Salesforce’s growth strategy relies on maintaining annual spending levels and preventing attrition of licenses. Salesforce uses terms and condition to prevent customers from switching to other solutions or to reduce annual fees as a way to support their growth strategy. This Salesforce article will examine the top Salesforce contract used to lock customers in and drive up costs.
1. Renewal Caps
Salesforce renewal language can be very aggressive. Customers are often locked into an increasing annual fee and have limited options to reduce their Salesforce license count. This section outlines the Salesforce renewal cap ranges that we have observed, as well as specific Salesforce contract language and terms that pose risks to renewal. We also discuss ways to protect yourself from unanticipated Salesforce price increases.
2. License Swap Rights
Salesforce can be negotiated with customers to allow them to swap unused licenses for new licenses. Salesforce contracts can contain loopholes that restrict customers’ ability to swap licensing. However, customers who do reach this language are often able to negotiate with Salesforce to include it. This section explains all the Salesforce restrictions and loopholes that Salesforce uses to restrict your ability to swap license rights. It also outlines how you can achieve competitive swap rights in order to preserve your future license flexibility.
3. Audit & Restricted Use Licenses
Although audit risk is not a concern for SaaS suppliers but Salesforce contracts outline strict compliance rules regarding their “restricted use” licenses. Although these “restricted licenses” are less expensive than full-use licenses, they are not limited in any way. Salesforce contracts only specify the price and usage restrictions. Customers must enforce these restrictions manually. Scaling many licenses in an organization can make it more difficult to ensure compliance. This could lead to costly true-up premiums for all restricted-use licenses. This section explains where Salesforce audit terms may be hidden and what competitive contract language you should include in order to safeguard yourself against any Salesforce compliance violations.
Contract terms and conditions for Salesforce are an integral part their supplier strategy. Salesforce won’t agree to terms that are less competitive if they don’t have a strong negotiating strategy. Their success depends on maintaining their standard contract language. Salesforce negotiators must be aware of all Salesforce contract risks and how to protect their company from cost increases in order to execute a successful Salesforce deal. To help you plan your strategy and reduce risk, check out the following atonement resources.