SALESFORCE PRICE OVERVIEW
Salesforce sells one of the most expensive solutions on the market, commanding a premium over comparable options. We do not deny that Salesforce is an expensive solution, but that does not mean costs cannot be reduced. In this document we will dive into competitive discounting for Salesforce products and offer solutions for customers to mitigate Salesforce pricing risk.
This Salesforce Pricing report will focus on the following topics:
1. Salesforce Pricing Statistics
How does Salesforce price in comparison to their competition? We detail the price premium Salesforce has over their closest CRM competitor, Microsoft Dynamics, and other pricing statistics such as price variance and gross margin per license sold. This section sets up the document to illustrate how successful Salesforce is at their pricing strategy, consistently pricing customers at premiums and maximizing their revenue per transaction.
2. Salesforce Pricing and Discount Percentages
Provided in this section is a detailed table highlighting the average Salesforce pricing across all major Salesforce product families. This table provides transparency into the price ranges we have observed over the last year, exemplifying the large range in discounting offered to customers. Though many customers may find themselves in these ranges, this section explains that the best deals include discounting that exceed the highlighted range, and with proper planning and negotiating leverage any customer can improve their Salesforce price.
3. Salesforce Pricing Tactics and Risks
Salesforce uses a number of pricing tactics to ensure they win deals, maximize margin, and increase costs for the customer. This section details three unique Salesforce tactics used in their licensing model that can present pricing-related risk for customers:
Org Based Licensing: Salesforce’s pricing tactic to segment business units into separate “Salesforce orgs” when providing contractual rights and pricing. This often leads to disparate terms and pricing across the same customer organization and limits customers to achieve unified competitive Salesforce prices for all licenses.
Salesforce Bundling: Salesforce commonly bundles proposals to hide necessary pricing details to validate deal competitiveness. This lack of transparency translates to future premiums inflicted on the customer without the need for price justification.
Salesforce Value-Based Pricing: A common misconception is that Salesforce prices their products strictly on a volume basis, providing better discounting for the higher volumes purchased. Though there is a correlation with a higher likelihood of achieving competitive discounting at a high volume purchase, we have also observed customers achieve the same level of discounting with very small purchases. This proves that pricing is not dependent on volume, but rather how motivated the sales rep is to price your deal competitively. This section highlights what “value-based” pricing is and how you can achieve competitive Salesforce discounting regardless of how large your purchase is.
4. Salesforce Price Incentives
In the last section of this Salesforce pricing report, we detail the top three motivators for Salesforce sales reps. If a customer understands the incentives and compensation plans for a Salesforce rep, they will have all the tools needed to form a negotiation strategy for the Salesforce purchase. We dive into how compensation for Salesforce reps are calculated, applicable bonuses achieved through specific deal scenarios, and which Salesforce products hold a higher weighted value for a sales rep’s compensation.
To increase your chances of achieving higher Salesforce discounting and lower costs, this document will aid you in identifying competitive pricing, Salesforce pricing strategy, and Salesforce sales rep incentives to facilitate movement on your bottom line. For additional assistance on your Salesforce purchase, review some of the other ClearEdge resources listed below to help plan your strategy and mitigate risk.