Salesforce Volume Discounts for Large Enterprises
- Discounts depend on contract size, license quantity, and term length.
- Long-term contracts often qualify for higher discounts.
- Enterprise customers can negotiate for custom pricing.
- Adding more Salesforce products increases the likelihood of discounts.
- Salesforce Account Executives handle pricing negotiations.
- Bundling services or committing to larger volumes can lower costs.
What Are Salesforce Volume Discounts?
Volume discounts are special pricing arrangements that Salesforce offers to large organizations purchasing licenses in bulk. The more licenses you buy, the lower the per-license cost.
Salesforce incentives like these are designed to reward large-scale purchases and help companies optimize their CRM investments. Volume discounts can significantly lower enterprises’ Total Cost of Ownership (TCO).
Key points about volume discounts include:
- Discounts depend on the number of licenses purchased.
- Enterprises have more negotiating power due to their purchase scale.
- Additional services and features can sometimes be bundled into the deal for cost efficiency.
Understanding how to negotiate these discounts effectively is crucial for large enterprises to avoid overpaying.
Factors That Influence Salesforce Volume Discounts
Salesforce pricing isn’t one-size-fits-all. Several factors can influence the discounts your enterprise might be eligible for:
1. Number of Licenses
- Bulk Discounts: Buying more licenses usually translates to better discounts.
- Example: Purchasing 500 licenses will likely bring a higher discount than buying just 50.
2. Contract Length
- Longer Commitments: Committing to Salesforce for a longer period (e.g., a 3-5 year contract) often means deeper discounts.
- Example: A 5-year commitment might yield a 20% discount, compared to a 10% discount for a 1-year term.
3. Product Bundles
- Multi-Product Deals: Purchasing multiple Salesforce products (like Sales Cloud, Service Cloud, and Marketing Cloud) can unlock better pricing.
- Example: Bundling Sales Cloud and Marketing Cloud might get you a better deal than buying them separately.
4. Salesforce Edition
- Different Salesforce editions (Essentials, Professional, Enterprise, or Unlimited) have different price points and discount structures.
- Example: Larger enterprises often opt for the Enterprise or Unlimited edition for scalability, giving them more leverage during negotiations.
5. Timing of Purchase
- Quarter-End Deals: Salesforce has strong incentives to close deals by quarter-end, making this a great time to negotiate discounts.
- Example: Negotiating your contract in late June or December might increase your chances of getting a discount.
6. Relationship with Salesforce Account Managers
- Leverage the Relationship: A good rapport with your Salesforce account manager can make a big difference.
- Account managers often offer additional discounts or perks to keep your business satisfied and loyal.
7. Competitive Landscape and Negotiation Power
- Competing Solutions: Understanding your options helps you gain leverage. Salesforce knows it competes with other CRMs like Microsoft Dynamics or HubSpot, which can give you an edge in negotiations.
- Example: Letting Salesforce know that you’re evaluating other CRMs can push them to offer better discounts.
8. Regional Factors
- Location-Specific Pricing: Salesforce may offer different pricing based on geographical regions. Larger enterprises with global footprints can use this factor to their advantage by negotiating based on regional price variances.
- Example: If you’re based in multiple regions, you can ask for a consolidated discount that averages regional price differences.
9. Previous Purchase History
- Customer Loyalty: If you’ve been a Salesforce customer for years, you may have built up customer loyalty points that could help you negotiate discounts on future purchases.
- Example: A long-standing customer with a good payment history could ask for loyalty discounts for the next product bundle they want to buy.
Strategies to Maximize Volume Discounts
Securing a great deal on Salesforce licenses requires a solid plan. Here are key strategies for large enterprises:
1. Be Transparent About Your Needs
- Be upfront about your needs. If your company plans to grow or integrate more teams into Salesforce, let them know.
- Example: “We anticipate needing 300 more licenses over 18 months. What volume discount can we get now if we commit to this growth?”
2. Bundle Products for Greater Discounts
- If your organization needs multiple Salesforce products, bundle them together in negotiations. Salesforce will be more willing to discount bundles because it locks you into a broader ecosystem.
- Example: Negotiating Sales Cloud, Service Cloud, and Analytics together rather than one at a time can get you better discounts.
3. Plan for the Long Term
- The longer you can commit, the better. Salesforce is more willing to negotiate volume discounts for enterprises making multi-year commitments.
- Example: If you’re confident about Salesforce as your CRM, aim for a 3-year term rather than a yearly contract.
4. Use Benchmarking
- Compare Salesforce pricing with similar CRM solutions like HubSpot, Microsoft Dynamics, or Oracle CRM. Use these comparisons to make a case for a discount.
- Example: “Based on our assessment, your competitor is offering us a 25% discount. Can you match or beat this?”
5. Engage in Quarter-End Negotiations
- Salesforce’s financial quarters are when its sales teams are most motivated to close deals. To gain more leverage, aim to finalize contracts during these periods.
- Example: Revisit stalled discussions in June, September, or December for maximum discounts.
6. Negotiate for Additional Benefits
- Training: Ask for additional user training as part of the contract. Salesforce training can be costly if purchased separately.
- Premier Support: Request Premier or Signature Support plans for your deal.
- Implementation Credits: If you’re new to Salesforce, you may need help with implementation. Negotiate for implementation credits to reduce the setup costs.
7. Leverage Existing Relationships
- If your company already has a strong vendor relationship with Salesforce, leverage this during negotiations. Account managers are more likely to provide significant discounts to loyal clients.
- Example: Highlighting your satisfaction with previous products and services can be a reason for Salesforce to retain you by offering better discounts.
8. Evaluate Usage Needs Continuously
- Evaluate your Salesforce usage periodically to ensure you aren’t paying for unneeded licenses. Salesforce’s pricing scales based on the number of users and features, so avoid paying for unnecessary items.
- Example: If you realize that half of the features included in Unlimited Edition aren’t being used, you could renegotiate for a downgrade to Enterprise Edition.
Common Mistakes Enterprises Make in Salesforce Negotiations
Getting a favorable deal with Salesforce takes more than knowing the discount factors. Here are common pitfalls and how to avoid them:
1. Not Reviewing Contract Renewal Terms Carefully
- Salesforce contracts often include automatic renewals, sometimes with price increases. Always negotiate the renewal terms upfront.
- Avoidance Tip: Ensure that future price increases are capped or negotiated as part of the original agreement.
2. Overlooking License Optimization
- Sometimes, enterprises overbuy licenses and end up with unused ones. This is a costly mistake.
- Avoidance Tip: Perform a thorough assessment of the exact number of users and their needs to avoid over-purchasing.
3. Failing to Benchmark Pricing
- Without benchmarking, you might not know whether Salesforce is giving you a competitive price.
- Avoidance Tip: Gather pricing data from competitors and use it to negotiate.
4. Rushing Negotiations
- Salesforce sales teams often add pressure to close deals quickly, which can lead enterprises to miss out on better discounts.
- Avoidance Tip: Set a realistic timeline, and do not hesitate to slow down negotiations if you feel rushed.
5. Accepting First Offer Without Questioning
- Salesforce’s first offer is rarely their best. They expect some level of negotiation.
- Avoidance Tip: Always negotiate. Use comparisons with competitor pricing or request for added benefits or a price decrease.
6. Not Securing Caps on Price Increases
- Salesforce may increase prices upon renewal unless explicitly negotiated.
- Avoidance Tip: Make sure that price increases are capped, or even better, ask for a price-lock clause during the negotiation process.
7. Ignoring Support and Service Levels
- Failing to negotiate support levels can lead to additional expenses down the line.
- Avoidance Tip: Ask for Premier Support or additional training to be included in your contract.
Leveraging Third-Party Consultants
Large enterprises often find value in bringing in third-party consultants to assist with Salesforce negotiations. These experts know the pricing model, common discount rates, and potential areas for negotiation that can save your company money.
Benefits of Hiring Consultants
- Expert Insights: Consultants often know about typical discount ranges and can assess whether Salesforce’s initial offer is competitive.
- License Optimization: They help ensure you only pay for what you need, avoiding excessive licenses.
- Risk Mitigation: Consultants often work on a success fee basis, which means they are incentivized to secure you the best possible deal.
- Example: If you’re unsure how many Sales Cloud and Service Cloud licenses are necessary, a consultant can help you assess your workforce and minimize wastage.
Choosing the Right Consultant
- Look for consultants with specific experience in Salesforce negotiations.
- Make sure the consultant understands your industry and specific CRM needs.
- Verify their track record of delivering significant savings for companies like yours.
Tips for Working with Salesforce Account Managers
Your Salesforce account manager can be a valuable ally if approached correctly. Here’s how to get the most out of that relationship:
- Communicate Your Needs Clearly: Let them know your growth plans and budget constraints.
- Request Price Locks: If you’re concerned about future price hikes, ask them to lock the current rates for future renewals.
- Ask for Bundled Support and Training: Salesforce products are powerful but have a steep learning curve. Request for bundled training sessions or enhanced support as part of the deal.
- Cap Renewal Increases: Get them to agree to cap renewal cost increases. This prevents future unexpected cost hikes.
- Example: Ask, “Can we add 20 hours of training to the final deal at no additional cost?”
How Salesforce Pricing Models Work
To negotiate effectively, it’s crucial to understand how Salesforce pricing works. Salesforce typically offers per-user pricing on a per-month basis. Each product line—like Sales Cloud, Service Cloud, or Marketing Cloud—has its pricing tiers.
Key Pricing Aspects to Know:
- Per-User Pricing: Prices are based on the service’s number of users.
- Feature-Based Tiers: Different editions (Professional, Enterprise, Unlimited) have different features, and prices scale accordingly.
- Additional Costs: Some features, like add-ons or integrations, come at extra cost.
Understanding these aspects helps during negotiations. If your team doesn’t need certain features or add-ons, you can negotiate them out of the package to reduce costs.
Understanding Editions:
- Essentials: This is the basic edition, with limited features suitable for small teams.
- Professional: This edition has additional functionalities that help grow businesses but lack customization.
- Enterprise: This edition is the most popular, providing advanced customization and integration options.
- Unlimited: It offers complete functionality with Premier Support and is the best option for huge teams that need comprehensive features.
Example: If your team doesn’t need full integration and deep customization, Professional might suit you better than Enterprise, helping you save significantly.
Salesforce Volume Discounts for Large Enterprises FAQ
What factors influence the discounts Salesforce offers to enterprises?
Salesforce considers the number of licenses, the length of the contract, bundled products, and the strategic value of the enterprise. More extensive commitments and multi-product deals typically result in better discounts.
How can enterprises determine if they are eligible for volume discounts?
Enterprises with significant license needs or multi-year plans often qualify. The best way to confirm eligibility is to discuss projected usage and business goals with a Salesforce Account Executive.
Are discounts the same across all Salesforce products?
No, discounts vary by product. Core CRM tools like Sales Cloud may have different discount structures than add-ons like Tableau or Marketing Cloud.
Do multi-year agreements guarantee more significant discounts?
Yes, multi-year agreements show long-term commitment, often leading to larger discounts. For example, a three-year agreement typically offers better pricing than a one-year deal.
Can enterprises negotiate discounts on renewals?
Yes, renewal periods are an opportunity to renegotiate terms. Enterprises expanding their usage or bundling additional services can often secure better deals during this time.
Is there a minimum number of licenses required for volume discounts?
While there’s no strict minimum, higher volumes are more likely to qualify. Typically, purchasing hundreds or thousands of licenses opens the door to meaningful discounts.
What role do Salesforce Account Executives play in the discount process?
Account Executives handle pricing discussions and negotiations. They assess enterprise needs and propose tailored pricing structures based on projected usage and business goals.
Can existing customers qualify for additional discounts during their contract?
Yes, especially if they expand their usage or add new products. Discussing new requirements with Salesforce can lead to revised pricing terms.
Do Salesforce partners offer better deals than Salesforce directly?
Partners may include extra services, but Salesforce usually provides the most competitive license pricing. It’s worth comparing both options to see which suits the enterprise’s needs.
How do enterprises prepare for successful pricing negotiations?
Understanding their current and future license needs is critical. Enterprises should also benchmark costs, analyze the ROI of Salesforce tools, and present clear business cases for their requested terms.
Are discounts available for professional services like implementation and support?
When bundled with software purchases, professional services can often be included in discounted deals. This is particularly common for large enterprises.
What happens if an enterprise underestimates its license needs?
Enterprises can add licenses later, but the additional costs might differ from the original discount terms. Negotiating flexible terms at the start can help avoid issues.
Can discounts apply to Salesforce training programs?
While not always standard, training programs can sometimes be negotiated into the contract, especially if they are part of an enterprise-wide rollout.
What are some common mistakes enterprises make during negotiations?
One common mistake is failing to plan for future growth, which can lead to higher costs later. Another is not leveraging competition or ROI data to negotiate better terms.
How do Salesforce volume discounts compare to competitors like Microsoft Dynamics?
Salesforce’s discounts can be competitive, but the overall value depends on the enterprise’s needs. Comparing features, support, and long-term costs is critical when evaluating different platforms.
