We commonly get the question: “What are the most common mistakes and/or things to avoid when negotiating a Salesforce Agreement?” So much actually that we thought it made sense to write a short article for all to consume.
A Customer Relationship Management (CRM) platform is commonly within the top 5 expenses
within every CIO’s annual budget. The day-to-day operations of business serve as a natural
distraction for all of us and, if you don’t negotiate contracts all day long, it’s near impossible to
know all the information you need in order to successful prepare and execute a negotiation
strategy. Negotiating a Salesforce contract is tricky and can be extremely complex. Don’t
underestimate the time, effort, or expertise you’ll need, or you’ll quickly lose control of the
Here are the 7 most common mistakes we find CIOs and IT Management Teams make when
negotiating their Salesforce agreement:
1. Failing to prepare
While this may not come as a surprise, the single most common mistake is failing to allocate
enough time, resources, and expertise to properly prepare for the negotiation.
Ask yourself this: Would you ever go to a car dealership and take the first car they offer without
first doing your research on price, warranty, etc.?
As a CIO or IT management team, you should not make assumptions or rush through the
process of finding and/or negotiating your CRM platform. No matter whether you are searching
for a new CRM platform or simply renewing your existing agreement, make sure you take time
to understand the business and digital capabilities you are looking to acquire and/or augment.
Take time to conduct interviews across the organization and create a business canvas of those
needs to create a simple viewpoint of the wants and needs of the entire organization.
We advise our clients to start 6 months prior to any anticipated contract execution date.
2. Failure to look at the bigger picture
We find CIOs, IT Management Teams, and Salesforce administrators are great at thinking
about the relatively short-term needs of their organization but commonly forget to keep the big
picture in mind. As with any strategic supplier relationship, you need to think about how the
pricing, requirements, and relationship with Salesforce will look over the next 3-5 years.
Instead of looking at the short term, think strategically about your organization's goals and the
relationship you want to build. You need to approach your CRM vendor with a long term
mindset. Look at how their services will be beneficial to your organizations in terms of growth
and transformation. Make sure you prepare a compelling forward-looking strategy that is
deliberate in identifying how the Salesforce relationship will benefit your business. It’s
equally as important to understand how Salesforce views its relationship with you. Only
after both sides understand the current state of each organization can it build a plan forward.
3. Focusing too much on price
Our clients are almost always surprised when we say this statement. While price is ultimately
very important in any commercial agreement, it’s equally as important to validate that you
have the proper products and services for your organization.
“Right Size for the Right Price” – Dan Kelly, The Negotiator Guru
If you’re a new customer, make sure you’re not overbuying at the start…remember, adoption
always proves to be slower than you will anticipate when introducing a new CRM platform.
Subsequently, it’s all too common for the sales team to overweight your 1st year agreement as
they are solely focused on capturing as much revenue as possible from your account.
If you’re an existing customer, conduct an internal audit of your products and services that are
currently part of your Salesforce ecosystem. Make sure not only these products and
services are being used (the easy part) but also that they’re being used appropriately. Very
often we’ll find opportunities for our clients to downgrade while still achieving the same
business functionality required.
4. Not considering all your options
It’s important to keep a pulse on the marketplace…there are multiple CRM platforms out there
and while Salesforce is the industry leader they may not be the best fit for you.
Subsequently, if you are a current Salesforce user then it’s equally as important to conduct
a deep dive assessment on how other peers in your industry are using Salesforce. A properly
run CRM platform should not only optimize the sales process but also drive efficiencies in back
office operations, etc. If you identify (and you most likely will) new areas where Salesforce
can assist your business, carefully bring this up as an opportunity during the negotiation
process. Again, we urge the word “carefully.”
5. Not developing Executive Level relationships
As written in previous articles, Salesforce has set-up its very own incredibly effective sales
machine. While we won’t reiterate the previously written articles it’s important to call out that
most Salesforce customers underestimate the importance of developing and engaging VP
level and higher relationships at Salesforce. Only these levels have decision making
authority on your account. If these individuals are on your side, and understand your story,
you’ll be far more successful in your negotiation.
6. Failure to create a strategic internal communication plan (as part of your
Almost everyone fails at developing a bulletproof internal communication plan. While the
saying “speak from one voice” is widely used and understood in negotiations, it’s not enough to
simply rely on human beings to say exactly the same thing at the same time. Instead, we advise
our clients to develop a communication plan that provides key talking points for different levels
of the organization. These talking points all align to the same objective but are developing in a
way that reinforce message authenticity for that specific stakeholder.
7. Neglecting to include your C-Level Executives in the negotiation
Related to the previous point, we find that the majority of organizations we advise have
historically tried to limit and/or eliminate any C-Level interaction with Salesforce. This is
naturally understandable (based on common thinking) but actually a serious mistake.
Salesforce takes great pride in, and places great importance on, developing relationships
directly with their customer’s executive team.
We advise clients not to fight this point but leverage it. We admit that we used to get this point
wrong ourselves. We used to ensure the C-Suite knew not to say anything and only redirect
messages to a single point of contact. The big problem with this is that the c-suite really likes to
talk! Instead of fighting this natural instinct (and skillset) we advise our clients to leverage it by
creating a C-Suite communication and engagement plan that empowers the negotiation plan.
We hope you find this article helpful as you prepare your Salesforce negotiation. If you’d
like additional information, please feel free to reach out to Dan@TheNegotiator.Guru and we’ll
get right back to you.
© Dan Kelly and Kelly Consulting Group, LLC. dba "The Negotiator Guru", 2021. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited.
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Understanding how Salesforce Negotiates
4 Key Steps to Successfully Prepare for a Salesforce Negotiation
Key Points to Remember When Negotiating Your Salesforce Master Subscription