Case Study – Salesforce Negotiation Service UK Financial Services Firm Secures 35% Savings and Flexibility in Salesforce Renewal
Background
The client is a UK-based financial services firm specializing in insurance and wealth management. They have around 7,000 employees and operate across the UK and Europe.
Salesforce is deeply embedded in their operations, with Sales Cloud used by their financial advisors and sales teams, Service Cloud by customer support centers, and Tableau CRM for advanced analytics on client data.
The firm was coming to the end of a 3-year Salesforce agreement that was not a full SELA but did bundle several products with co-terminus dates. They also had a small Salesforce Platform license pool for internal app development.
Facing a renewal, the firm engaged Redress Compliance to navigate Salesforce’s renewal tactics, as they anticipated a push for a larger enterprise commitment.
The goal was to secure favorable pricing and terms that would allow flexibility, given the firm’s plan to possibly scale down certain operations amid a restructuring.
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Challenges
- Aggressive Renewal Quote: Salesforce’s initial renewal proposal came in aggressively, seeking to lock the firm into a new 3-year commitment with a 35% increase in total subscription costs. Salesforce justified this with the addition of more Tableau CRM functionality and extra Sales Cloud users “to support growth,” but in reality the firm was not growing headcount at that rate. This misalignment signaled a classic over-selling attempt that would leave the client over-committed.
- Bundled “Take or Pay” Elements: The quote bundled all current products and added new ones, such as Einstein Analytics (as part of Tableau CRM), into a single lump sum. Some components, like an AI module for lead scoring, were not even requested by the client. The bundling was structured as “take it or leave it” – dropping any single piece would result in the loss of discounts on the others. This made it hard for the client to assess real value and risked them paying for features they might not deploy (shelfware).
- No Flexibility to Reduce Seats: The client’s business was undergoing a minor restructuring, with plans to divest one of its smaller divisions within the next year. That division used about 200 Salesforce seats. Under the standard renewal terms offered, even if they sold or closed that unit, they would still have to pay for those 200 licenses until the contract ended (no ability to reduce mid-term). This was a glaring issue, as it meant potentially wasting money on unused licenses after divestiture.
- Compliance and Data Residency Considerations: As a UK/EU financial entity, the firm was mindful of data residency and GDPR compliance. Salesforce was introducing new Data Cloud services and encouraging them to consider it. Still, the client had concerns about where the data would reside and the contract terms related to GDPR compliance. They didn’t want to be forced into any product that could complicate regulatory compliance without careful consideration.
How Redress Compliance Helped
- Reality Check on Needs: Redress Compliance first aligned the client’s internal teams (IT, finance, and sales leadership) to gain a realistic picture of their forward-looking needs. This exercise confirmed that the client did not need additional Sales Cloud users (in fact, some reduction was likely after divestiture) and that the new AI/Einstein features were not a priority in the near term. With this clarity, Redress helped the client confidently remove the fluff from Salesforce’s proposal. They crafted a counter-proposal focusing only on the products and license counts required, signaling to Salesforce that the client wouldn’t buy into the “growth for growth’s sake” pitch.
- De-bundling Strategy: Redress employed a strategy to de-bundle the deal. They negotiated each major product separately to derive its true cost. For instance, they got Salesforce to provide a quote for Sales Cloud + Platform alone, separate from Tableau. This made it evident where costs were padded. Using this information, Redress restructured the renewal so that Tableau CRM (and the optional Einstein add-on) was divided into a modular add-on with its own pricing, allowing it to be scaled independently. The client agreed to renew Tableau CRM for the analysts who used it, but on a smaller scale than Salesforce’s bundle assumed. They also opted to drop the Einstein Analytics add-on entirely for now, which Redress negotiated without penalty, in exchange for discounts on core products.
- Securing Divestiture Flexibility: A major win was negotiating a contractual clause to accommodate the upcoming divestiture. Redress advocated for a provision that if the firm sold a business unit, the licenses attributable to that unit could be terminated or reduced. While Salesforce rarely allows mid-term reductions, Redress leveraged the long-standing customer status and the fact that this was a known business change. The final agreement included a one-time allowance to reduce the license volume by up to 15% (roughly equivalent to 200 seats) in the event of a divestiture, provided appropriate notice was given. This was a critical risk mitigator for the client, preventing them from incurring unnecessary costs for unused licenses.
- Price Benchmarking and Multi-Year Discount: Redress used UK/EU financial industry benchmarks to pressure Salesforce on pricing. They knew what other financial firms of similar size were paying. By citing these figures, Redress pushed for a multi-year discount lock, ensuring the firm received a ~35% discount on core Sales Cloud licenses (up from 20% previously) and that this discount would apply to any additional licenses if needed (price protection). They also secured a commitment from Salesforce to no list price increase during the term, which meant that even if Salesforce raised general prices (something they had announced for some clouds), it wouldn’t affect this client’s rates.
- Compliance Assurances: On the contractual side, Redress scrutinized the terms around data protection. They made sure any new product like Data Cloud or Einstein (if adopted later) would come with proper GDPR addendums and UK data residency options. Although the client decided not to purchase those right away, the contract was set up to allow for the addition of them later, with all necessary compliance terms pre-negotiated. This way, there’d be no pressure or surprise clauses to negotiate in a rush if the client decides to adopt new Salesforce innovations down the road.
Outcome and Impact
With Redress Compliance’s guidance, the UK financial firm achieved a far better outcome than the original scenario:
- 35% Cost Savings Achieved: The final renewal contract was approximately 35% less expensive than Salesforce’s initial proposal for the same scope. In absolute terms, the firm will save roughly £1.5 million per year. Even compared to their previous spending, they managed to slightly reduce the run-rate, despite initially being told to expect a significant increase.
- Lean and Modular Contract: The renewed agreement covers exactly what the firm needs – no more, no less. Core Sales & Service Cloud licenses were adjusted to current staffing levels (with a slight buffer, but not the unrealistic growth Salesforce wanted). Tableau CRM is included, but only for existing power users, not as an enterprise-wide blanket. Any additional bells and whistles (AI modules) were excluded, with the option to consider them separately later. This modular approach means the firm pays for the value received and can add components at its own timetable.
- Divestiture-Ready Flexibility: Crucially, the firm has a written guarantee that it can eliminate up to 15% of the licenses if the division sale is completed next year. This could save them approximately £ 300,000 that would otherwise have been wasted. It also sets a precedent internally that IT contracts can be adjusted to accommodate business changes. The true-down clause is a rare feature in Salesforce deals, providing the firm with peace of mind during its restructuring period.
- Improved Unit Pricing and Protection: The negotiation resulted in significantly better unit pricing. For example, the per-user cost of a Sales Cloud license for the firm is now considerably lower, thanks to the higher discount. And with the price lock, if they decide to add 100 users for a new project, they’ll get them at the same discounted rate, regardless of any Salesforce list price hikes. This cost predictability is valuable for financial planning.
- Strengthened Vendor Relationship on Client’s Terms: By not rolling over and instead engaging in a data-backed negotiation, the client gained respect from the Salesforce account team. The dynamic shifted; Salesforce now treats the firm more as a savvy partner rather than a captive customer. They’ve agreed to quarterly check-ins to ensure the firm is getting value from Tableau and to discuss any new needs proactively (instead of just at renewal time). The firm feels more in control of its Salesforce roadmap – they can adopt new features when it makes sense, with pre-negotiated terms, instead of feeling forced as part of a bundle.
Client Quote
“We went from facing a 35% cost hike to securing a 35% savings – that’s the power of Redress Compliance’s support. Salesforce came at us with a complex bundle and a big price tag. It was daunting, and frankly, we might have accepted much of it if we didn’t know better. Redress gave us the know-how and confidence to push back. They dissected Salesforce’s proposal, showed us what we didn’t need, and won concessions we never imagined possible (like being able to cut licenses after a divestiture!). It felt like having an expert negotiator and a strategic partner all in one. In the end, we have a sensible contract that aligns with our business, not Salesforce’s quota. We’re saving money and we have flexibility – a true win-win.”
– Head of IT Procurement, UK Financial Firm
Call-to-Action
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