5 Tips to Negotiate a Better Salesforce Renewal

At a glance:

  • The goal of a Salesforce renewal is to get the right products at the right price. Customer growth, maturity and revised goals as well as changes to Salesforce product editions and SKUs create opportunities to improve the Salesforce product bill of materials and CRM pricing.
  • A successful Salesforce renewal will verify exactly what software is needed, assess CRM product options or combinations to achieve measurable goals, and evaluate creative alternatives to maximize value.
  • Successful Salesforce renewal may include negotiations to prevent overbuying and maximize spend which often results in a 15-35 percent contract savings.

We've been helping clients negotiate Salesforce purchases and renewals since 2004 and have learned a lot. We previously published the challenges in negotiating Salesforce renewals and Salesforce renewal best practices. But with this article we're going to drill into 5 tips to ensure you get the maximum technology value at the minimum subscription investment.


Timing is your Top Salesforce Renewal Negotiation Constraint

If you intend to negotiate your Salesforce renewal you will need to allow plenty of lead time. Your Salesforce Account Executive, and possibly his or her sales managers, often start engaging everyone they know in your company a few months before the CRM renewal. That leaves enough time for them to discover upsell opportunities but not enough time for the company to assess its options and negotiate a better deal.

Strategic CRM negotiation time allocation is about 75 percent for planning and preparation and 25 percent for execution. The upfront time investment adopts a negotiation strategy, identifies prioritized negotiation goals and creates alignment throughout the company. Unsuccessful CRM negotiations do just the opposite. They allocate the bulk of their limited time to execution and inevitably run out of time before real gains can be made. Instead of being proactive they are reactive. Instead of negotiating they are bargaining.

A CRM negotiation that results in material cost savings or increased value generally takes 6 to 12 months. If you wait until Salesforce has approached you for the renewal you will be left without options, leverage or a real CRM negotiation strategy.


Your Salesforce Sales Rep is a Go-between

It's good to have a good relationship with your Salesforce Account Executive but it's essential to recognize their empowerment and financial interests. Salesforce sets growth goals for customers. The sales rep is accountable and compensated to achieve those goals. Incentives are removed for flat or declining annual contract value (ACV).

The Salesforce sales rep is not your confidant and not empowered to make meaningful CRM discount and price concessions. Those decisions are made by the Salesforce Business Desk. Your sales rep is a liaison between your company and the Business Desk.

Successfully negotiating a Salesforce discount requires progressive messaging that is delivered to your sales rep and escalated to the Business Desk. The messaging must be clear, logical, outcomes oriented, delivered at the right time and consistently relayed from everyone the sales rep speaks to.


Reassess Your Salesforce Product Edition

Many customers ultimately recognize they over-purchased during the original contract. Others fail to make this recognition but are in the same boat. Knowing what capabilities you use and do not use, and knowing which Salesforce product edition and alternative SKUs deliver just the capabilities you need is not easy but is essential to purchase the right products at the right price.

This understanding starts by measuring your current Salesforce utilization and noting what application capabilities are not used, under-utilized or not delivering their intended value.

Salesforce Optimizer

You can then perform a technical assessment to measure what feature sets and application functionality are being used or not used. With this assessment, an internal SME or external Salesforce CRM expert can show if there are alternative products, a change in CRM editions or other workarounds to achieve your goals at a more efficient spend.

Salesforce Editions

A Salesforce assessment can deliver big savings at the contract renewal. If the CRM evaluation discovers that the software capabilities being used can be accomplished in a lesser product edition or with a different combination of products the company can often save around 50 percent or more on the renewal.


Reassess Customer Support

Customer support is another potential area of declining value and cost savings. After the initial Salesforce contract term, user and admin questions decline significantly so the company probably does not need that Premier or Premier+ support plan.

Leveling down your support plan will also reduce those recurring upsell and cross-sale product recommendations from your Customer Success Director.


A Salesforce Roadmap

If you don't already have one, consider a Salesforce CRM Solution Blueprint to focus on measurable value, and not just cost reductions, and replace guesswork with specificity when it comes to knowing what Salesforce products are needed by your users.

In fact, not having this road map results in guessing what you need to purchase, over-relying on the vendor and quite often over-purchasing.

Your CRM Blueprint and road map replaces vague software requirements that lead to overbuying with specific application capabilities. It identifies software scope (i.e., product edition, feature sets, ecosystem solutions, etc.), software timing (i.e., when software components are needed), defined users for each application and the relative or measured value for each part of the application.

It also projects CRM software user growth and feature capabilities over a 3 to 5-year horizon. Not only does the CRM Solution Blueprint bring specificity to what is needed for the Salesforce renewal contract, it also calculates the budget, total cost of ownership (TCO) and projected ROI.