price?
Yes, negotiate a provision that allows you to add future users at the original rate you were offered. This is particularly helpful if you plan to scale your workforce and want predictable costs.
