Renewal Discounts for Long-Term Salesforce Customers

Renewal Discounts for Long-Term Salesforce Customers

• Salesforce may offer renewal discounts for loyal customers.
• Discounts vary based on contract length and customer relationship.
• Long-term agreements often secure better pricing.
• Regular negotiations can help reduce renewal costs.
• Bundled services may increase chances for additional savings.

Why Renewal Salesforce Discounts Matter

Salesforce is not cheap. Renewal time often brings sticker shock because the price can creep up each year. That’s why it’s crucial to know how to negotiate effectively.

Renewal discounts can:

• Lower Your Costs: Every percentage discount reduces your overall operating cost.
• Protect Against Price Hikes: Ensures you’re not paying more without a corresponding value.
• Solidify Value: This shows that Salesforce appreciates your long-term business.

An intelligent negotiation can save you thousands of dollars throughout a contract. Let’s jump into how you can make this happen.

Your Leverage as a Long-Term Customer

Your long-term relationship with Salesforce gives you leverage. They don’t want to lose you, especially since acquiring a new customer costs much more than retaining an existing one. Here’s how you can use your status to your advantage:

• Consistent Payment History: If you’ve always paid on time, remind them. It shows reliability, which is valuable to Salesforce.
• User Expansion: Have you added more users or products over time? Highlight this growth as a sign of your loyalty and willingness to invest in the platform.
• Long-Term Plans: Make it clear that you will continue with Salesforce at a reasonable price. This assures Salesforce they won’t lose your account if a fair deal is reached.

Timing Is Key

Regarding Salesforce renewals, timing matters; you don’t want to start negotiating at the last minute.

Here’s how you can get the timing right:

• Start Early: Ideally, begin the renewal conversation six to nine months before your contract ends. This gives you enough time to negotiate and Salesforce enough time to consider your requests.
• Use Fiscal Year-End to Your Advantage: Salesforce’s fiscal year ends on January 31. If your renewal period aligns with their year-end, Salesforce might be more motivated to offer discounts to meet their internal targets.
• Quarter-End Pressure: Salesforce reps often have quarterly sales targets. Negotiating close to the end of a quarter can work in your favor.

Benchmark Your Pricing

One key to negotiating effectively is knowing what others are paying. Salesforce pricing isn’t always transparent, but there are ways to get a ballpark idea:

• Talk to Industry Peers: Connect with other Salesforce users in your industry. Their insights can help you know if you’re overpaying.
• Consult Market Analysts: Firms like Gartner or Forrester provide pricing benchmarks that might help you understand if your renewal price is fair.
• Use Online Communities: Salesforce user groups and forums, such as Reddit or Salesforce Trailblazer Community, often share useful hints on pricing.

How to Present Your Case for a Discount

The way you ask for a discount matters. It would be best if you had a clear and compelling argument.

Here’s how to present your case:

1. Highlight Your History: Emphasize how long you’ve been a customer and the investments you’ve made.
2. Show Value to Salesforce: Mention the number of users, licenses, or added modules over time.
3. Compare Offers: If you’ve benchmarked and found better offers, mention them (without giving explicit competitor names, if possible).
4. Push for a Multi-Year Deal: Multi-year contracts can sometimes lead to better discounts because it ensures Salesforce of your long-term commitment.
5. Include Performance Issues: If you’ve faced problems like downtime or support issues, now is the time to bring them up. Frame it as part of your need for a discount to compensate for subpar service.

Read about discounts per company size.

Tactics to Get the Best Deal

Here are some specific tactics to use during the negotiation:

• Ask for More than Just Discounts: Think beyond just a percentage off. Ask for:
  • Additional Training Credits
  • Consulting Hours
  • Free Additional Users
• Bundle and Save: Salesforce has multiple products. Bundling tools like Salesforce Marketing Cloud or Service Cloud could help you get a better rate.
• Bring in the Customer Success Manager (CSM): If you have a good relationship with your CSM, use them to support your negotiation. CSMs are often more motivated to keep you happy than a sales rep.
• Mention Competitors: While you don’t need to switch providers, dropping names like HubSpot or Microsoft Dynamics can sometimes encourage Salesforce to be more flexible.
• Use Contract Clauses as a Bargaining Chip: Negotiate clauses like price caps on renewals (to prevent drastic future price hikes) or flexibility for scaling down users if needed.

Leveraging Your Customer Success Manager (CSM)

Your Customer Success Manager (CSM) is critical in the renewal process. The CSM’s primary goal is to satisfy you, and they can advocate for you internally. Here’s how to leverage their role:

• Engage Early: Involve your CSM in the renewal process from the beginning. Let them know you want to secure the best deal and explain your goals.
• Document Achievements: Work with your CSM to document how Salesforce has added value to your business. This will help you explain why continued partnership is mutually beneficial.
• Create a Win-Win Situation: Understand that your CSM benefits when customers renew successfully. Discuss how a renewal discount helps sustain the relationship, which benefits Salesforce.
• Involve the CSM in Escalation: If you’re having trouble getting the discount you want, the CSM can often escalate internally. They have different contacts within Salesforce and might be able to push on your behalf.

Emphasize Your Long-Term Potential

Salesforce is more likely to offer discounts if they see you as a long-term partner. Here’s how you can emphasize your potential future value:

• Highlight Planned Growth: If you expect your user base to grow, mention this. For instance, if you plan to double the number of licenses over the next two years, this suggests that Salesforce will earn more from you in the long run.
• Discuss Expansion into More Salesforce Products: Salesforce has a vast ecosystem, including Marketing Cloud, Sales Cloud, Service Cloud, etc. If you’re considering expanding into these areas, let them know. The more products you use, the more valuable you are as a customer.
• Showcase Your Industry Influence: If your company is a leader in its field, mention how your use of Salesforce influences others in your industry. This customer is often seen as valuable beyond just the direct revenue they bring in.

Multi-Year Discounts and Contract Flexibility

Committing to a multi-year contract is a powerful way to get a renewal discount. But before you agree, it’s essential to understand both the benefits and risks:

• Advantages:
  • Better Discounts: Multi-year deals often provide higher discounts as Salesforce sees a guaranteed revenue stream.
  • Price Stability: Agreeing on a multi-year term can help avoid sudden yearly price hikes.
• Potential Drawbacks:
  • Lack of Flexibility: You may be stuck if your needs change or a new, better competitor arises.
  • Inability to Scale Down: Multi-year contracts often come with minimum commitments that may be hard to adjust if your business contracts.

To protect yourself, negotiate flexibility in the contract. Here are a few things to include:

• Scalability Clauses: Make sure you can reduce the number of users without penalties if your needs change.
• Review Periods: Agree on periods during the contract where you can re-evaluate the pricing or terms.
• Termination Options: Ideally, a multi-year contract should have an exit clause for significant underperformance.

The Power of a Competitive Alternative

Bringing up competitors during your Salesforce negotiation can be a highly effective strategy.

However, it’s essential to do so correctly:

• Use Indirect References: Mention that you are exploring “alternative CRM solutions” without explicitly saying the name. This creates some ambiguity and pressure without being confrontational.
• Have a Realistic Backup Plan: If Salesforce does not meet your price expectations, what’s your alternative? Consider having a competitor proposal ready to share if necessary. Solutions like Microsoft Dynamics, HubSpot, or Zoho CRM could be suitable alternatives.
• Timing of Mentioning Competitors: Don’t mention competitors at the beginning of your negotiation. Wait until you get the initial offer from Salesforce and then leverage it by saying you must compare it to alternatives.

The Role of Usage Data in Negotiations

Usage data can be a powerful tool during your renewal negotiations. Showing Salesforce exactly how you use their tools can lead to better pricing.

• Showcase Active Engagement: If you have high levels of engagement with Salesforce products, use that as a bargaining chip. Highlight how deeply integrated Salesforce is in your day-to-day processes. This makes you a sticky customer that Salesforce won’t want to lose.
• Address Underutilized Features: If there are features you are paying for but not using, bring them up. You can either ask for discounts on these features or request that they be removed to lower your overall cost.
• Ask for Usage Reports: Sometimes, Salesforce reps can generate usage reports for you. Use these reports to demonstrate the impact of the product and justify why you deserve a better rate.

Bundling Salesforce Products for Greater Savings

Another smart tactic is to bundle multiple Salesforce products to increase savings. Salesforce offers a broad range of products that integrate well with each other:

• Sales Cloud and Service Cloud: If you use both, you can leverage them for a better deal on the overall package.
• Add Marketing Cloud: If your company wants to expand its marketing efforts, bundling Marketing Cloud with existing licenses can often result in discounts.
• Look for Promotions: Salesforce occasionally runs promotions for new products. Ask if there are any current deals for bundling additional products. This can give you more for your money.

Salesforce loves bundling because it deepens your dependency on its ecosystem, making it less likely for you to leave. Use this to your advantage to push for significant savings.

Negotiating Service and Support Add-Ons

Your Salesforce license isn’t just about access to software—it also includes service and support, which can often be negotiated.

• Free Training Hours: Many users underestimate the value of Salesforce training hours. Negotiating free or discounted training ensures your team can make the most of the platform, reducing the risk of underutilization.
• Premier Support: If you have Salesforce Premier Support, consider negotiating a discount or even reducing the level of support if you feel it’s not worth it. On the other hand, if you’re using standard support and experiencing issues, ask for a complimentary upgrade.
• Dedicated Account Manager: A dedicated account manager can improve response times and issue resolutions. During negotiations, see if this service can be added at no extra cost.

Involving Your Procurement and Legal Teams

If your company has procurement and legal teams, involving them can add significant weight to your negotiation.

• Procurement Expertise: Procurement teams are skilled in negotiation and have experience dealing with vendors like Salesforce. They can help push for better discounts and terms.
• Legal Oversight: Contracts can be tricky, and Salesforce agreements often include clauses that may not be favorable. A legal team can help identify problematic clauses, like automatic renewals or steep penalties, and negotiate better terms.
• Playing the “Bad Cop” Role: Sometimes it helps to play the “good cop, bad cop” game. You can position yourself as wanting to make a deal while the procurement team is tough on pricing. This can force Salesforce to compromise in your favor.

FAQ: Renewal Discounts for Long-Term Salesforce Customers

What are renewal discounts in Salesforce contracts?
Renewal discounts are price reductions or incentives offered to existing customers when they renew their Salesforce subscriptions. These discounts are typically aimed at rewarding loyalty and ensuring continued use of Salesforce services.

How do long-term contracts affect renewal discounts?
Long-term contracts often lead to better discounts. Salesforce values stability, so committing to two or three years can provide opportunities for reduced pricing or additional benefits.

Are discounts the same for all Salesforce products?
No, discounts vary depending on the product and its popularity. For example, Sales Cloud and Service Cloud might have different discount ranges than niche products like Tableau CRM.

Can loyalty alone secure a renewal discount?
Loyalty helps, but it’s not the only factor. Salesforce also considers the size of the account, contract value, and how much the customer relies on their services.

When should I start negotiating for a renewal discount?
Start negotiations at least three to six months before your contract expires. This gives you enough time to understand your needs and negotiate favorable terms.

Does Salesforce ever proactively offer renewal discounts?
Salesforce doesn’t always proactively offer discounts. It’s often up to the customer to initiate the conversation and ask for better terms.

Can bundled services lead to better discounts?
Yes, bundling multiple products under one contract often increases the likelihood of receiving discounts. For instance, adding Marketing Cloud to an existing Sales Cloud contract can lead to savings.

What role does usage data play in negotiations?
Usage data can help highlight the value your organization gets from Salesforce. Demonstrating consistent or growing use of their products strengthens your position during renewal discussions.

Are discounts negotiable for smaller businesses?
Smaller businesses can negotiate discounts by showing consistent usage and long-term potential. Highlighting plans for future growth and product expansion can also help.

How do promotional periods impact renewal discounts?
Salesforce often offers special pricing at the end of their fiscal quarters or during promotions. Timing your renewal during these periods can provide additional leverage.

Should I involve a third-party expert in negotiations?
Engaging a Salesforce licensing expert or consultant can be beneficial. These professionals understand Salesforce pricing models and can help secure favorable terms.

What if Salesforce refuses to offer a discount?
If a discount isn’t provided, emphasize your loyalty, compare competitor pricing, or propose adjustments to the services in your contract. Persistence and clear reasoning can often lead to a better outcome.

Can discounts apply to add-ons during renewal?
Yes, discounts may apply to additional products or features included in the renewal. For example, adding more user licenses or advanced features can sometimes lead to negotiated savings.

Are enterprise customers treated differently in renewal negotiations?
Enterprise customers often receive more favorable terms because of their larger contract values. However, with the right approach, smaller organizations can still negotiate effectively.

What documentation should I prepare before entering renewal discussions?
Have your current contract, service usage reports, and an understanding of your future needs ready. This information helps you make informed requests and avoid paying for unused services.