Updated: 2 days ago
Salesforce is focusing on vertical industries to achieve its ambitious revenue goals, and IT leaders in healthcare are in the cross-hairs. Many of our clients in this segment currently struggle to understand the Salesforce Health Cloud offering and complain that they are unable to budge Salesforce on this product’s pricing. Here is a summary of the top challenges surrounding this product and how to combat them:
Health Cloud comes with the exact same functionality as the company’s Service Cloud offering but it comes “out-of-the-box” customized for a healthcare-specific company. These additional features can be created in Service Cloud.
Health Cloud’s list price is 50% more than Service Cloud.
Some clients still want the out-of-the-box functionality of Health Cloud because they lack the time or resources to customize Service Cloud for their purposes. For this reason, we’ve come up with a Health Cloud deal checklist to prevent over spending.
CHECKLIST FOR HEALTH CLOUD DEAL MAKERS
1. Price Negotiations
Understand that Salesforce sales reps are compensated on net new growth in year one of any agreement. The more you can front-load your spend, the more accommodating they will be. Also, multi-year deals act as a multiplier on commissions: the longer the deal (5-year vs 3-year vs 1-year deal) the higher the bonus. Further, be aware that commissions are higher on products Salesforce is currently trying to promote, e.g., Health Cloud.
To move your sales rep on price, you must provide a compelling business case surrounding this purchase. Specific examples include budgetary constraints, timing of execution, or product functionality needs.
2. Demand Forecasting
You must prevent Salesforce reps from doing these three things to inflate your demand:
Advise your departments what licensing is needed for your environment
Hide additional and non-requested products in ELA bundles
Offer high discounting for (often unnecessary) options with higher demand
3. Useful Terms and Conditions
Don’t assume that all contract terms are standard, and the language is non-negotiable. There are several terms you can ask Salesforce to change to your advantage, such as renewal pricing caps, and swap rights that can provide some flexibility down the road.
To learn more about optimizing your next Salesforce deal, click here to listen to our 25-minute webinar on the subject.
Francis Gagliano is an analyst with ClearEdge.