Case Study – Salesforce Negotiation Service US Retail Chain (Omni-Channel) Negotiates 32% Salesforce Cost Savings and Flexible Terms
Background
The client is a nationwide retail chain in the United States, operating both brick-and-mortar stores and a growing e-commerce business.
With approximately 10,000 employees, the company uses a suite of Salesforce products: Salesforce Commerce Cloud powers their online storefront, Marketing Cloud drives personalized email and SMS campaigns for millions of customers, and their customer support center uses Service Cloud.
They also have Tableau for retail analytics.
The retailer’s Salesforce agreement was a standard subscription (transactional model) with various products co-terminated to renew simultaneously. As the business expanded its digital channels, Salesforce’s costs had surged.
The company engaged Redress Compliance a year ahead of a major renewal to help negotiate a better deal, especially as Salesforce was urging them to consider a multi-year SELA-style contract consolidation.
Read how to negotiate with Salesforce.
Challenges
- Multi-Cloud Complexity & Bundling Pressure: The retailer had disparate contracts for Commerce Cloud, Marketing Cloud, and Service Cloud, each with different terms and pricing. Salesforce proposed a unified Enterprise Agreement bundle for renewal, suggesting that combining all products would result in higher discounts. However, the proposal lacked transparency regarding individual product costs, raising concerns that a discount on one product might mask a price increase for another. The client feared that bundling could lead to the forced inclusion of unwanted components or a loss of flexibility.
- High Marketing Cloud Spend: A significant cost driver was the Marketing Cloud, particularly in terms of contact and messaging volume fees. The retailer was paying for a large contact database and messaging capacity that had grown beyond actual marketing needs (after an initial overestimation). This resulted in overpaying for unused marketing send capacity, effectively rendering their Marketing Cloud usage shelfware.
- Renewal Sticker Shock: When Salesforce provided initial pricing for a 3-year bundled deal, it came in roughly 25% above the current total annual spend. Part of this was due to Salesforce’s forecasts of the retailer’s growth – Salesforce assumed the client’s e-commerce expansion would require 20% more licenses and capacity each year. The retailer viewed this as overly aggressive “growth inflation,” essentially prepaying for future growth that might not materialize.
- Limited Internal Visibility: Internally, the retailer’s procurement team struggled to consolidate usage data across the various Salesforce products. They lacked a clear picture of utilization for each cloud (e.g., which stores or regions utilized Service Cloud fully, or how many marketing emails were sent versus their allowance). This made it challenging to counter Salesforce’s claims without solid data, and risked the company agreeing to terms that didn’t reflect real needs.
How Redress Compliance Helped
- Cross-Cloud Usage Audit: Redress Compliance stepped in to perform a holistic usage audit across all Salesforce products. By gathering data from Salesforce dashboards and logs, they established accurate usage metrics. For instance, they found that only 60% of the Marketing Cloud contact capacity was utilized, and several Commerce Cloud features the client was paying for (like advanced AI recommendations) were barely used. This audit empowered the retailer with facts to challenge Salesforce’s assumptions.
- Eliminating Excess and Shelfware: Using the audit data, Redress identified opportunities to cut back. They recommended scaling down the Marketing Cloud contact tier to a lower level, more in line with actual sending volumes, which would result in substantial cost savings. Similarly, the team advised removing a costly add-on for Commerce Cloud that wasn’t yielding ROI. Redress incorporated these reductions into the negotiation strategy, effectively stating, “We won’t renew these unused portions.” This proactive stance prevented Salesforce from rolling the unused capacity into a new contract as hidden shelfware.
- Decoupled Deal Structure: Redress advised the client to resist an all-in-one bundle unless it was on their terms. During negotiations, they insisted on a decoupled pricing approach – Salesforce had to display individual prices for Commerce, Marketing, Service Cloud, and so on, rather than a single opaque number. The Redress team highlighted the importance of this for flexibility: if the retailer wanted to drop or swap a product later, it shouldn’t torpedo their entire discount. Ultimately, Salesforce agreed to a hybrid approach: a master contract with unified end dates, but separate SKU-based pricing for each cloud. This preserved transparency and leverage for the client.
- Challenging Growth Assumptions: Redress pushed back on Salesforce’s built-in growth projections. Citing the client’s own strategic plans and industry trends, they argued that a 20% year-over-year growth in licenses was unrealistic. They negotiated terms to make growth optional rather than mandatory – the final contract allowed the retailer to opt in for additional users or capacity each year at preset discount rates, instead of being forced to take and pay for them regardless of need. This removed the “automatic” spend increase Salesforce had tried to impose.
- Benchmarking and Competitive Pressure: Behind the scenes, Redress provided the retailer with benchmarking data showing what similar retail companies pay for Salesforce products. Equipped with this, the client confidently countered Salesforce’s pricing. Redress also subtly hinted that the retailer was evaluating alternative e-commerce and marketing platforms. This credible competitive pressure made Salesforce more pliable. Ultimately, Salesforce improved discounts across the board – for example, increasing the Commerce Cloud discount to match the best-in-class rates Redress had identified.
- Timing and Executive Escalation: When the account executive’s offers still weren’t meeting targets, Redress escalated negotiations to higher-ups at Salesforce. They coordinated executive-level meetings, making the case that this retailer was prepared to walk away from certain products if the value couldn’t be demonstrated in pricing. As the quarter-end deadline loomed, Salesforce’s senior management approved extra concessions to close the deal, including some one-time credits and a signing bonus of free additional support services.
Outcome and Impact
After Redress Compliance’s intervention, the retail chain achieved a substantially improved Salesforce agreement:
- 32% Cost Savings: In comparison to the initial 3-year bundled quote, the client will spend 32% less per year under the new agreement. This equates to roughly $2.5 million in annual savings. A portion of this came from simply not buying what wasn’t needed (e.g., the lower Marketing Cloud contacts tier), and the rest from deeper discounts and the removal of automatic add-ons.
- Transparent, Flexible Pricing: Each Salesforce cloud product is now clearly priced and can be purchased independently. The retailer can see exactly what it pays for Commerce Cloud versus Marketing Cloud, and so on. If, down the line, they decide to drop, say, an under-performing module or switch to a different e-commerce engine, they can do so without losing all the negotiated discounts on the remaining products. This decoupled structure protects them from the classic bundling trap, where “you don’t know what you’re paying for.
- No Forced Growth Commitments: The final contract does not force any license or capacity increases. The client will only expand (and spend more) if their business truly demands it, and even then, they have pre-negotiated rates locked in. There’s no penalty if their usage stays flat. This is a significant win, transforming what would have been a guaranteed 20% annual cost increase into a controllable expense.
- Optimized Marketing Cloud Spend: By right-sizing the Marketing Cloud subscription to actual needs, the retailer saved roughly $1 million/year alone on that product. And with the option to add capacity later if needed, they’re not hamstrung – it’s pay-as-you-grow. The immediate effect was a leaner marketing tech cost without impacting any active campaigns or customer engagements.
- Executive Support and Relationship Reset: The tough but fair negotiation, led by Redress, also reset the tone of the Salesforce relationship. Salesforce learned that, with Redress’s guidance, this client will not accept boilerplate terms or unexplained fees. In the future, quarterly business reviews are planned to ensure the retailer derives value from its purchases. Salesforce even offered a dedicated success team at no extra cost to help the client better utilize the platforms (a gesture to justify the partnership).
Client Quote
“Redress Compliance achieved for us what we couldn’t on our own – a fair, transparent deal with Salesforce. We were initially overwhelmed by Salesforce’s complex bundle offer. Redress brought clarity by showing us exactly where we were overspending and where we had leverage. They negotiated fiercely on our behalf. We ended up saving over 30% and, just as importantly, we can actually see what we’re paying for now. Redress’s independent, no-BS approach protected us from signing up to things we didn’t need. This new contract is night-and-day better than what we started with, and it positions us strongly for the future.”
– VP of IT Procurement, Retail Industry (anonymous)
Call-to-Action
Retailers: Before you sign your next Salesforce deal, ensure it’s on your terms. Contact Redress Compliance for a complimentary review of your Salesforce contract. We’ll help you untangle bundled offers, eliminate shelfware, and secure pricing and terms that boost your bottom line.
Read more about our Salesforce Negotiation Service.
Read more Salesforce Contract Negotiation Case Studies.
