Salesforce Negotiation Case Studies
Upper Midmarket Manufacturing Company
A recent upper midmarket manufacturing industry client requested our assistance negotiating their upcoming Salesforce contract renewal. The client’s objective was to 1) validate their rates were the most competitive and 2) optimize their license footprint based on their actual utilization of the platform. This engagement delivered $573K in cost savings and $952K in cost avoidance within the 1st year alone for the client.
Key Activities
We utilized our 4-step IT Software Negotiation Process to drive the following key activities:
Step 1) Discovery - We interviewed several client stakeholders to identify how they have used Salesforce over the last several years
Step 2) Strategy - We identified the need to launch an internal workshop to identify, and gain alignment on, the client’s global business requirements. The output of this session created a conceptual future looking roadmap.
Step 3) Negotiate – Based on successfully completing the above, we were able to complete our rate benchmarking and advise our client of the potential cost savings opportunity.
The Results (not comprehensive)
$573K cost savings and $952K cost avoidance in the 1st year alone
A significant technology uplift for the client
A right sized and right priced Salesforce contract
Multinational Agricultural Company
One of our recent clients was a multinational agricultural company with $15B+ in annual revenue and 5000+ employees.
We worked with the client to:
Identify current state of Salesforce contracts and usage across the globe
Identify key stakeholders within IT and business units that utilized similar software packages
Coordinate global business units and stakeholder meetings to discuss opportunity, gather feedback and drive results
Utilize proprietary tools, templates and techniques to assign global roles & responsibilities, action items and negotiation tactics in interest of speaking from one voice
The Results (not comprehensive)
$13M in savings over 3 years
52% reduction in contract cost
A right sized and right priced Salesforce contract
Global Technology Company
A global technology company engaged our firm to Right Size and Right Price its current contract with Salesforce. The client’s objectives were to ensure they were only paying for the licenses they actually need (right size) while at the right price.
The outcome of this engagement was a $2.6M cost savings and a happy client that expanded the use of our firm across their enterprise.
Key Activities
We utilized our 4-step IT Software Negotiation Process to drive the following key activities:
Step 1) Discovery – We quickly huddled with the client and determined there was very little Salesforce governance inside of their organization. While they had a Salesforce Administrator, this individual acted more as a technical resource with little accountability related to their license compliance or governance.
Step 2) Strategy – Our firm ran virtual workshops with the client to quickly isolate cost reduction opportunities through quantity, license type, and price benchmarking reduction.
Step 3) Negotiate – We worked directly with Salesforce’s renewals team and global leadership team to reset the relationship both operationally and contractually.
Step 4) Contract Execution - We heavily negotiated contractual terms and conditions that provided flexibility for the client based on their growth projections, drive for innovation, and focus on the end user.
The Results (not comprehensive)
A very happy client who uses our firm across their enterprise
A $2.6M cost savings that was used for reinvestment
Stronger governance and internal controls to systematically contain costs and risk
Biopharmaceutical Company
One of our recent clients was a biopharmaceutical company with $5B+ in annual revenue. The client had a large software contract with one of the industry leading providers. The original agreement was charged on a “case volume” basis which was leading to rapid growth in costs beyond our client's budget.
We helped the client renegotiate the agreement with their software vendor by:
Changing the cost lever from which the client was billed from “case volume” to “seat-based licenses”
Setting rates on a “should cost” basis due to our firm’s extensive experience in the IT Sourcing industry
We decided that 35% was an acceptable margin for a software provider to be charging the client. Previously, the software vendor had been charging a 200% margin.
Handling the entire renegotiation process
The end result:
$52.3M+ in savings over 5 years
Financial Services Company
One of our recent clients was a financial services company with $15B+ in annual revenue and 5,000+ employees.
We worked with the client to:
Identify current state of contracts across the globe
Identify key stakeholders within IT and business units that utilized similar software packages
Coordinate global business units and stakeholder meetings to discuss opportunity, gather feedback and drive results
Utilize proprietary tools, templates and techniques to assign global roles & responsibilities, action items and negotiation tactics in interest of speaking from one voice
The results:
$13M+ in client savings
Negotiated client’s agreement with Salesforce down from $25 million to $12 Million for a 3-year contract
We also identified additional cost-savings opportunities that benefited multiple business units across their organization
