Salesforce is a CRM platform with 150,000+ customers around the world. Your CRM is a significant business expense, and costs can quickly escalate from thousands to millions per year.
Before negotiating a discount with Salesforce, it's important to understand your options to maximize the return on investment for the time and resources you'll spend.
To assist with this, we've analyzed a large number of Salesforce contracts and millions of dollars in spending to share insights on the following scenarios:
Managing a Salesforce renewal when your contract value is increasing:
When your contract increases, there's a very high probability that you'll get a discount. You can obtain an even greater discount if you opt-in to a multi-year contract or bundle multiple Salesforce products i.e. Sales Hub and Slack. When you negotiate Salesforce, the levers you can pull are:
- Expanding your use of Salesforce: The more Salesforce products you use, the higher the discount potential. This information can be kept private and not shared immediately during negotiations.
- Billing schedule: Consider paying upfront to secure a higher discount. It's also possible to negotiate the higher tier discounts on offer if you pay annually but negotiate quarterly or monthly billing.
- Timing is key: Negotiations should commence 90 days before the renewal date to maintain leverage during the conversation.
- Know the competition: Understand the terms offered by rivals from Hudled’s CRM pricing insights on Hubspot and other CRM products.
- Use industry benchmarks: Gather information on what other companies like yours are paying and the best terms that are offered.
Managing a Salesforce renewal when your contract value is staying the same:
You don't need to negotiate if you are happy with your discount. You can let your contract auto-renew, and you don't need to invest time. You don't have as much leverage when your contract value is similar. There are some options available, and the levers you can pull are:
- Billing schedule: You may get a bigger discount if you pay annually. If you are already paying annually, suggest changing your billing terms to every six months or quarterly.
- Know the competition: Your leverage increases if you have data on a competitive tool. This is where Hudled’s CRM pricing insight can help.
- Time: If you are trying to negotiate, 30 days should be sufficient for a productive conversation.
Managing a Salesforce renewal when your contract value is decreasing:
Negotiating a discount with Salesforce when your contract is decreasing has a low probability of success. You don’t have leverage, and from Salesforce’s perspective, it will be hard for their account managers to get approval for any material discounts. You can likely maintain your current discount. If price is a major factor, there are some other levers you can pull:
- Empathy: Use a persuasive story to explain your financial needs. This could be a strategy to get a better price.
- Co-marketing: Offer to be part of a case study or write a public review.
- Temporary Discount: Negotiate a temporary discount, such as 50% off for six months until your next round of funding. This may be approved on a case-by-case basis.
- Knowing the competition: Research what other companies are paying for similar services like Salesforce. While migrating to another CRM may not be ideal, you can use competitors as a point of reference.
- Time: If you are trying to negotiate, 30 days should be sufficient for a productive conversation.
Negotiate a discount with Salesforce when purchasing for the first time:
You can negotiate a discount with Salesforce when you purchase for the first time. Many factors will impact the terms, and having access to Salesforce pricing insights will help. The levers you can pull are:
- (RFP) Request for proposal: Vendor will take you more seriously and typically offer higher discounts when they have to tender for your business. Note that this strategy is more effective for larger companies.
- Billing frequency: Use Hudled’s CRM pricing insight to find out what companies like you are paying and what the best terms that are offered are.
- Time: Start speaking to Salesforce at the end of the financial year. If that's not possible, the end of the quarter or month will increase your chances of a higher discount.
- Urgency: Use time to your advantage. See if there's an opportunity to improve the deal terms if you close faster.
- Competition: Do you know what terms Salesforce is offering? Use competition to your advantage.
It’s essential to remember that cost is just one factor any business needs to consider when purchasing or renewing SaaS tools like Salesforce.
Would you like more pricing insights?
At Hudled, we’re building a SaaS intelligence platform to manage the full lifecycle of your SaaS stack. Our data-driven approach enables you to leverage data to buy the right tools at the best price. To ensure you're paying the best price across your entire SaaS stack, get started for free and request a SaaS audit.
Please note the author generated this text in part with GPT-3, OpenAI’s large-scale language-generation model. Upon generating draft language, the author reviewed, edited, and revised the language of this publication
