Guide to Salesforce Pricing: How Much should Salesforce Cost in 2021?

Yes, you can negotiate your contract with Salesforce. Much like other large IT and SaaS vendors, Salesforce expects you to negotiate. Most customers do not know they can negotiate IT contracts or are hesitant to do so out of fear of compromising the business relationship. Some customers do attempt to negotiate but are largely unsuccessful because they do not know how to navigate the complicated process.

It is possible to achieve a margin of reduction anywhere from 15% to 50% in your Salesforce contracts. In our experience, the most successful negotiations focus on mutual value rather than a lower price. Salesforce, by design, has developed its sales organization so that the customer-facing account representatives do not fully understand where rates should be per client. These individuals are the clients’ day-to-day contacts and have some local knowledge from their book of business, but they do not always have the full picture. The sales system runs through a “business desk” or “deal desk.” The business desk is Salesforce’s decision-maker, with the account representative serving as something of a middle-man on your behalf. Read more about the business desk system.

How does Salesforce determine pricing?

First, it is important to clear up misconceptions about seasonal pricing. Many of our clients have been conditioned to believe that you must negotiate with software vendors at the end of the vendor’s fiscal year. They are operating under the assumption that the vendor is hustling to meet its annual or quarterly sales goals and is highly motivated to offer deals. This is an expensive and erroneous assumption. Salesforce, for example, has monthly targets as well; they change depending on how well certain sales verticals are performing and which products are selling .In general, Salesforce pricing is consistent with most SaaS organizations in that the more volume you have, the lower your price will be. However, there is no standard pricing for Salesforce. There is no “best in class” rate across industries; if another company is paying less than you, that means nothing at face value. In fact, sales teams at Salesforce are trained to rebut those concerns. In addition to the number of users, Salesforce pricing varies wildly based on three primary variables: industry, annual contract value (the amount of money you pay to Salesforce each year), and the customer’s (your) annual revenue. Consider this example: Two companies, one in manufacturing and one in life sciences, have roughly the same annual revenue and roughly the same annual contract value. The main differentiator is the industry; this could mean price points vary as much as 30% to 40%. Why? Salesforce operates using a type of value-based pricing model, where prices are set based on a customer’s perceived value of the solution. Industries like manufacturing and consumer goods with relatively small profit margins tend to see lower Salesforce costs. It is unlikely an individual sales rep would see this, being siloed into his or her own industry vertical.Other factors that can lead to additional fees is the number of custom objects, permissions, profiles, developer support, integrations with Outlook or Gmail, dashboard creation, customizable reports, custom objects, external apps, lead scoring, and other additional features.

What are Salesforce’s prices?

For the most part, Salesforce products are priced on a per user/per month or per digital capability /per month basis, billed annually. Customers who need additional Sandboxes, Shield, Platform Encryption, etc. will also experience variable pricing which is calculated on a percentage basis against a set of core SF products (like Sales/Service Cloud licenses). Salesforce calls this “derived pricing” and, contrary to what your account team will tell you, it’s highly negotiable as it delivers a high commission incentive. Publicly, Salesforce will tell you these products are 30% of net contract value. The “should cost” percentage of these derived products are reliant on the 3 variables described above with a specific emphasis on your product mix and annual contract value with Salesforce. Below you will find the “list pricing” for Salesforce. On average, through proper negotiation you can save 15-75% off of these list prices.

Salesforce CRM Pricing (See also: add-ons) Work.com

Workplace Command Center: $5/user/month. Manage the complex process of opening your business and getting employees back to work safely in the COVID-19 environment
Emergency Response Management for Public Sector: $300/user/month. Prioritize and mobilize emergency resources
Emergency Response Management for Public Health: $450/user/month. Protect communities and provide personalized patient care at scale
Contact Tracing: $200/user/month. Protect your employees and customers from the risk of infection

Small Business Solutions

Essentials: $25/user/month. All-in-one sales and support app
Sales/Service Professional: $75/user/month. Complete sales/service solution for any size team
Pardot Growth: $1,250/org/month. Suite of marketing automation tools for any size team

Salesforce Sales Cloud Pricing

Salesforce Essentials: $25/user/month billed annually. All-in-one sales and support app
Lightning Professional Edition: $75/user/month. Complete CRM for any team size
Lightning Enterprise: $150/user/month. Deeply customizable sales CRM
Lightning Unlimited: $300/user/month. Unlimited CRM power and support

Salesforce Service Cloud Pricing

Essentials Edition: $25/user/month billed annually. All-in-one sales and support app
Professional: $75/user/month. Complete service CRM for any team size
Enterprise: $150/user/month. Customizable CRM for comprehensive service
Unlimited: $300/user/month. Unlimited CRM power

Marketing Cloud

Customer 360 Audiences
- Corporate: $12,500/org/month. Give mid-sized businesses tools to unify and grow data assets
- Enterprise: $50,000/org/month. Help large-scale organizations unify, segment, and activate all data
- Enterprise Plus: $65,000/org/month. Enterprise edition plus Premier Support
Loyalty Management
- B2B: $30,000/org/month. Incentivize channel partners and distributors with a B2B loyalty program
- B2C: $35,000/org/month. Launch and manage more dynamic and personalized B2C loyalty experiences
- B2C Loyalty Plus: $45,000/org/month. Run multiple loyalty programs on a single platform
Pardot (up to 10,000 contacts)
- Growth: $1,250/org/month. Fuel growth with marketing automation
- Plus: $2,500/org/month. Dive deeper with marketing automation and analytics
- Advanced: $4,000/org/month. Power innovation with advanced marketing automation and analytics
- Premium: $15,000/org/month. Enterprise-ready features with predictive analytics and support

Email, Mobile, Web Marketing

Basic: $400+/org/month. Personalized promotional email marketing
Pro: $1,250+/org/month. Personalized marketing automation with email solutions
Corporate: $3,750+/org/month. Personalized cross-channel strategic marketing solutions
Enterprise: Ask for a quote. Sophisticated journeys across channels, brands, and geographies

Social Studio

Basic: $1,000/org/month. Start your social media marketing journey with listening and engagement
Pro: $4,000/org/month. Listen, publish, and engage across social networks
Corporate: $12,000/org/month. Social marketing and social customer service for companies with multiple brands or products
Enterprise: $40,000/org/month. Maximize results at scale across teams, brands, and geographies

Advertising Studio

Professional: $2,000+/mo. Power audiences across digital advertising with CRM

Datorama

Starter: $3,000+/org/month. Begin your marketing intelligence journey and unify, visualize, and activate your marketing data
Growth: $10,000+/org/month. Grow your marketing intelligence platform across all campaigns, channels, and platforms
Plus: Ask for a quote. Complete marketing intelligence across regions, brands, and business units

Google Marketing Platform

Google Analytics 360: $12,500+/org/month. Turn insights into action with Google Analytics 360
Google Analytics 360 + Optimize 360: $17,500+/month. Test, adapt, and personalize with Optimize 360

Salesforce CMS: $10,000/org/month. Build connected content and digital experiences at scale

‍Commerce Cloud

B2B Commerce: Quote request
B2C Commerce: Quote request

Platform

Starter: $25/user/month. Build custom apps that fuel sales, service, and marketing productivity
Platform Plus: $100/user/month. Extend Salesforce to every employee, every department, and transform app dev for your entire organization

How much does a Salesforce implementation cost?

A Salesforce implementation will cost on average 10-30% of your annual spend with Salesforce for a standard implementation. The primary factors that will cause the cost of your Salesforce implementation fees to vary is the amount of custom integrations, configuration services, and custom objects required by your organization. To learn more read our article about How much does a Salesforce implementation cost?

How do we get a Salesforce discount?

Discounts through organizational growth:

Organizational growth is the greatest leverage a company can have when negotiating discounts. Whether a company grows organically by adding more employees or capabilities, or inorganically through mergers or acquisitions, the need for more user licenses is an excellent starting point for negotiations. When company growth leads to both new users and new products, the opportunity for more extensive discounts increases.

Discounts through product expansion:

Companies that do not have planned organic or inorganic growth can build leverage by opting for some new or trending products. If you are just purchasing a basic CRM platform for lead, contact, & opportunity management, then you will likely struggle to receive a large discount. Although Salesforce routinely offers discounts on cross-industry platforms such as Einstein for analytics. It is discounted because it has not been widely adopted and few implementations have been successful. When Salesforce is actively pushing Einstein or another specific product, there are massive sales incentives and greater discounts. These discounts can be leveraged to negotiate further discounts in core licenses.While Einstein is promoted across industries regularly, other industry-specific platforms may be incentivized at different times of the year. Without inside knowledge, it is impossible to predict or know what products will be incentivized at what time. Because we work with Salesforce constantly, The Negotiator Guru has a much clearer picture of the Salesforce landscape. Our active client engagements and professional relationships with former Salesforce employees allow us to work on your behalf to move through the negotiation process.

How do we manage Salesforce cost over time?

Once you have successfully worked with TNG to negotiate your first contract, what happens when renewal time comes around? Clear, established ownership of Salesforce within an organization plays a critical role in managing costs moving forward.Salesforce’s ideal customer is one with multiple business units where needs and goals are not aligned across functions. No one is leveraging spend or standardizing rates/terms. Salesforce sales reps plan for an annual 10% increase in revenue from every customer, so customers should expect to be presented with the latest and greatest tool or app when sales conversations begin. When each business unit works independently with Salesforce, it is far more likely a company will pay for more software than it needs.TNG recommends a centralized authority that manages the overall relationship with Salesforce but particularly the tactical management of licenses. An internal Center of Excellence that can manage the entire Salesforce instance from an enterprise perspective, move licenses around as necessary, ensure products are being used appropriately, and continue refining and adjusting the Salesforce roadmap along the way.

Conclusion

Our negotiation process is driven by a simple concept: right size, right price. Similar clients should pay the same price for the same product, know what rates they should be paying in comparison to their peers, and know what to look for in software contracts to eliminate potential issues before they arise. Salesforce has hidden much of this process in the shadows, making it challenging for companies to make informed investments in technologies.

More resources

From Fortune 500 giants to fast-growing innovators, TNG has helped clients save 20% – 40%+ on enterprise software contracts — even when they thought it was impossible

5 Tips for Negotiating a Salesforce Extension

In this article we will discuss how to successfully extend your current Salesforce contract in order to create additional time to successfully prepare and negotiate your renewal agreement. For more detail, read our guide on negotiating with Salesforce.

An extension is commonly needed whenever our clients engage us too late (i.e. too close to their contract renewal) and we need time to successfully complete the Discovery and Strategy Phases of our proprietary 4-Step Negotiation Plan.

Tip #1: Be Confident

We find that most of our clients have either rarely or never requested a contract extension with either Salesforce or any other IT Supplier. As such, this very basic concept becomes daunting for the average IT or Procurement leader as they don’t have either the experience, or past playbook, to execute with natural confidence. This sentiment is augmented by the fact that Salesforce will automatically inform you that they never allow extensions. If you’ve read our previous articles, then you’ll know this is yet another canned answer out of their sales playbook. Please know that extensions are granted all the time as long as you know how to ask for them…as such, they are considered the exception vs. the rule.

Tip #2: Focus on the Facts

Share only what is necessary with Salesforce without going into too much detail. You don’t want to expend all of your negotiation equity during this process or you’ll end up hurting yourself down the road. Keep in mind that Salesforce will try and obtain as much information as possible during this stage so they can decide 1) whether or not to grant the extension and 2) to determine how prepared you are as an organization.

‍Tip #3: Establish the Why

Like any human scenario, it’s always easier to influence people if they understand the intent and context behind any request. This scenario is no different as you’ll want to answer in a way that is authentic to your organization but intentionally vague in material content. Typical responses we find most effective are the following:

Active interest in exploring new digital capabilities and need time to make internal decisions;
Internally restructuring the Salesforce relationship accountability;

Aligning multiple stakeholders within your organization to accurately capture the wants and needs over the next 5 years;
In the process of obtaining end user feedback and need some additional time to finalize, analyze, and make decisions, etc.

Tip #4: Create a Timeline with Milestones

Salesforce will be far more willing to accept an extension request if they understand the timeline in which you plan on making decisions. This in a sense shows a partnership mentality which is both real and healthy. Develop a basic timeline of when you plan on making internal and external decisions that provides a good amount of cushion in favor of your organization.

‍Tip #5: Keep your Promises

Constant and honest communication is key. All too often we find individuals/companies making the mistake of playing the power client position. In other words, the client exemplifies a lack of empathy or care for the sales process and holds all information back thinking that they are protecting their position. After years of research and proven experience we have repeatedly disproven that hypothesis. Instead, we find providing regular milestone updates to Salesforce (or any IT supplier) shows a level of commitment to the relationship and will pay dividends at the final negotiated deal. Summary It’s important to recognize that each client scenario offers its unique challenges and opportunity. That being said, the guiding principles laid out above will prove effective no matter your situation. Be confident in your request, focus on the facts of your specific situation, build credibility with Salesforce by providing context into the request, set expectations via timeline with milestones, and deliver on your promises. We use these same effective tactics every day and hope you find them useful in your future endeavors.

Key Points to Remember When Negotiating Your Salesforce Master Subscription

Customer Relationship Management (CRM) has become one of the most expensive IT investments for organizations around the world according to the annual “IT Trends Study” conducted by the Society of Information Management.

This IT investment growth is being fueled by two primary industry drivers:

Large organizations are both replacing homegrown systems as well as utilizing their CRM platform to further connect their internal and external stakeholders, processes, and communication strategies; and,
Small to medium-sized organizations are rapidly acquiring this technology to make a positive step-change in their customer interactions and client prospecting.

While there are many Software-as-a-Service (SaaS) CRM platforms to choose from in the marketplace today, Salesforce continues to dominate the space. Subsequently, if you are looking at CRM solutions in the marketplace, you’re likely considering Salesforce as an option.

Why is Salesforce (SFDC) the market leader and what makes it different than the others?

‍While this article is not intended to be a tactical comparison of CRM solutions available today, our vast experience and focus on Salesforce naturally has revealed a few key points:

SFDC has been, and continues to be, very strong in outbound and inbound marketing tactics;
SFDC arguably was the first mover in defining a SaaS CRM solution that is decoupled from any other large enterprise agreement (ex: Microsoft, Oracle, etc.) making it easier to obtain;
SFDC developed a buying channel that is direct to a business end-user vs. going through a channel partner/value added reseller (VAR);
SFDC was founded with the intent of truly being a platform where vertical applications could easily connect and integrate (like the Apple App Store); and,
SFDC has perfected the sales process inside of organizations in a way that their divide and conquer sales tactics commonly identifies continues growth opportunities across the organization.

Why is negotiating a Salesforce agreement so difficult?

‍The funny thing is that the entire go-to-market model of SFDC makes it very easy to acquire licenses as needed. This is in fact one of the many elements that make negotiating with SFDC difficult. In other words, very often our clients come to us after they have identified SFDC has spread throughout their organization without their knowledge and/or with very little governance. Our clients often describe this situation similar to an “internal virus” (their words, not ours) that spreads organically at a very fast pace. The result of this unmanaged growth can lead to the following (by no means comprehensive):

Little to no license asset management leading to “shelfware” (acquisition of more licenses than are being used);
Incorrect license purchase creating higher costs than needed;
Different monthly subscription fees for the same license type;
Lack of an enterprise agreement leading to contractual risk (etc.);
No defined growth or utilization strategy; and;
A platform that is very difficult to disengage which drastically increases the internal cost of
change.

CIOs and IT Procurement leaders often find it difficult to negotiate a more favorable agreement when renewing their SFDC agreement.

‍We find the following to be the primary drivers:

Like other very well-known and established software companies, SFDC has developed a sales process that is very difficult to crack if you don’t deal with them every day (like we do); Find out more about this here.
The standard SFDC SaaS contract allows for SFDC to introduce price adjustments at any time;
If a client is reducing their license count, SFDC’s standard contracts permit higher per unit pricing;
SFDC sales leadership and staff are highly motivated to continuously drive revenue growth at existing clients;
- To be explicitly clear about this, if a client’s contract is renewed with flat revenue, this is a very negative reflection on your account management team;
SFDC licenses are constantly changing; and,
SFDC account management changes (by design) every 6 – 18 months which naturally negates knowledge continuity, etc.

4 Key Steps to Successfully Prepare for a Salesforce Negotiation

Here are a few quick steps to prepare for your Salesforce negotiation:

1. Assemble a best-in-class negotiation team

Including an expert negotiator in your team can help you acquire the most reasonable Salesforce subscription agreement. As discussed in previous articles, Salesforce is an expert at “divide and conquer” sales tactics.

As such, they will be looking to speak with different stakeholders at all levels of your business with the intent of gaining as much intelligence about your needs as possible. To properly prepare for, and counter, these tactics we recommend establishing a negotiation team 6 months prior to any planned contract renewal/execution. Within this team you should include business, souring, and legal stakeholders that have decision-making authority on behalf of your organization. As part of the planning process, the negotiation team should create a working group of business stakeholders that can provide inputs into the needs and wants of the organization.

2. Perform a thorough review of the current contract prior to renewal

Part of our standard client onboarding process is a meticulous review of their current contract. While this may seem like common sense, it’s amazing how many prospective clients we speak with that never think of conducting this initial due diligence. Since our entire team originated from large organizations, we actually understand why this happens…initiative overload! Before we accept a new client, we ask them whether or not they have reviewed their current contract to determine if they actually received the products/services that were under contract within the current term. On average, only about 35% actually completed this step prior to engaging our firm. After we conduct the analysis, we on average find that 60% of our clients do not actually receive/activate the products/services that they pre-paid for as part of their original contract negotiation. Subsequently, we suggest you review all special contract terms that are part of your expiring agreement that may impact your contract renewal (i.e. price protection, etc.).

3. Prepare for a Proactive Negotiation

A proactive negotiation can enhance your leverage with Salesforce. As stated earlier, we recommend a 6-month runway to ensure the most leverage. If you are a renewing customer, Salesforce will generally start engaging your business stakeholders 3-4 months prior to your natural renewal date. Getting ahead of this stakeholder engagement will only help your organization. To ensure organization, we suggest developing a communication plan that directly advises each level of the organization what to expect, what to say, and when to say it.

4. Negotiate a 3-year TCO

Our clients commonly come to us asking about what price they should be paying for a specific product or service. Through years of experience, we advise clients to focus on the Total Cost of Ownership (TCO) for the entire contract instead of becoming fixated on a specific line item on the proposal. Like many other major software companies, Salesforce incentivizes its sales reps differently depending on the product or service. Instead of becoming fixated on a specific price point for a Sales Cloud license we suggest focusing on the net contract value. In other words, identify a TCO that you are comfortable with from a price-to-value standpoint and focus on driving the most value for your needs within that spectrum. We commonly obtain a 10 – 15% value increase by negotiating a net TCO vs. that of a line item rate basis. This, of course, is easier said than done but we wanted to share this facts-based article for you to consider as you embark on your Salesforce negotiation.